The Humanoid Arms Race: Part 5 - Geopolitical Shifts and the Future of Global Power

Introduction: The Culmination of a Technological Revolution 

In our landmark five-part series, The Humanoid Arms Race, we have chronicled the emergence of what may be the defining technological revolution of the mid-21st century. From the economic foundations explored in Part I to the corporate battles detailed in Part II, the technical bottlenecks analyzed in Part III, and the energy infrastructure challenges examined in Part IV, our investigation has revealed a technological transformation with profound implications for global power dynamics.

Now, in this concluding installment, we explore how the convergence of these economic, corporate, and technical dimensions is fundamentally reshaping geopolitical realities and international relations. This watershed moment crystallized what experts now recognize as the most consequential geopolitical shift since the digital revolution. The assessment from US-based research firm SemiAnalysis that China's manufacturing prowess poses an "existential threat" to the United States in the field of robotics represents more than typical competitive hyperbole. 

The report's stark conclusion that China is "the only country that is positioned" to achieve a high level of automation through intelligent robots highlights the strategic dimension of this technological contest. Adding to this perspective, Dr. Richard Haass, President Emeritus of the Council on Foreign Relations, has consistently emphasized the pivotal role of Sino-American relations in shaping the 21st century. 

In his remarks at the IPI International Peace Institute in June 2020, Dr. Haass stated that the Sino-American relationship

"will go a long way towards determining the character of the 21st century." 

He noted that while a Cold War-like atmosphere has emerged, containment of China is no longer a viable option due to its deep integration into the global economy. "The real question will be, 'Can we compete with it?" he posited. 

For a deeper understanding of Dr. Haass’s perspective on the Sino-American relationship and its global implications, watch the full interview below. In this high-profile IPI event, Dr. Haass offers sharp insights into the strategic challenges and opportunities ahead, explaining why competition with China remains one of the defining issues of the 21st century.

This competition, particularly in the realm of embodied AI and robotics, will determine the pace of change and the widespread deployment of automation across the Pacific. 

Haass advocates for American diplomacy to seek a strategic understanding with China, achieved multilaterally with allies in Europe, Tokyo, Seoul, and Australia, to ensure that inevitable competition does not preclude cooperation on regional and global challenges where overlapping interests exist. This nuanced approach underscores the complexity of the humanoid arms race, where technological supremacy is intertwined with delicate geopolitical balancing acts.

In speaking about the rise of China, Dr. Henry Kissinger, provided valuable insights at Davo in 2022. The former US Secretary of State was Interviewed by World Economic Forum Founder and Executive Chairman, Klaus Schwab. The forum provided an extraordinary opportunity, as Mr. Kissinger reflected on his experience in negotiating with Beijing over five decades ago: "When we opened diplomatic relationships with China in the 1970s, we did it with a sense that we're starting a permanent relationship.” 

Henry Kissinger noted that the potentially adversarial aspect of the US-China relationship should be mitigated and common interests should be pursued and upheld. 

"The US," he says, "must realize that China's strategic and technical competence has evolved. Diplomatic negotiations must be sensitive, informed and unilaterally strive for peace."

The Geopolitical Crucible of Humanoid Robotics

China's Strategic Ascent and Economic Independence

China's aggressive pursuit of leadership in humanoid robotics is not merely an industrial ambition; it is a cornerstone of its broader geopolitical strategy for economic independence. The nation's "Robot 2035" initiative, backed by substantial funding, systematically targets every link in the humanoid supply chain, from raw materials to manufacturing. This comprehensive approach, integrating industrial policy, energy infrastructure, and technological innovation, has allowed China to build an entire ecosystem geared for mass production and deployment. Specialized manufacturing zones, like those in Shenzhen and Chongqing, are now home to state-backed firms producing hundreds of thousands of humanoids annually, supported by dedicated power infrastructure. This strategic push for self-sufficiency is further evidenced by China's detailed plan to upgrade its IT manufacturers by 2027, aiming for over 85% automation in key processes and the cultivation of specialized service providers. 

China's ambition extends beyond mere manufacturing. Its multi-billion dollar program, exemplified by BYD's Zhengzhou megafactory in Henan province, represents a revolutionary leap in automated manufacturing. Spanning 50 square miles (130 km²) upon completion—larger than San Francisco—this facility, under construction since 2023, showcases unprecedented automation:

• 100% automated painting using advanced robotics
• 131 welding robots achieving >90% automation in body assembly
• 300+ AGVs (automated guided vehicles) for material handling
• 97% automated processes at key plants through intelligent warehousing and real-time monitoring
• Custom-developed tire installation machines completing all four wheels in 48 seconds

The facility integrates over 10,000 industrial robots from partners like Dobot and ForwardX Robotics, with AI-driven quality control systems halting production lines instantly upon defect detection. 

