China’s ‘Vacating the Cage’ Policy: Tech Giants Rise as Traditional Firms Fade

The meteoric rise of Unitree Robotics serves as a definitive case study for China’s shifting economic DNA. In less than a month, the startup’s humanoid robots have performed on global television while its facilities hosted high-profile diplomatic visits from leaders like German Chancellor Friedrich Merz. This visibility is not merely a product of technological prowess but is deeply rooted in a deliberate state-led pivot that prioritizes 'new productive forces' over the labor-intensive manufacturing that once defined the Chinese miracle. As Beijing doubles down on artificial intelligence and robotics, the domestic corporate landscape is being bifurcated into state-sanctioned 'darlings' and a traditional private sector increasingly left to fend for itself.

At the heart of this transformation is the industrial upgrade strategy colloquially termed 'vacating the cage for new birds.' This policy involves the literal and metaphorical removal of older, lower-value industries to make room for high-tech enterprises. In the eastern city of Ningbo—a critical industrial hub that recently secured the 11th spot in China’s city economy rankings—this strategy has moved from theory to disruptive practice. To accommodate the expansion of Unitree Robotics, the municipal government has initiated the relocation of plastic and garment factories that have operated in the Wangchun Industrial Park for over two decades. While relocation compensation is offered, the message is clear: the land and capital that sustained the 'old economy' are now reserved for the technological frontier.

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The meteoric rise of Unitree Robotics serves as a definitive case study for China’s shifting economic DNA.

The implications of this resource reallocation are profound. For the high-tech sector, the benefits include not only land and subsidies but also a level of political capital that opens doors to international markets and state-backed financing. Unitree’s founder, Wang Xingxing, has become a fixture at government events, symbolizing the new archetype of the Chinese entrepreneur. However, this preferential treatment creates a stark divide. Jiang Yuhao, a researcher at the South China University of Technology, warns of an 'ice age' for the broader private economy. While tech firms bask in the glow of state support, countless traditional manufacturers face rising costs, regulatory pressure to relocate, and a dwindling share of the national spotlight.