The CEO of ABB, a multinational robotics firm, has expressed disappointment with the current state of the Chinese market. He anticipates that the conditions will remain challenging for the rest of the year.

Bjorn Rosengren, the CEO and chairman of ABB, stated in an interview with that China has not developed as expected, primarily due to a decline in the real estate sector and the heavy debts faced by the industry. This decline has negatively impacted ABB’s residential construction segment, which is more cyclical and susceptible to changes in the economy.

Rosengren further expressed his pessimism about China, stating that the recovery from the COVID-19 pandemic has been disappointing. Although China remains a significant market, it is not developing as hoped.

As one of the leading industrial manufacturing companies globally, ABB’s performance serves as an indicator of the manufacturing sector’s health and the broader economy. China, known as “the world’s factory,” is the company’s second-largest market.

Despite its challenges in China, ABB is a prominent player in the Chinese robotics market, accounting for over 90% of sales from locally-made products, solutions, and services.

In the second quarter of 2023, ABB reported an increase in orders and revenues. However, in China, the company experienced a decline in order intake during the same period.

Over the past three years, more than 50 Chinese property developers have defaulted or failed to make payments, according to credit ratings agency Standard and Poor’s. The Chinese real estate sector has been in turmoil, exemplified by the financial troubles of Evergrande, a heavily indebted property developer.

Economists have raised concerns about structural issues in China’s economy, including high levels of debt, an aging population, youth unemployment, and tensions with the United States.

Amidst these challenges, ABB sees a silver lining in the electric mobility sector, particularly in China. The CEO highlighted the growth of electric vehicles globally and the positive impact it has on the robotics market.

ABB is currently planning an initial public offering for its e-mobility business, which has already attracted significant investment.

Despite the difficulties faced by ABB’s e-mobility division, the company remains optimistic about the future of green energy and the need for infrastructure development in electrification globally.