A piece inspired by Beijing’s recent display of dancing robots, Xin-Yao Ng, Co-Manager of Aberdeen Asia Focus plc discusses China’s ever-greater strides towards all-round tech pre-eminence.
China is developing a habit of stunning the world with surprise demonstrations of its technological prowess. Last year it was AI upstart DeepSeek that sent shockwaves around the globe.
This year it’s dancing robots that have been raising eyebrows and slackening jaws.
The droids strutted their stuff during the annual Spring Festival Gala, one of China’s most-viewed TV shows. Bearing a disconcerting resemblance to fleshless Terminator cyborgs, they performed perfectly choreographed routines that included jumps, backflips and even a sprinkling of kung fu.
Unlike the unveiling of DeepSeek, the spectacle didn’t wipe billions of dollars off US tech stocks overnight. Nonetheless, it’s fair to say much of the West was impressed.
The Brookings Institution, one of the US’s leading policy-focused think-tanks, suggested Beijing’s aim was nothing less than to “dazzle domestic and international audiences”. Other commentators cited the display as proof of China’s clear superiority in the robotics race.
Soon, however, a more sceptical narrative started to emerge. Critics claimed an ability to prance around on stage reveals little about Chinese robots’ potential effectiveness in “unstructured environments” – for example, factories, logistics centres and care facilities.
So what should investors make of it all? Does a troupe of terpsichorean Terminators underscore China’s place at the vanguard of tech or is this just an automated illustration of style over substance?
Rapid progress and remarkable scale
There may be more than a grain of truth in suggestions that a capacity to glide across a dancefloor doesn’t necessarily translate into industrial application.
After all, no-one ever mistook Gene Kelly for a would-be warehouseman.
Yet it might be worth comparing this generation of Chinese robots with their predecessors. The ensemble that featured at 2025’s Spring Festival Gala was altogether less gasp-inducing, and even many of the participants at the inaugural World Humanoid Robot Games – held in Beijing last August – spent a good deal of their time falling over.
This alone indicates pretty rapid progress. In the space of a year or so, irrespective of their wider utility, the automatons China is happy to expose to the watching world have gone from lumbering hulks and stumbling oafs to a combination of Michael Jackson and Bruce Lee.
The sheer scale of R&D taking place is hugely significant here. According to state data, more than 450,000 “intelligent robotics” companies had been registered in China by the end of 2024.
Relatedly, advances in robotics are among Beijing’s stated strategic priorities. Ascendancy in this field is seen as central to broader efforts to “seize the commanding heights of science and technological development” and seek “decisive breakthroughs in key core technologies”.
Even Elon Musk, who regards humanoid robots as the new “mega-industry”, has conceded China is likely to dominate this market eventually – much as it has come to dominate the market for electric vehicles (EVs).
“People outside China underestimate China,” he said earlier this year, “but China is an ass-kicker, next level.”
Wider pre-eminence and the role of hidden gems
There’s ever-mounting evidence that this proclivity for booting backsides now extends across multiple tech arenas. For instance, a study by the Australian Strategic Policy Institute (ASPI) reported last year that China now leads the way in research into 66 out of 74 critical technologies.
Crucially, the world’s second-largest economy is reckoned to have an edge in eight of the 10 technologies most recently added to ASPI’s list.
These include generative AI, cloud computing and brain-computer interfaces.
According to ASPI, a familiar tale is unfolding in each of these areas. The US builds an “early and often overwhelming advantage”, only to see it “eroded and then outmatched” by China.
Granted, research doesn’t invariably bear fruit. But the fact is that China is already the US’s arch-rival in the AI stakes, the number-one exporter of EVs, the top manufacturer of batteries for both EVs and energy storage, a huge force in “legacy chips” and a major player in solar and wind power, all of which rather implies it must be doing something right.
Given all the above, where might investors seek out opportunities?
In our experience, many of the most compelling long-term growth stories can be found among smaller companies – hidden gems whose spirit of entrepreneurship and innovation is nowadays welcomed by a government that fully recognises the importance of establishing and maintaining a position at the cutting edge.
All things considered, dancing robots might not represent the greatest investment proposition in history.
Look beyond them, though, and you’ll find an economy absolutely determined to achieve pre-eminence across the entire spread of the tech spectrum.
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The writer’s views are their own and do not constitute financial advice.
This information should not be relied upon by retail clients or investment professionals. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.
Main image: possessed-photography-rDxP1tF3CmA-unsplash
