At first glance, you might think to yourself, "Cage is low tier; he sucks and has no chance." While it is true Cage has some deficiencies, this is actually one matchup where he has more of a chance than most of the others.
Cage will still have to work for this one, but he does have the tools to keep Lao honest in the air. His arsenal of aa moves, including green balls, uppercuts, and shadow uppercuts, are more than enough to do the job. Counter all blocked bullet kicks with 2xHP, shadow kick for 31% damage. If Lao throws a hat from within sweep range, block and punish with a shadow kick.
Lao's bullet kick must come out fast to take Cage by surprise and get through his defenses. Likewise, getting Cage into the air with an arsenal of hat throws leading into a hat spin can prove massive for Kung Lao. If the game turns into a zoning war, Lao has the edge as he can throw high and low to hit the ducking opponent, or teleport to close the distance.
This match, at a high level, could be 6-4 in favor of Lao. More often though it's probably 7-3, Lao.