--- - |2 Abstract This article explores a historic rural craft tradition as the focus of economic development through the valorisation of the local cultural heritage, or culture economy. The case‐study traces the revival of bamboo birdcage making in Da’ou village in Shandong Province, where the craft knowledge of making birdcages once prized by the Chinese imperial court has been passed on through generations and protected from outsiders. Since economic reforms in the 1980s, the birdcage craft has again become the major activity in Da’ou village, responding to new urban market demands, and bringing prosperity. Yet, through a conceptualisation of cultural heritage as a ‘prosaic third space’, the article reveals the dynamics and tensions involved in the incorporation of the birdcage tradition in local economic development strategies and the promotion of e‐commerce and tourism, and the processes of abstraction initiated. As such, it raises questions about the relationship between craft, knowledge and place that resonate beyond China. The research is based on semi‐structured interviews conducted in 2016 with respondents including local leaders, craftspeople, suppliers, and sellers. - 'Sociologia Ruralis, EarlyView. '