Hangzhou, China – A recent visit by German Chancellor Friedrich Merz to Unitree Robotics, a leading Chinese manufacturer of humanoid robots, underscores a significant shift in China’s economic priorities. The visit, coupled with demonstrations of Unitree’s advanced robotics – including videos of the robots performing martial arts that have gone viral – highlights the government’s increasing focus on high-tech industries and a willingness to prioritize them over established sectors. This strategic realignment is already reshaping the economic landscape, creating opportunities for innovative companies while leaving some traditional manufacturers struggling to adapt.
The spotlight on Unitree isn’t merely symbolic. Local officials are actively courting the company, recognizing its potential to drive economic growth and elevate their cities’ standing. Wang Xingxing, founder and CEO of Unitree Robotics, has turn into a prominent figure, invited to key events and lauded for his company’s advancements. This preferential treatment, although, comes at a cost, as evidenced by the experiences of businesses in cities like Ningbo.
Ningbo, a coastal city in Zhejiang province, is actively implementing a strategy known as “vacating the cage for new birds” – a deliberate effort to reallocate land previously used by traditional manufacturers to attract high-tech enterprises. As part of this initiative, the Ningbo government offered relocation compensation to plastic product and garment factories that had operated in the Wangchun Industrial Park for over two decades, according to reports. The goal is ambitious: to climb the ranks of China’s city economies, currently holding 11th place, just behind Nanjing and ahead of Tianjin.
This isn’t an isolated case. Across China, local governments are adopting similar strategies, reflecting a top-down directive from Beijing to prioritize innovation and technological advancement. The central government’s resource allocation decisions are fundamentally altering the competitive landscape, creating a stark contrast between thriving tech firms and struggling traditional industries.
The Rise of China’s Robotics Sector
Unitree Robotics’ success is emblematic of the rapid growth within China’s robotics sector. In 2025, the company shipped over 5,500 humanoid robots and completed mass production of more than 6,500 units. Globally, approximately 16,000 humanoid robots were installed in 2025, with China accounting for over 80% of that total, according to data from CounterPoint Research. Chinese firms dominate the top five rankings, with AGIBOT, Unitree, UBTECH, and Leju claiming four of the spots.
This dominance isn’t limited to domestic markets. Chinese robot manufacturers are increasingly expanding their global reach. AGIBOT, for example, officially entered the Italian market in January 2026 following a launch event in Milan and opened its first overseas robot experience center in Malaysia, marking the country’s first AI robot facility.
A Two-Tiered Economy Emerges
The shift towards prioritizing tech isn’t without its consequences. “Red-hot tech firms coexist with countless other private players who shiver in an ice age,” observed Jiang Yuhao, a senior researcher at South China University of Technology’s Institute of Public Policy in Guangzhou. This disparity highlights a growing two-tiered economy, where innovative companies receive significant government support while traditional sectors face increasing pressure.
The German Chancellor’s visit to Unitree Robotics, documented in videos on platforms like YouTube and Facebook, symbolizes this new dynamic. Merz examined the company’s components and observed demonstrations alongside Wang Xingxing, CEO of Unitree. A photo of the visit was also published by the South China Morning Post showing Merz being given a tour by Wang Xingxing.
What’s Next for China’s Industrial Strategy?
China’s industrial upgrade strategy is likely to continue, with further investment and support directed towards emerging technologies like robotics, artificial intelligence, and advanced manufacturing. The government’s commitment to these sectors will likely intensify as it seeks to establish China as a global leader in innovation. The fate of traditional industries, however, remains uncertain, dependent on their ability to adapt and integrate new technologies or find niche markets where they can remain competitive. The coming years will reveal whether this bold strategy will lead to sustained economic growth and a more balanced industrial structure, or exacerbate existing inequalities.
What are your thoughts on China’s industrial strategy? Share your comments below and let us know how you believe this shift will impact the global economy.
