Experts call for bigger policy, financial support for tech-savvy 'little giants'

More policy support is expected to broaden financing channels for small and medium-sized enterprises that specialize in niche industries with cutting-edge technologies and help them obtain technical and talent support from industry-leading companies, experts said.

The remarks came as the nation pushes to nurture more innovative tech SMEs with timely funding and business incubation platforms.

Such SMEs accounted for 59 percent of last year's IPOs in the A-share market, according to the Ministry of Industry and Information Technology.

Xu Xiaolan, vice-minister of the MIIT, said that specialized and sophisticated SMEs with novel and unique products accounted for 27 percent of all A-share-listed companies by the end of last year.

At present, there are more than 60,000 SMEs that have been identified as specialized and sophisticated enterprises that produce new and unique products. Among them, 8,997 were also categorized as "little giant" enterprises by the government, the MIIT said.

Little giant enterprises typically specialize in niche sectors, command high market shares and boast strong innovative capacity, and are considered highly specialized market leaders.

Li Feng, head of innovation and development at the China Center for International Economic Exchanges, said that developing such SMEs is essential for China to improve the stability and competitiveness of the industrial chain by providing new and unique products to "fill in the gaps".

Li said that currently, many tech SMEs still face challenges in key elements such as talent, technology and capital. To support the high-quality development of such SMEs, industry leaders should empower those companies by leveraging their own advantages like technology and talent.

Cooperation with industry leaders can help many companies achieve major technological breakthroughs and accelerate their transition from technology to business, said Huang Wei, deputy general manager of Luxshare Precision, a little giant company specializing in cable assembly and connector systems solutions.

"Generally, it is difficult for SMEs to obtain technology and experience from industry-leading enterprises, while industry leaders have concerns over products provided by SMEs. To obtain State-backed investment is also a challenge for SMEs," Li said.

Li Zibin, chairman of the China Association of Small and Medium Enterprises, also said that a majority of SMEs are now facing funding difficulties. "Improvement in China's financial system is needed to expand direct financing channels for SMEs specializing in niche industries with cutting-edge technologies. Further support should also be given in the areas of taxes and measures to recruit professionals."

Referring to such difficulties, Xu said the authorities will increase their efforts to create a favorable environment for the development of such SMEs, expedite their IPOs and encourage more social capital to invest in the early stage.

Xu said the goal is to cultivate more than 80,000 such SMEs and about 10,000 little giant firms by the end of this year.

Zhang Xiaoqiang, executive vice-chairman of the CCIEE, said that to promote the high-quality development of SMEs specializing in niche industries with cutting-edge technologies, it is necessary to leverage the leading role of industry leaders to share resources and provide services to those SMEs, empowering them with technology, resources and experience. At the same time, the government should play a role in promoting interactive development between industry leaders and such SMEs.

Wang Zhong, vice-president of Lenovo Group, said that going forward, the company will continue to focus on helping SMEs solve problems that hinder their high-quality development, and help them improve aspects of technical innovation and digital management to raise competitiveness on a global scale.