China is to invest $20 million in Israeli robot technology, in the hope that the tech Israel develops will help catapult its economy.

Last week, the Israeli Robotics Association signed an agreement with a coalition of Chinese investors and the city of Guangzhou, one of China’s biggest industrial centers. China’s $20 million investment will be used to build a robotics R&D center in Israel dedicated to developing robot tech that China will be able to use to automate and modernize its massive industrial base.

The deal is the second major development in the robotics sphere involving Israel and China. In September, the two countries signed a deal to establish the Sino-Israeli Robotics Institute (SIRI), the centerpiece of a new $2 billion industrial park in Guangzhou that will be dedicated to bringing to life the robotics research done by Israeli and Chinese researchers.

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Under the new deal signed last week, the technology and the robots will be developed and perfected by Israeli and Chinese researchers in Israel, and will be mass-produced in China.

Among the investors in the new project are Siasun, the largest robotics firm in China, and Vanke, China’s largest real estate firm and owner of a large number of industrial parks – one of the main markets for robots, as China makes its move from a commodity manufacturer economy to a high-tech one, according to Zhang Jin, director of marketing at Siasun.

“China, the world’s number one producer, faces a manufacturing crisis, as it has been relying on cheap labor that is now getting more expensive,” said Zhang. “As a result, we have chosen to formulate a new industrial production model which relies on robots. Building a robotics industry is an important strategic objective of China, and robotics is one of ten sectors that the government is heavily promoting and funding.”

Despite the massive investment China has been making in automation in recent years, the country still lags behind, said Zhang.

“In China, we have about 30 industrial robots per 10,000 workers, compared to 62 robots in countries such as Japan, meaning that there is a great potential in China for research and implementation of robot tech.”

In addition to industrial robots, Zhang sees a big market for robot “servants” – waiters, customer service agents, and in other consumer and business oriented areas. “We think that market will be even bigger than the industrial market.”

One area where robots will be immediately useful, said Yang Gaofei, a top manager at Vanke, is at construction sites, where finding manpower to do heavy work is becoming more difficult.

“Young people in China do not want to work in the field,” he said. “Robots will be able to take their place, and will also improve margins of the construction industry. Robots can be used as security guards, cleaners, and providers of services at our many properties. Other uses for robots will be to provide care for the elderly, perform services in luxury apartments, and interact with visitors at amusement parks and other similar facilities. We are very big in the real estate business but very small in the robotics business, and thus our desire to collaborate with Israel.”

According to Zvi Shiller, a professor at the Department of Mechanical Engineering and Mechatronics Faculty of Engineering Ariel University and chairman of the Israel Robotics Association, Israel is one of the most advanced countries in the world in robot development and research, “but we don’t have a lot of opportunity to deploy that technology because our economy is too small,” said Shiller. “China is a major opportunity for us, and manufacturers there are very motivated to take advantage of our technology. There are thousands of factories that will be interested in the technology developed at the Institute. It’s like a second Industrial Revolution – and Israeli technology is at the center of it.”