China’s humanoid robots have captivated the world. A rental market is exposing their limits

Hong Kong/Hangzhou/Beijing (CNN) — When humanoid robots dominated the stage of last year’s Spring Festival Gala with sleek dance routines, Ai Lin saw more than a spectacle. He saw a business.

Soon after, the e-commerce livestreamer in Hangzhou shelled out $30,000 for his first android and turned it into a rental venture.

Business has been brisk. For 3,000 yuan ($443) a day, customers can hire an android to attract crowds at exhibitions, perform at events or even help stage a marriage proposal.

But his venture has also revealed what viral videos of dancing, flipping Chinese robots have not: the heavily promoted technology is still years away from replacing human labor, whether on a factory floor or in a household.

“The market for humanoid sales hasn’t really taken off yet because today’s robots still can’t operate on their own – they’re basically oversized toys,” he said.

Still, Beijing is betting billions of dollars on humanoid robots as a strategic technology that could increase productivity as economic growth slows and its workforce shrinks. Getting a leg up in the burgeoning industry could also help China pull ahead of the US and other rivals in artificial intelligence and advanced technology.

“Traditionally, industrial capabilities have been controlled by countries like Germany, Japan and the US,” said Lian Jye Su, chief analyst focusing on artificial intelligence and humanoid robots at research firm Omdia. “But with humanoids, it represents a rare opportunity where the whole world may be looking to China for this next pivotal moment.”

The potential for the industry is immense.

Investment bank Morgan Stanley estimates there could be one billion humanoids in use by 2050, representing a market of over $5 trillion, though adoption will not pick up speed until at least a decade from now.

China already dominates the manufacturing and deployment of industrial robots, such as robotic arms in factories. And its humanoid robot makers accounted for the vast majority of the global android deliveries last year, far outpacing American competitors like Tesla and FigureAI.

Earlier this month, Beijing launched a nationwide initiative to accelerate the real-world deployment of humanoids, aiming to deploy them in more than 100 “high-value application scenarios” by the end of this year.

“I do think that by far, the biggest competition for humanoid robots will be from China,” said Elon Musk, CEO of Tesla during a January earnings call. After repeated delays, Tesla’s humanoid Optimus is slated for production later this year.

Rental boom

For Ai Lin, a defining moment came when humanoid robots took the stage with millions watching at last year’s Spring Festival Gala.

“It made me realize that robots are likely to see large-scale adoption in the future,” he said.

The spectacle gave rise to self-starters like Ai who sought to cash in on the growing hype. With retail prices starting around $19,000 for entry models and climbing past $100,000 for advanced ones, rentals offer a more accessible option.

Searches for humanoid robots on Chinese social media platforms, and you’ll be met with a flood of influencers advertising rental services. There are now more than 153,000 robot rental businesses in China, according to state-run media.

Last year, AGIBOT, one of China’s leading makers, launched a rental subsidiary called SHAREBOT and said the robot rental market could reach $1.5 billion by the end of 2026.

Through an online platform, customers can rent a humanoid for as low as 3500 yuan ($517) a day, including shipping costs and a human operator who helps control and program the machine. In three months since it launched, it logged more than 5,500 orders.

Not only is the rental market a promising source of income, it also enables robots to enter real-world scenarios, said Li Yiyan, CEO of SHAREBOT.

“It ultimately helps robots transition faster from mere exhibition pieces to large-scale deployment,” he said.

Similarly inspired by the viral performance, 52-year-old Zhao Xiaohong in Jiangsu province invested in eight humanoids for rentals last year, seeing it as “the fastest way to monetize the technology in the short term.”

But rental business owners like Zhao observed that the rental prices have begun to slide as novelty surrounding these stunt-performing androids fades.

“People start to feel a sense of fatigue when the technology stagnates and stops advancing, with the market flooded with similar types of robots,” Zhao said.

On stage instead of at work

Nowhere is that gap between spectacle and substance clearer than in Yizhuang, a technology hub in southeastern Beijing.

At a futuristic exhibition center that’s become a regular stop for government-organized tours, robotic dogs perform a traditional Chinese lion dance and a humanoid in a Michael Jordan jersey sinks free throws.

But a short walk away from these stunning showcases lies a separate state-backed facility that offers the reason why robots still can’t do much more than putting on a well-choreographed show.

