Xu Xiaolan, secretary-general of the Chinese Institute of Electronics, said the government is supporting the robotics push, as China needs to replace several outdated industries and manufacturing techniques to sustain growth in the long term.

"More favorable policies and subsidies for robotics are likely next year, especially to boost innovation," Xu said.

"The government should make sure that the investment goes to the right research areas - the ones that bottleneck local manufacture of robots."

Xu said Chinese companies should look at overseas markets for growth, as other developing markets will also face problems like surging labor costs.

Wang Weiming, deputy director of the equipment department under the Ministry of Industry and Information Technology, said the government is considering a 13th Five-Year Plan (2016-20) for industrial robots. The development plan is expected to lift growth prospects for local companies once the policies and funds are put in place.

Most of the current subsidies for robotics companies come from local governments. "There is no doubt that the industry needs a clear, long-term strategy. It should map out the long-term goals and allow the market to work out the modalities," Xu said.

The young industry needs government support as well as social investment, said Wang from Beihang University.

"The industry is particularly attractive for Chinese investors because of the huge market potential. Venture capitalists will be more than willing to set up incubators for startup robot companies," he said.

Chinese robot suppliers sold nearly 9,600 industrial robots last year, representing roughly 1 billion yuan in sales value, said the CRIA report. Food, beverages, daily commodities, pharmaceuticals and material manufacturing were the hottest sectors for made-in-China robots.

Experts said the government should invest more in frontier robotic research while supporting commercial robot development by local companies.

"Looking forward, the robot- making industry should fully embrace the ideas of market competition so that home-brands will become more technologically competitive in the long run," Wang said.

Tang Qingmei in Changsha contributed to this story.

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