Elon Musk believes humanoid robots, like Tesla’s Optimus, could generate up to $10 trillion in revenue, but China is rapidly closing the gap. In a high-profile Lunar New Year performance, humanoid robots from Chinese company Unitree captivated audiences, showcasing their capabilities, including dancing and performing stunts. While mass production is still a few years away, robotics are gaining traction as potential game-changers in household and caregiving tasks.

China is investing heavily in humanoid robotics, aiming to become a global leader like it did with electric vehicles. Local companies like Unitree, UBTech, and BYD-backed Agibot are scaling up production, with government funding totaling $10 billion. China’s dominance in industrial robotics gives it an edge in mass production. However, the country still faces challenges in advanced technologies such as AI chips and high-precision sensors, which are mostly controlled by Western firms.

Despite these hurdles, China’s price competitiveness is a strong advantage. Robots like Engine AI’s PM01 are priced much lower than Tesla’s Optimus, which could help drive the mass adoption of humanoids in the coming years, especially as China faces a shrinking workforce.