MK socks in Dazhou, Southwest China's Sichuan Province on February 19, 2025. Photo: VCG" src="https://www.globaltimes.cn/Portals/0/attachment/2025/2025-02-20/799e9996-f83b-495c-85eb-0f35b50ddcc5.jpg" />

Automated robotic arms operate on an assembly line at Sichuan Star Sodium Battery Co, in Dazhou, Southwest China's Sichuan Province on February 19, 2025. Photo: VCG

In recent years, the "little giants" in China - small and medium-sized enterprises (SMEs) that boast cutting-edge technologies and specialize in niche sectors - have shown strong growth momentum.

The rise of these small but specialized and innovative companies highlights the dynamism of the private enterprises amid China's deepening economic structural improvement toward high-quality growth.

Those strategic "little giant" enterprises have risen to 14,600 now, as reported by the Xinhua News Agency, surpassing the pre-set goal of nurturing 10,000 "little giants" by 2025, spurred by an ambitious plan to ramp up the vitality of the SMEs in China. More than 80 percent of the "little giant" enterprises are distributed in the strategic emerging industries such as integrated circuits, new energy, and aerospace, the Economic Information Daily reported.

Private enterprises contribute more than 80 percent of China's total "little giants," according to Xinhua. In the fields of artificial intelligence (AI), semiconductors, robotics and other technological fronts, the role of private enterprises is becoming increasingly important, while the government's growing policy support is strengthening the confidence of those companies.

In recent 10 years, China's economic structure has undergone significant optimization. The national economy is experiencing an important phase of transformation toward high-quality development, which provides ample opportunities for the "little giant" companies and other types of private enterprises.

Amid accelerating global tech revolution and industrial transformation, China's new quality productive forces are rapidly expanding, fueled by emerging technologies, industries, and business models that drive the growth of its "small giants."

In the face of the external challenges including technology curbs by certain countries, as well as a lackluster global economy, innovation capability and a well-established supply chain play an increasingly important role in the process of China's economic development and transformation.

The incessant development of the "little giant" enterprises helps improve China's industrial supply chains' resilience against those external challenges.

The rapid growth of China's "little giants" is primarily driven by three key factors: policy support, rising investment in technology research and development (R&D), and a vast Chinese domestic market that helps foster growth amid competition. These factors have contributed to the overall development of China's private enterprises exemplified by "little giants," which also presents a good opportunity for private enterprises to fully tap their potential and showcase their competitiveness.

First, strong policy support provides a solid guarantee for specialized and innovative "little giant" enterprises. Various Chinese government departments have introduced incremental policy measures, including tax incentives and financial support, to assist these enterprises in achieving high-quality growth. The initiatives taken by the government to support "little giants" will help them deal with more challenges, achieve more technological breakthroughs, and enhance their core competitiveness.

Second, investment in technology is the core driving force behind the rapid growth of "little giant" enterprises in China. These companies generally emphasize innovation, continuously increasing their R&D investments to shore up their technological capabilities and competitiveness.

Third, the vast Chinese market driven by free competition provides ample development space for the specialized and innovative "little giant" enterprises. With the transformation and upgrading of the Chinese economy, the demand for high-quality and specialized products and services is continuously increasing.

Specialized and innovative enterprises, leveraging their unique advantages in the niche markets, are better positioned to meet market demand and stand out in market competition.

Facing external pressures, a good number of Chinese private enterprises, particularly the "little giant" companies, have chosen to explore the route of innovative growth, which requires consistent government policy support so that the private enterprises could better navigate the external obstacles. While China's policy support is steadily increasing, more funding support will be a key for the "little giant" companies to pursue innovation and try to secure a significant market share at home and abroad.


The article was compiled based on an interview with Cao Heping, a professor at the School of Economics of Peking University. [email protected]