China is making its move from an commodity manufacturer economy to a high-tech one – and Israel is playing a key part.

To bring down the cost of production for the many consumer and industrial products made in its factories, China is undergoing a robotics revolution, installing machines to replace people on the assembly line, and working with Israel to develop smarter and better robots, via the newly established Sino-Israeli Robotics Institute.

The Institute will be the centerpiece of a new $2 billion industrial park in the Guangzhou region of China that will be built around the technology developed jointly by Israeli and Chinese researchers.

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For the past two decades, China has specialized in low-cost factory production of just about everything, from clothing to electronics. It’s a strategy that has helped make China the world’s second-largest economy. But rising production costs – due mostly to rising salaries – are pricing Chinese goods out of the market.

But it’s time for its economy to move on, the government decided, so China has embarked on a new program to do just that. Made in China 2025 will, officials hope, move the country from a commodity manufacturer to an innovative, high-tech center that will produce advanced products and services. A big part of the plan will have the country move to “more intelligent manufacturing, with an emphasis on quality,” as well as more environmentally conscious manufacturing.

“China has become the world’s second-largest economy by producing enormous amounts of consumer products and selling them overseas,” China’s State Council said in a statement last March. “But the days of double-digit growth in manufacturing output have gone, stemming from inefficient traditional methods and a lack of high-end manufacturing.”

The way forward, believes Premier Li Keqiang, is “to upgrade the nation from a big manufacturer to a manufacturing industry superpower. This is key to helping China maintain economic growth at a medium-to-high level and to move up the global value chain.”

That is where Israel comes in, according to Zvi Shiller. A professor at the Department of Mechanical Engineering and Mechatronics Faculty of Engineering Ariel University, Shiller is also chairman of the Israel Robotics Association, which was instrumental in establishing the Sino-Israeli Robotics Institute, inaugurated during the first China-Israel Summit on Robotics, held on September 10 in Guangzhou, China.

“The robotics research and development in Israel is state of the art, 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 many factories that will be interested in the technology developed at the Institute..”

Although the job of the Israel Robotics Association is to foster relationships between Israeli research institutions and local and foreign entities, the Chinese needed little persuading before signing on to the establishment of the Institute, said Shiller. “They see Israel as a true start-up nation, as an important technology power. Also they are very comfortable with Israelis. And Israelis are very happy to work with Chinese, as well.”

“Robots” aren’t just machines with two legs and arms that stiffly march across the room carrying out the bidding of their masters, like on TV and in the movies. Properly defined, a robot is any device that is guided by a computer or electronic circuitry to carry out specific tasks. Robots can be made in any form or size, and deployed in almost any setting. What they have in common is their purpose – freeing humans from repetitive drudge work, and doing that drudge work more cheaply and efficiently.

“There are some jobs that are just not meant for humans,” said Shiller. “People used to carry 50 kilo cement bags on their backs, but it’s because they had to, not because they wanted to. Nowadays we have robots and conveyors to do that work, so people are able to move on to ‘better’ work.”

Shiller also firmly believes that freeing up workers currently engaged in rote factory work – whose jobs will be taken by robots – will eventually find other work that will likely be higher paying, as well as higher status. “Studies have consistently shown that automation does not lead to higher unemployment, but to an expansion of an economy – with more jobs eventually created than are lost. That’s the goal of China.”

The Institute is the first one of its kind anywhere. At the September ceremony, a memorandum of understanding on establishing the Institute was signed by the Israeli Robotics Association and four Chinese companies, in the presence of Israeli and Chinese officials.

Mr. Ouyang Quan, chairman of the board of Shenzhen Huafeng Century Group and of Guangzhou Sino-Israeli Smart Technologies Investment, Ltd., one of the Chinese officials signing on as a charter member of the Institute, said that “we are committed to creating and building a first class robotics institute in the world because we have the courage and audacity to make a change.”

Quan’s company will be a major investor in the Sino-Israeli Robotics and Smart Manufacturing Base, an industrial park that will be built around the Sino-Israeli Robotics Institute. The founding member companies of the Institute plan to invest up to $2 billion in robotics and related industries.

Although largely passed over by Western (and Israeli) media, the inauguration of the Institute was big news in China, with coverage in all major media outlets; already, some of China’s top robotics companies have expressed interest in conducting joint applied research with Israeli research labs via the Institute.

“The Institute will serve as a gateway through which Israeli robotics technology will harness the vast potential of the Chinese market,” said Shiller. “Israel and China are a perfect match in joint robotics research. China has the market and funding resources essential for developing and testing new ideas and commercializing innovative technologies, whereas Israel has the skilled workforce that generates innovative ideas.”