Why China’s red-hot tech push is leaving some traditional sectors out in the cold

With its cutting-edge humanoid robots busting moves on the world’s most-watched television programme and German Chancellor Friedrich Merz touring a company factory during a state visit, both within the last month, Unitree Robotics – already a household name in China – has seen its profile move into the stratosphere.

And local government officials, eager to burnish their economies by strengthening ties to up-and-coming businesses, have made the domestic start-up’s founder and CEO Wang Xingxing a feted guest at events.

The mayor of Ningbo, Wang’s hometown in the eastern province of Zhejiang, made a deal with the company the centrepiece of a plan to move up the rankings of China’s city economies. It won 11th place last year, one spot behind Nanjing, capital of neighbouring Jiangsu province, and ahead of the northern municipality of Tianjin.

To free up room for “new darlings” such as Unitree, Ningbo’s government offered relocation compensation to several plastic product and garment factories that had operated in the city’s Wangchun Industrial Park for more than two decades.

The city is one of many localities in China to implement an industrial upgrade strategy colloquially referred to as “vacating the cage for new birds”: reallocating land formerly ceded to traditional manufacturers and encouraging hi-tech enterprises to take their place.

The difference in treatment is a reflection of Beijing’s fast-changing economic priorities, as the central government’s preferences in resource allocation affect the development paths of Chinese companies and reshape the country’s corporate landscape.

“Red-hot tech firms coexist with countless other private players who shiver in an ice age,” said Jiang Yuhao, a senior researcher at South China University of Technology’s Institute of Public Policy in Guangzhou.

South China Morning Post