Six Chinese ministries jointly issued a guideline saying that by 2025, the nation aims to develop 10,000 “little giant” enterprises that specialize in niche sectors and 1,000 enterprises that are champions in a single industry, as well as groups of leading companies. Industry observers said that the guideline underscores China's strategic policy shift in the next five years to focus on breakthroughs in specific and critical sectors and supply chains where the country may be vulnerable amid a spiraling technology war between China and the U.S.
Preserving a large, complete domestic manufacturing sector could remain a key in the overall blueprint, but China will also widen its effort in building homegrown “hidden champions” small and medium-sized enterprises (SMEs) that dominate major markets in niche sectors to close the gaps with the U.S., Japan and Germany in advanced manufacturing. Among the six ministries were the Ministry of Industry and Information Technology (MIIT), the Ministry of Science and Technology (MST), the Ministry of Finance, and the Ministry of Commerce (MOFCOM). They proposed setting up a mechanism to guide specialized SMEs to grow into “small giant” companies in key sectors of the domestic market and champions in the international market. Large groups will also be guided to become globally competitive leaders. Other measures in the guideline include improving the capacity for independent innovation, facilitating the modernization of industry and supply chains, and improving financing and talent building policies.
“This is a lesson that we learned from the U.S.' crackdown against China's technology rise. In the 13th Five-year Plan (2016-20) period, we prioritized market scale and industry output, but the heated technology war between China and the U.S. exposed the risks of lacking 'hidden champions' in bottlenecked industries," Tian Yun, Vice Director of the Beijing Economic Operation Association, told the Global Times. Analysts said that the “hidden champions” – exemplified by the Netherlands-based lithography equipment maker ASML – are of strategic importance to the new round of global manufacturing competition.
