Many robot manufacturers are dependent on government subsidies to prop up their businesses and their eventual withdrawal could hurt the delta in the coming years, they warn.

Last month, robotics exhibitions and conferences were held in cities across the region, including Guangzhou, Dongguan and Shenzhen. Large numbers of industrial robots had already been installed on production lines throughout the province, Guangdong deputy governor Xu Shaohua said.

Xu said he hoped Guangdong could encourage more research institutes to develop intelligent robots, as well as production plants, to drive mass innovation.

Municipal governments are competing for a piece of the pie. Guangzhou has set the goal of fostering a robot-manufacturing industry with an output value of more than 100 billion yuan, as well as automating more than 80 per cent of the city's manufacturing production by 2020.

More than 60 per cent of Dongguan's industrial enterprises have reportedly begun replacing humans with robots, while in Foshan the government said the value of the city's automation and robotics market would reach 300 billion yuan in five years.

The cities are handing out between 200 million yuan and 500 million yuan in annual subsidies to robot producers and manufacturers who install robots on assembly lines. Replacing humans with machines has long been debated in the Delta. In 2011, Foxconn Technology founder and chairman Terry Gou Tai-ming said his company planned to have a million robots at its plants within three years after a spate of suicides among Foxconn workers in Shenzhen.

Spurred by the latest policy moves, new manufacturers were "popping up like mushrooms", insiders said.

"There were about 400 robot companies across the country last year. Now, as of the first quarter, the number has reached more than 700, with most in Guangdong," He Zexian, sales director of Foshan-based LXD Robotics, said. "The market is being driven by government policies and right now it's too hot."

He said his company's output was expected to be around 300 million yuan this year, up from 20 million yuan in 2013.

LXD's robots are used in jobs hazardous to human health, such as polishing, welding and moving heavy freight.

The company's polishing and burnishing robots cost between 800,000 yuan and 1.5 million yuan, but can replace as many as six humans.

"Clients can earn their money back within three years," He said.

But he admitted that Chinese robot manufacturing relied heavily on imported materials and technology.

"China lags behind in robotic technology. With rising demand, we will likely see many Chinese manufacturers looking to speed up their development by acquiring overseas companies and their patents," He said.

Only one or two domestic robot companies had the technology for independent production, said Song Jian, assistant director of robotics at Guangzhou-based GSK CNC Equipment, the country's biggest manufacturer and designer of computerised numerical control (CNC) systems.

He said GSK was one of the only Chinese companies that had "no need for imported components". The company sold several hundred industrial robots last year with hopes to more than double that in 2015, Song said.

"We hope that by 2020 our production will reach 30,000 units, valued at between 3 billion and 5 billion yuan," he said.

"Our technology is less mature than overseas competitors, but our robots are about 30 per cent cheaper."

Companies are also offering "total solution" packages.

"The goal is to integrate the entire process," said Deng Qiuwei, general manager of Shenzhen-based Rapoo Robotics, which helps businesses automate their workforce.

"We use the robots as a platform to realign the entire production line, not just replace two or three workers," he said.

Rapoo's demo plant includes two production lines: a traditional system of 110 humans who produce 4,500 wireless mouse units per day, and a new line with robots and 10 workers that makes more than 5,000 a day.

"Clients are easily convinced by our showcase plant, especially when they know they can earn back their investment within three years," Deng said.

Rapoo launched its robot production line business last year, and has landed more than 20 contracts so far.

Despite growth in recent years, insiders are sceptical over whether the boom will last. The preferential policies and subsidies are due to run out in 2016.

"I think a reshuffle will happen in the next two years. Less than 5 per cent of robot-related companies will survive," He said.