Humanoid Robots Could Offset 60% of China’s Labor Shortage by 2035, Barclays Says

• Manufacturing and factory work
• Logistics and warehouse operations
• Commercial and service roles
• Healthcare and elder care

Automation is already expanding in many of these industries as companies respond to labor shortages and rising wages. Robotics systems increasingly complement human workers rather than fully replacing them.

The rise of “physical AI”

The Barclays research highlights a structural shift in how artificial intelligence affects the economy.

For the past decade, most AI adoption has focused on digital tasks—such as software automation, data analysis, and content generation. Humanoid robots extend AI into the physical world, allowing machines to perform manual work that historically required humans.

According to Barclays, this transition could reshape productivity, labor markets, geopolitics, and long-term investment returns as intelligent machines become embedded in real economic activity.

Implications for the global humanoid robotics market

If China deploys robots at the scale suggested by Barclays, it would become one of the largest drivers of demand for humanoid robotics.

Barclays estimates the global humanoid robotics market could reach about $200 billion by 2035, reflecting rapid technological progress and rising demand for automated labor.

Several trends support this growth:

• Major advances in AI reasoning, actuator systems, and battery technology
• Significant reductions in production costs over the past decade
• Persistent labor shortages in manufacturing and logistics worldwide

These developments are helping move humanoid robots from early prototypes toward commercial deployment across industries.

China’s advantage in robotics manufacturing

China already holds a strong position in industrial robotics and automation.

Government data indicates the country’s robotics industry generated nearly 240 billion yuan (about $35 billion) in revenue in 2024, with strong growth continuing into 2025.

China also benefits from a concentrated robotics supply chain, large-scale manufacturing capacity, and strong policy support for automation technologies. Some forecasts suggest China could account for a large share of global humanoid robot deployments in the coming years.

If these trends continue, the country could replicate its earlier success in electric vehicles and solar manufacturing—becoming both the largest market and a major producer of humanoid robots.

Potential impact on productivity and economic growth

Humanoid robots could help China maintain output even as its labor force shrinks.

Early industry estimates suggest current humanoid robots can achieve around 30–40% of the productivity of a human worker, with improvements expected as the technology evolves. Some projections suggest productivity could approach 80% of human performance within a few years as AI and hardware improve.

If robots become cheaper and more capable, large-scale deployment could:

• Stabilize manufacturing capacity
• Increase capital intensity in production
• Support long-term productivity growth despite demographic decline

However, the actual economic impact remains uncertain because adoption will depend on cost, reliability, regulatory factors, and real-world performance.

What this means for global manufacturing competition

China’s manufacturing sector relies heavily on scale and efficient labor. A shrinking workforce threatens that model, but robotics could help preserve it.

By automating routine physical work, humanoid robots could allow factories to maintain or even expand output with fewer workers. That would help China retain competitiveness in sectors such as electronics, machinery, and logistics-intensive industries.

At the same time, widespread robotics adoption could intensify global technological competition as countries race to develop and deploy advanced automation.

Limits of the forecast

Barclays’ projections rely on demographic assumptions and technology trends, and the full report details are not publicly available. That means several key uncertainties remain:

• The true cost curve for humanoid robots
• The speed of large-scale deployment
• Regulatory and workplace adoption barriers

The available research also provides limited evidence on how this shift might affect commodity-exporting countries or the precise macroeconomic impact.

What is clear is that demographic pressure is pushing China toward automation at an unprecedented scale—and humanoid robots may become a central part of that transformation over the next decade.