China's Tech Boom Borrowing The Playbook Of Its Property Bust

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.