To see how this strategy translates into action, a recent CGTN report offers a behind-the-scenes look at NIO’s Second Advanced Manufacturing Center in Hefei, Anhui Province. The video highlights how one of China’s leading EV makers is leveraging automation, smart design, and battery-swapping innovation to target the premium electric vehicle market. Watch the full tour here:

This industrial transformation is underpinned by strong government backing, enabling national champions like BYD (electric vehicles), Huawei (telecommunications), and Unitree (robotics) to scale rapidly. A clear example of this momentum can be seen in Unitree’s Go2—an agile, AI-powered robot dog designed for real-world applications. Watch the demo here:

Looking ahead, China plans to establish a centralized industrial database by 2030 to elevate its position at the high end of the global value chain. This roadmap—published by key ministries—marks a strategic extension of the “Made in China 2025” initiative, reinforcing the country’s long-term goal of technological self-reliance.

The Weaponization of Technology and Global Supply Chain Reconfiguration

This drive for economic independence has been intensified by external pressures, notably the Trump-era tariffs and China's manufacturing overcapacity. While these "twin shocks" have led to a noticeable reconfiguration of global supply chains, China has responded by diversifying its trade, particularly towards the Global South. Despite U.S. tariffs, China's exports have surged, demonstrating its resilience and strategic adaptability. 

While restocking ahead of anticipated tariffs contributed modestly to late-2024 growth, the dominant driver was China’s pivot to the Global South. Backed by infrastructure investments under the Belt and Road Initiative, China’s exports to developing economies now exceed its shipments to developed markets. In December alone, China exported US$137 billion to the Global South, compared to $108 billion to all developed countries—a gap that continues to widen.

The chart above illustrates how China’s export growth in 2024 overwhelmingly favored emerging markets—especially countries like Azerbaijan, Algeria, Brazil, and Indonesia—while exports to the U.S., Japan, and Australia either stagnated or declined. This rebalancing of trade relationships reflects not only economic diversification but also a deliberate geopolitical strategy to reduce dependency on Western markets in anticipation of continued tech decoupling and national security restrictions.

The provisional trade framework between the U.S. and China, while stabilizing rare earth supply chains, highlights the persistent tension. As U.S. Treasury Secretary Scott Bessent noted, this de-escalation is not a reversal of strategic decoupling, as the underlying competition in technology and national security remains.

In a recent CNBC interview, Bessent emphasized:

“We do not want a generalized decoupling from China. But what we do want is a decoupling for strategic necessities, which we were unable to obtain during Covid and we realized that efficient supply chains were not resilient supply chains.”

This competition is starkly evident in the humanoid sector, where Chinese manufacturers control a significant majority of global production capacity and critical components, leading to Western dependence. U.S. Commerce Secretary Howard Lutnick has explicitly stated the U.S. commitment to defending its technological supremacy in this AI race, acknowledging the uncomfortable reality that China now controls critical technology supply chains.

This strategic focus is playing out visibly on the ground. A recent video from The Business Times captures China’s rapid progress in humanoid robotics, showcasing how government subsidies and private innovation are converging to produce robots designed to replace human labor at scale. Watch the full video here:

The Military Dimension and National Security Imperatives

Beyond commercial applications, the military implications of humanoid robotics are increasingly significant. Both China and the U.S. are exploring humanoid applications in defense, from logistics to potential combat operations. The U.S.-China semiconductor trade war and China's restrictions on critical minerals like antimony further highlight vulnerabilities in defense supply chains. While some Chinese robotics firms, like Unitree, deny military sales and have pledged against weaponization, concerns persist. 

Senator Katie Boyd Britt and Jacob Helberg have warned that China has already deployed armed robotics, urging the U.S. to avoid falling behind in this critical technology to prevent fatal disadvantages on the battlefield. This military dimension underscores the urgent need for international norms governing humanoid deployment to prevent a destabilizing arms race.

“We need to procure and develop this technology independent from China. The Defense and Homeland Security departments are already required by law to source some war-fighting technologies domestically. But humanoids could fit into statutory exceptions to these requirements.” reaffirms Sen. Britt

Middle Powers and the Scramble for Resilience

The geopolitical shifts driven by the humanoid arms race have profound implications for middle powers like Australia, Canada, India, and Germany, and other European nations. These countries are grappling with the challenge of sustaining long-term strategies and alliances without succumbing to Chinese dependencies for critical resources such like batteries and rare earths. Australia, for instance, is strategically leveraging its vast reserves of battery minerals to become a key player in processing and manufacturing advanced battery components, a vision articulated by former Prime Minister Scott Morrison. 

This struggle for independent access to vital materials and advanced manufacturing processes is bringing energy policy and advanced manufacturing to the forefront of government policy discussions globally. Leaders worldwide are striving to build resilient supply chains and foster domestic innovation to counter external dependencies, aiming to ensure a more balanced and secure global landscape where their technological and economic destinies are not dictated by a single dominant power. 

