Ministry of Industry and Information Technology to promote 3,000 “little giant” companies

The Ministry of Industry and Information Technology (MIIT) aims to cultivate 3,000 “little giant” companies this year, which will help enhance the resilience of industrial supply chains and boost the innovation and vitality of the economy. The phrase “little giant” refers to small and medium-sized enterprises that focus on a market niche and master key technologies with a strong innovation capacity and big market share. Xu Xiaolan, Vice Minister of Industry and Information Technology, said SMEs are a significant force to maintain the security and stability of the industrial and supply chains. Policies will encourage large enterprises to open the market, technologies, and talents to SMEs, Xu said, adding SMEs will enjoy more policy support. The move is part of China’s broader plans to promote the high-quality development of SMEs, which are vital for stabilizing growth and creating jobs.

By 2025, the country aims to develop one million innovative SMEs, 100,000 SMEs that specialize in niche sectors and 10,000 “little giant” companies. Under the plan, the country will take steps to make its policies more efficient and targeted, implement tax policies conducive to the development of SMEs, further lighten the burdens of SMEs, build a system to effectively serve the SMEs and ensure a level playing field. More efforts will also be made to prevent and stop monopolistic behavior that exclude and limit the participation of SMEs in fair market competition, crack down on all kinds of unfair competition and guide financial institutions to increase support for SMEs.

Dong Xiaoyu, Senior Expert at Zhongguancun Development Group, said SMEs are facing difficulties and challenges such as the Covid-19 pandemic, rising raw material prices and high logistics costs. Dong said the plans will help the government to have a better understanding of the current situation of SMEs and focus on increasing support for SMEs, which will help stabilize the economy. MIIT data showed that as of November, China had incubated more than 4,762 national-level “little giant” enterprises.

Qu Xianming, Manufacturing Industry Analyst, said innovative SMEs are a key link in the entire industrial chain and their role is irreplaceable. Cultivating globally competitive “little giants” can help China better stabilize the supply chain and seek high-quality development in manufacturing, he said. “China lags behind developed countries in making certain high-end industrial components, and the efforts to nurture SMEs that specialize in one or two products can help the country achieve breakthroughs in crucial areas and complement its industrial structure,” Qu said. In 2020, the China SME Development Fund Co, a fund with registered capital of CNY35.75 billion, was set up in Shanghai to promote the sustainable growth of SMEs in key sectors. The Ministry of Finance acts as a limited partner to the fund with a 42.66% stake amounting to CNY15.25 billion.

Amid the Covid-19 pandemic, the central government has also rolled out a set of policies, including tax rebates, to help SMEs resume work and solve financial difficulties. Cao Yuteng, CEO of FlexBot, a self-driving technology startup in Guiyang, Guizhou province, said he is very excited to see the government’s commitment to help SMEs. “Despite short-term difficulties amid the pandemic, we are working hard to use technologies to improve efficiency. We are confident about future development,” Cao said, as reported by the China Daily.