The Ministry of Industry and Information Technology, China's top industry regulator, said it aims to cultivate 3,000 "little giant "companies this year, which will help enhance the resilience of industrial chains and boost the innovation and vitality of the industrial 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.

 

According to a five-year plan, SMEs in China are set to witness steady improvement in their overall development quality, innovation capability, specialization level as well as operation and management levels by 2025.

 

By 2025, the country aims to develop 1 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 a level playing field.

 

More efforts will also be made to prevent and stop monopolistic behaviors 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, a senior expert at Zhongguancun Development Group, said the current crop of SMEs are facing difficulties and challenges created by multiple factors, including the COVID-19 pandemic, rising raw material prices and high cost of logistics.

 

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.

 

They focus on the new generations of information technology, high-end equipment manufacturing, new energy, new materials, biomedicine and other high-end fields.

 

Qu Xianming, a 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, China SME Development Fund Co Ltd, a fund with registered capital of 35.75 billion yuan ($5.64 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 percent stake amounting to 15.25 billion yuan.

 

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 financing 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.