The American Response: Innovation vs. Infrastructure

The United States' response to the humanoid challenge reflects both its technological strengths and infrastructural weaknesses. American firms maintain significant advantages in advanced AI algorithms, software integration, and specialized applications, with companies like Boston Dynamics, Figure AI, and Tesla's Optimus division producing the world's most sophisticated (albeit expensive) humanoid platforms.

"Silicon Valley still leads in creating humanoids that can handle truly unstructured environments and complex decision-making," argues Dr. Fei-Fei Li, Co-Director of Stanford University's Human-Centered AI Institute.

In a 2017 interview with Xinhua, Dr. Li did discuss China's rise in AI research and the importance of international collaboration, stating, "China is a rising country of AI work and research," and emphasizing the need for cooperation between major countries. She also noted the global shortage of AI talent and the importance of inclusivity in the field

The Biden administration has attempted to address this imbalance through the 50 Billion CHIPS and Science Act and the more recent $ 15 Billion Advanced Robotics Initiative, which aims to establish domestic production capabilities for critical humanoid components. However, energy infrastructure remains a significant constraint, with the Department of Energy warning that full-scale humanoid deployment could require up to 200 TWh of additional annual generation capacity by 2040.

Washington’s growing activism in tech policy underscores a fundamental shift from laissez-faire tradition to strategic statecraft, driven by an escalating Sino-American rivalry. Beijing’s ability to marshal national resources—compelling firms to share data and directing capital toward priority sectors—has exposed how fragile a purely market-led U.S. approach can be when competition becomes geopolitical. Industry advocates such as the Association for Advancing Automation now warn that without federal leadership, the United States risks forfeiting both the robotics and AI races, surrendering critical levers of economic power and national security.

Responding to this threat, the Special Competitive Studies Project (SCSP) delivered a blunt memorandum to President Donald Trump, urging a tectonic policy shift: accelerate robotics deployment across every industrial vertical. 

At the heart of its proposal is a “Data Foundry for Robotics and Industrial AI,” a secure, tiered-access repository of real-world factory data—precisely the spatial and kinetic information embodied-AI systems need to learn how objects move, interact, and can be manipulated. Unlike China, which can mandate corporate data disclosure, the United States must entice voluntary participation while safeguarding commercial secrets; the foundry is designed to do exactly that, linking private datasets to the new AI for Resilient Manufacturing Institute within the Manufacturing USA network.

Critically, this initiative dovetails with the Trump administration’s reshoring agenda. Rebuilding domestic manufacturing is not just about jobs; it is about ensuring that the hardware and software of the next industrial era are made—and continually upgraded—on American soil. Advanced robotics, fed by a national data commons and guided by federal strategy, would blunt China’s current advantage and recalibrate the balance of technological power. 

The contested future is in today’s reality- we are living in an era where advanced manufacturing factory floors double as geopolitical battlegrounds, robotics is no longer a niche engineering pursuit; it is a strategic imperative shaping the future of U.S.–China relations and, by extension, the emerging multipolar order.

Series Summary: The Humanoid Arms Race - A Landmark Investigation

Our five-part investigation into "The Humanoid Arms Race" has mapped the contours of what may be the defining technological and geopolitical transformation of the mid-21st century. Beginning with the economic foundations and market projections of a $60 trillion industry, we proceeded to examine the corporate battles reshaping traditional industry boundaries, the technical bottlenecks that could determine winners and losers, the critical energy infrastructure challenges that few have fully calculated, and finally, the profound geopolitical implications that extend far beyond commercial competition.

What emerges from this comprehensive analysis is a picture of technological revolution that transcends any single dimension. The humanoid revolution represents not merely an evolution in manufacturing or labor but a fundamental restructuring of global power dynamics with implications for economic development, national security, and international relations. 

The convergence of artificial intelligence with advanced robotics creates systems capable of transforming every sector of the global economy while simultaneously reshaping the strategic calculations of nations.

This series marks only the beginning of the AI Diplomat team's ongoing investigation at the Cyber News Centre into embodied AI, humanoids, and mass-scale robotics. As we continue to distill, unpack, and analyze these developments throughout 2025 and beyond, our research will track how this technological revolution unfolds across industry, production, and society. The introduction of mass-scale deployment in the coming years will pave the way for Industrial Revolution 4.0, with implications that extend far beyond economics to the very foundations of global order. The humanoid arms race has only just begun, and its ultimate trajectory will depend on the choices made by governments, corporations, and societies in the decisive decade ahead.

Sources: Analysis from Interviews with officials and interpretations by experts from  Foreign Policy , MIT, Tsinghua University, European Institute for Strategic Technologies, CSIS, Fraunhofer Institute, Deutsche Bank, Australian Ministry for Industry and Science, Tokyo University, Samsung Robotics, Stanford Human-Centered AI Institute, Hoover Institution, U.S. Army Futures Command, Harvard Kennedy School of Government; analysis of policy documents from China's "Robot 2035" initiative, EU's "Robotique Avancée," Australia's "Advanced Manufacturing 2040," Japan's "Society 5.0," and the U.S. Advanced Robotics Initiative.