Chinese innovative small businesses are growing rapidly
China is stepping up efforts to create local âhidden championsâ – small and medium-sized enterprises (SMEs) that dominate major markets in niche sectors. Since 2018, the country has announced three lists of innovative SMEs, totaling 4,900 companies, which it describes as “little giants”.
To be on the list of small giants, an SME must have a high market share, have a significant capacity for innovation and master basic technology, according to the Ministry of Industry and Information Technology (MIIT). . The ministry expects to see about 10,000 such companies emerge over the next three to five years.
These âlittle giantsâ are already on the way to achieving this goal. Some of them even gained opportunities during the COVID-19 pandemic. For example, demand for Shanghai-based TMI Robotics robots was increasing even before the pandemic. Since it primarily targets high-end medical service robots, its disinfection robots were already in use in many hospitals across the country since its inception in 2015.
Pan Jing, CEO of the company, said it was mainly because robots in medical services have many applications, such as preventing cross-infection in intensive care. Although he admits that it is still a niche industry, he is confident to stimulate the development of the industry by producing more innovations.
Pan pointed out that the government is also offering help to advance small businesses like his. Being recognized as a âlittle giantâ is a big step forward, as it will help businesses with their financing. Investors will recognize their growth potential and customers will have more confidence in their products because they are recognized by the government, not just a third party institution. This will boost the development of the company, Pan said.
MIIT data shows that most of these companies manufacture high-end equipment, new materials, and drugs. There are 262 small giants in Shanghai, and industry analysts say coming together in cities like Shanghai will create new opportunities for new businesses.
Patrick Liang, partner of EY Assurance, explained that Shanghai’s solid economic base is likely to attract professionals and investors, which meets the demand of companies, as they must “invest a lot in R&D”.
At the end of August, more than 300 giant small companies were listed on the A-share exchange, with a total market value of over 2.96 trillion yuan ($ 463 billion). They are also expected to get a lot of support from the new Beijing Stock Exchange, focusing on innovative companies, which launched last month. The hope is that the little giants will continue to grow and play ever more important roles in their industries.