China’s tech boom borrowing the playbook of its property bust

On October 28, 2026, Unitree, China’s top robotics company, released its first quarterly report since going public in Shanghai. Third-quarter profit fell 17.4%, even as the stock traded at more than 465 times earnings. Those numbers explain why its founder, Wang Xingxing, looked so grim on listing day two months ago. Then, on August 19, Wang struck the gong on Shanghai’s STAR Market as Unitree debuted at 445 billion yuan (US$66 billion), yet the new billionaire did not smile. One day later, Xu Jiayin, founder of the property giant Evergrande and once China’s richest man, stood white-haired in court where he was sentenced to life in prison. A Chinese proverb says the waves behind drive the waves ahead, and the waves ahead die on the shore. Most of the commentary those two days saw it as a handover from the old economy to the new. But the state made both men rich in the same way, just two decades apart. Xu’s career was an attempt to turn state authorization into private property, converting land quotas and bank loans that the state can revoke at any time into balance-sheet assets and offshore trusts. His imprisonment shows that such authorization can be withdrawn in full. Wang’s 445 billion yuan valuation rests on similar state backing. Permission to list has become today’s version of the land permit, as Beijing swaps the land in its hands for equity shares. For three decades, local governments paid for China’s build-out by selling land to developers, an engine of land finance that is stalling as the property market shrinks. Its replacement is what Chinese analysts call “equity finance,” which raises public money from shares the state holds rather than from the land it sells. Both models spend tomorrow’s money today. While land was a bet on people moving into cities, the new bet is that technology companies will one day earn what investors have already paid for them. Equity finance is still small beside land finance. In 2025, local governments collected 4.15 trillion yuan from land sales and 464.4 billion yuan from companies they own. Land-sale revenue dropped another 27.9% in the first nine months of 2026. Because dividends alone cannot plug that gap, the source of the money has shifted. Local governments put up money to incubate high-tech companies, the companies get permission to list, and households buy the shares with their savings. Consider ChangXin Memory Technologies, a chipmaker listed on Shanghai’s STAR Market. It had accumulated losses of 36.65 billion yuan on its way up, yet was worth over 3 trillion yuan on its first day of trading. Hefei, an inland city known for betting public money on technology, invested 24.8 billion yuan into ChangXin over 10 years, and its municipal investment platform now holds shares worth nearly 900 billion yuan on paper. This is the Hefei model. Once a company lists, the platform can pledge the shares to a bank for cash that goes into the next up-and-coming company. Shares have replaced land as collateral, and the robust borrowing continues as before. In 2020, Jack Ma criticized Chinese banks for a “pawnshop mentality” in which nothing moves without collateral. Days later, his Ant Group’s planned $37 billion listing was suspended by regulators. Six years on, the pawnshop still stands; only the collateral has changed. The same regulators now fast-track the firms the state has picked. More than 40 robotics companies are now reportedly queuing to list. Unitree won approval in a record 104 days. Persuading Chinese people to spend has been a perennial struggle for Beijing, and this listing wave is designed to put the vast pool of savings sitting in banks to work. A bank deposit earns about 1% a year in China, and capital controls keep savings out of foreign shares and funds. The stock market is the only open door. Yet the STAR Market requires at least 500,000 yuan in stocks and funds and two years of trading experience, so most households cannot buy in directly. Even for those who qualify, the odds of securing an allotment of Unitree shares were one in 5,500. Stamp duty on share trading jumped 57.8% in 2025 and rose another 65.1% in the first nine months of 2026, so savers are helping pay the state’s bills. The approach may produce a few world-class companies. But if the state were good at running businesses, China would not have spent 40 years building a market economy. Under land finance, a city took the cash and moved on. With equity finance, the city stays on as a shareholder and pledges its stock to banks for loans, so any rival from another province that hurts the company’s share price also shrinks the city’s collateral. Once local governments live off their own companies, they will no doubt seek to protect them. That, in turn, would motivate erecting hidden barriers to trade from province to province, undermining Beijing’s goal of a unified national market. Wang’s grim face on listing day answered the question of where wealth comes from in China today: from how close you stand to the people who write the rules. Unitree earned 278 million yuan in 2025. At that pace, earning back its debut valuation would take 1,600 years, a calculation Wang, an engineer, can surely make. Households paid for the property boom with mortgages. They are now paying for China’s tech boom with their savings. Yanyou Chen is a master’s candidate in international affairs at the Lee Kuan Yew School of Public Policy, National University of Singapore.