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Machinery & Industrial Equipment

Chongqing bets on Japan's robot makers for rebound from auto slump

'China's Detroit' welcomes new industry as property bubble looms

A Fanuc robot at a Tokyo trade fair: The company looks to supply cutting-edge manufacturing systems out of Chongqing.   © Reuters

CHONGQING -- The city dubbed "China's Detroit" is rolling out the red carpet for Japanese robot makers as its all-important auto sector stalls, with Suzuki Motor exiting Chongqing while Ford Motor and Hyundai Motor struggle there.

Representatives from over 30 companies worldwide attended the Chongqing Mayor's International Economic Advisory Council on September 28. Kawasaki Heavy Industries CEO Yoshinori Kanehana and Fanuc Chairman Yoshiharu Inaba, along with leaders from Mitsui & Co. and Sumitomo Mitsui Banking Corp., were among those present.

Many Japanese businesses look to expand their presence in Chongqing despite China's economic slowdown. Kawasaki Heavy recently opened a cutting-edge research center at its factory here to develop new uses for industrial robots powered by artificial intelligence.

The company also has begun producing articulated robots, which have multiple joints that allow for complex movements, in the city.

"Chongqing will become a top global market for robots, which are the key to smart manufacturing," Kanehana said at the launch ceremony on Sept. 27.

Fanuc brought a facility online on Sept. 26 so it can supply cutting-edge robotic manufacturing systems.

"China has large potential for growth, and we hope to take advantage of the next surge in demand," Inaba said.

Chongqing's government has welcomed such moves. Mayor Tang Liangzhi lauded the investments by Kawasaki Heavy and Fanuc on Sept. 28, and stressed that Chinese President Xi Jinping is keeping a close eye on the city's growth.

The city is different from coastal metropolises such as Shanghai that prospered earlier. Chongqing was placed directly under the central government so it can serve as the catalyst for economic growth in the country's inland regions. The city's success is considered an indicator for China's growth potential, and Xi has appointed key aide Chen Min'er as Chongqing's Communist Party secretary.

Yet Chongqing's auto industry has struggled of late. Real estate now accounts for nearly 50% of lending by the city's financial institutions, a source familiar with the matter said, fueling fears of a bubble. City authorities aim to lower the figure to 30% by reviving the industrial sector.

Japanese companies hope that by doubling down on investment during the city's challenges, they can get closer to Chen and pave the way to expand their Chinese operations as a whole.

American business leaders seem to be distancing themselves from Chongqing amid growing tensions between the U.S. and China. Several canceled plans to attend the meeting in the city.

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