Inside, more than 120 humanoids stand in neat rows, each performing a specific task repeatedly, from sorting packages or changing diapers to scooping popcorn, guided by human trainers with handheld controllers next to them.

The establishment of dozens of facilities like this across China reflects one of the central challenges facing the humanoid robotics industry: despite rapid advances in artificial intelligence, robots still lack vast amounts of physical-world data needed to become truly capable workers.

Chinese humanoid makers pay companies like X-Humanoid up to $150 an hour for physical interaction data, depending on the complexities of these chores, said Jiang Weilai, head of the facility X-Humanoid.

But beyond data, there are also hardware constraints.

Marco Wang, an analyst focusing on Chinese robotics for technology research firm Interact Analysis, said the technical readiness of dexterous robotics hands, for example, are among the lowest in hardware components.

“You have to fit a lot of functionality into a component that’s roughly the size and weight of a human joint. Once you pack that many parts into such a small space, heat dissipation becomes a major hurdle,” he said.

Because of that, these hands suffer from high production costs, poor durability against impacts, short operational lifespans, and there are no existing solutions that engineers can readily draw upon, Wang added.

As a result, the vast majority of demand for these robots has been driven by the Chinese government, and only a small number of them have reached factory floors, mostly in pilot projects.

Even among leading manufacturers, productivity still trails human workers. UBTECH, one of China’s largest humanoid robot companies, told CNN its most advanced models can achieve about 80% of human productivity but only in certain tasks such as box stacking and package sorting.

Race for the future

Still, China is bullish on an automated future.

Today, the country’s embrace of the technology is evidenced by the ubiquity of robots. In Hangzhou, robot traffic police are deployed on busy roads guiding traffic. In parks, some people can even be seen walking their humanoids just like pets. In major cities like Beijing, Shanghai and Shenzhen, you can see robots make coffee, pour beer, or dispense drugs.

“They may still seem a little clumsy, but they’ve started to enter the public eye,” said Joy Zhang, analyst at French bank BNP Paribas.

While this does not necessarily mean Chinese humanoid robots are ahead of the curve compared with Tesla’s Optimus, for example, it reflects a different approach in China: prioritizing early deployment and affordability to drive adoption, Zhang said.

This underscored the rapid development of the technology in China since Beijing first released a policy document focusing on humanoid robots in 2023, positioning them as the “next disruptive product” after computers, smartphones and electric vehicles.

“The rapid evolution of humanoid robot technology has made it the new high ground of technological competition, a fresh frontier for future industries, and a novel engine for economic growth,” the document said.

Leveraging the country’s manufacturing prowess and electric vehicle supply chain, Chinese makers have been able to scale up production while driving prices down faster. Already, there are more than 140 humanoid makers in China, according to a tally by market research firm TrendForce.

But an overcrowded market with little demand has created problems for many to turn a viable return on investment.

“Many second-tier players have seen a sharp pullback in funding and investment activity since last year,” said PK Tseng, research manager at TrendForce.

And just as the rental market of humanoid robots shows signs of cooling and the initial excitement wanes, concerns of an industry bubble have risen.

“The industry’s been deliberately hyped up to a certain extent to tell a story about how strong China is in emerging technology,” said Su of Omdia, who observed a slight decline in interest in the sector from the overall market since the beginning of this year.

Su expects the industry to eventually consolidate around a handful of major players, with the rest surviving on local government subsidies or support from other backers.

The clearest symbol of China’s ambitions may be Unitree, the Hangzhou-based company whose robots became viral sensations, as they charm audience again at this year’s spring festival gala with kong-fu stunts.

Unitree has emerged as the world’s largest humanoid robot maker and is preparing for a public listing in Shanghai later this year. In a recent visit to its Hangzhou headquarters, staff were busy receiving a delegation of Malaysian buyers and another of Chinese government officials concurrently.

Yet even for this frontrunner, the limits of today’s technology remain clear. Research and educational institutions account for the majority of sales, while industrial deployments remain less than 10%.

Asked about when its robots will be able to be deployed to production lines, its Public Relations Manager Yolanda Xie responded cautiously.

“That will likely depend on technological breakthroughs and the overall development of the industry,” she said.

The-CNN-Wire
™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.