SMEs help boost China’s economy
BEIJING: A legion of specialized small businesses in China and across the Association of Southeast Nations (ASEAN) have emerged with greater visibility for their increasingly important role in consolidating the industrial strength of the country.
These companies, dubbed “little giants”, represent the new elite of Chinese small and medium-sized enterprises (SMEs) engaged in manufacturing, specializing in a niche market and equipped with cutting-edge technologies.
“After the impact of the pandemic, these specialized and innovative small enterprises are becoming powerful propellants for the stable development of the Chinese economy,” said Liu Xiangdong, a researcher at the China Center for International Economic Exchanges.
For example, Kofon Motion Group, a “little giant” company based in central China’s Hubei Province, gained popularity for manufacturing a crayfish peeling machine, the first of its kind in the world and specially designed to meet the local appetite for crayfish.
The machine, which costs 3 million yuan ($473,000) each, can process around 1,000 crayfish per minute, generating a daily workload that requires 50 people.
He had brought the company more than 150 orders by the end of November last year, making his factory quite busy.
Another flagship product that has strengthened the company’s industrial presence is its proprietary planetary gear reducer, a key component in robotic machinery.
So far, the company has manufactured more than 85% of the country’s gear reducers used in push benches in the construction of underground pipeline corridors, and more than 80% of the gear reducers used in ETC guardrails at motorway tolls.
“Little giant” companies like Kofon are becoming an increasingly important component of innovation in China, according to official data.
According to the Ministry of Industry and Information Technology, in the first nine months of last year, the operating revenue and total profit of “small giant” enterprises increased by 31.6% respectively. and 67.9%. So far, the country has cultivated 4,762 “little giant” enterprises nationwide.
“If you look at the industry chain, you will find countless dynamic small players,” said Xu Xiaolan, vice minister of industry and information technology.
He added that China’s industrial chain has withstood the impact of the pandemic largely thanks to the depth and breadth of the industrial structure of small and medium-sized enterprises.
Gridsum Co. Ltd., another small innovative company headquartered in Beijing, has developed a new generation of software products such as artificial intelligence (AI) platforms and knowledge-based intelligence platforms. 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, vice president of the company.
Tian Xuan, vice president of the PBC School of Finance at Tsinghua University, highlighted the role of these new elites, expecting them to find more new business opportunities and innovate.
“Full of creativity and vitality, these specialized small enterprises will further enhance the stability and competitiveness of the country’s industrial and supply chains,” he said.
Among the first batch of 81 companies listed on the newly established Beijing Stock Exchange, 16 are “little giant” companies. The stock market is essential to create a multi-level capital market and improve financial support for these innovative SMEs.
During the 14th Five-Year Plan period (2021-2025), the country aims to incubate 10,000 “little giant” companies and more innovative SMEs.