"Little giant" firms mirror China's growing manufacturing strength
A legion of small but specialized enterprises in China has sprung up with greater visibility for their increasingly important role in cementing the country's industrial strength.
These enterprises, dubbed "little giants," represent the novel elites of China's small and medium-sized enterprises (SMEs) that are engaged in manufacturing, specialize in a niche market and boast cutting-edge technologies.
"After the impact of the pandemic, these small, specialized and innovative firms are becoming forceful propellers for the stable development of the Chinese economy," said Liu Xiangdong, a researcher with the China Center for International Economic Exchanges.
For instance, KOFON Motion Group, a "little giant" firm based in central China's Hubei Province, has gained popularity for making a crayfish peeling machine, the first of its kind around the world and specially designed to meet the local's appetite for crayfish.
The machine, costing 3 million yuan (about 473,000 U.S. dollars) each, can process about 1,000 crayfish per minute, generating a daily workload that takes 50 people to complete.
It had brought the company over 150 orders by late November last year, making its plant floor fairly busy.
Another flagship product that enhanced the company's industrial presence is its proprietary planetary gear reducer, a key component of robotic machines.
Up to now, the company manufactured over 85 percent of the country's gear reducers used in push benches in the construction of underground pipeline corridors, and more than 80 percent of the gear reducers used in ETC railings at high-way tollgates.
"Little giant" firms like KOFON are becoming an increasingly important component of innovation in China, official data showed.
According to the Ministry of Industry and Information Technology, in the first nine months of last year, the operating incomes and total profits of "little giant" firms increased 31.6 percent and 67.9 percent, respectively. So far, the country has cultivated 4,762 national-level "little giant" firms.
"If you look into the industrial chain, you'll find countless dynamic small players in it," said Xu Xiaolan, the vice-minister of industry and information technology. He added that China's industrial chain had withstood the impact of the pandemic largely due to the depth and breadth of the industrial layout of small and medium-sized enterprises.
Gridsum Co., Ltd., another small but innovative firm headquartered in Beijing, has developed a new generation of software products like AI platforms and knowledge intelligence platforms based on its underlying big data and AI technologies.
"We signed contracts worth 600 million yuan last year, and this year we are aiming for 1 billion yuan," said Peng Jun, the company's vice president.
Tian Xuan, vice-president of Tsinghua University PBC School of Finance, underscored the roles of these novel elites, expecting them to find more new business opportunities and break new ground.
"Full of creativity and vitality, these small but specialized enterprises will further boost the stability and competitiveness of the country's industrial and supply chains," he said.
Among the first batch of 81 firms listed on the newly-established Beijing Stock Exchange, 16 are "little giant" firms. The stock exchange is vital in creating a multi-level capital market and improving financial support for these innovative SMEs.
During the 14th Five-Year Plan period (2021-2025), the country aims to incubate 10,000 "little giant" firms and more innovative SMEs.