Chart of the Week: Europe vs China's battle in robotics investment

Macro

Christopher Dembik

Head of Macro Analysis

Summary:  Our 'Macro Chartmania' series collects Macrobond data and focuses on a single chart chosen for its relevance.


Click here to download this week’s full edition of Macro Chartmania.

The pandemic served as a wake-up call to European governments on the urgent need to reduce economic dependence on the rest of the world, notably Asia. Many European leaders, including French president Emmanuel Macron, have highlighted the urgency to relocate strategic supply chains in Europe. The EU is broadly self-sufficient, especially in agricultural commodities, but it is not certain it can regain autonomy in other products and goods where it is not self-sufficient yet. Relocation takes time, requires a lot of political will and a solid pre-existing industrial base in the host countries. It is especially necessary to reach a high level of robotization in factories in order to increase efficiency in production.

In the below chart, we have plotted robotics investment defined as the supply of industrial robots per year for the main global economies based on data released by the International Federation of Robotics (see here for methodology). It appears that the EU as a whole has made progress in this area over the past years, reflecting mostly an acceleration in robotization in CEE, but it is still lagging significantly behind China in robotics investment. This year, the supply of industrial robots is expected to reach 82K in Europe versus 250K in China. China is investing three times more than Europe in the key segment of industrial robots. Based on a country by country basis, the gap is even worse. France’s flat curve should not mislead you. The country has started to really invest in robotics since 2015-16 on the back of fiscal incentives, but the results are still too insufficient. In 2020, France will invest four times less than Germany – which certainly provides some explanation for why the country is lacking competitiveness.

And things are unlikely to change anytime soon for Europe. In the context of the seven-year Multi Financial Framework currently negotiated at the EU level, and that should be discussed today by President Macron and Chancellor Merkel at Meseberg, we estimate that the total package allocated to reduce reliance on extra-EU trade and push to supply chain relocation would represent, at best, 0.08% of EU GDP per year – mostly as part of the Horizon Europe Program. The least we can say is that it is clearly not enough to reduce economic dependence on Asia and especially China.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed here or within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.