'Small giants' do heavy lifting

Innovative firms utilizing robots and lasers to chart a new path for Changchun

Unlike many companies that are concerned about finding enough customers, Gou Yang, general manager of Changchun Northern Chemical Filling Equipment Co, is worried about how to handle the company's burgeoning order backlog.

Orders in hand could keep the company's facilities running around the clock until mid-2015, he says.

The automated factory, which uses robots to load bottles of corrosive industrial chemicals, is said to be the most advanced of its kind in the nation. The production process, which the company has patented, guards against leaks that threaten workers' health and damage the environment.

It has also ended the monopoly that foreign companies held in the field.

Wu Chengshun, deputy general manager of Jilin Province King Laser Technology Co, is facing a similar situation. The company's products are used by most well-known domestic cosmetic plastic surgery hospitals and beauty salons. Its laser instruments are also exported to more than 30 countries.

The two companies are examples of the high-tech enterprises that Changchun, capital of Jilin province, has tried hard to cultivate and support.

"Besides good market prospects, what these companies have in common is advanced technology and strong innovative ability. They don't have many employees, but the research staff accounts for almost half of their total," says Zhao Shukuan, director of the School of Management at Jilin University in Changchun.

"And their annual output value and tax payments have surged every year," Zhao says.

Introducing their companies, both Gou and Wu started by saying "We are a small company".

But Gao Guangbin, Party chief of Changchun, calls them "small giants".

Zhao says that the city's "small giants" number 282 and their aggregate annual output is 20 billion yuan ($3.27 billion; 2.6 billion euros), almost the same as that of CNR Changchun Railway Vehicles Co Ltd, the second-largest enterprise in the city.

He says these booming "small giants" in the city will gradually help the city reduce reliance on large enterprises such as China FAW Group and CNR Changchun Railway Vehicles for its economic growth.

Gao says: "By cultivating and developing private high-tech innovative 'small giants', we hope to generate new development momentum. It is a development plan for the city's future."

Fu Cheng, director of the Sociology Institute at the Jilin Provincial Academy of Social Sciences, says the strategy is a good choice for Changchun, one of the nation's oldest industrial bases, to remake its economic structure.

China's northeast caught the central government's attention after reporting weak growth in the first half of this year.

According to the National Bureau of Statistics, Jilin and Liaoning provinces were two of the five provincial-level regions where first-half economic expansion was slower than in the first quarter, suggesting decelerating growth.

Among the 31 provinces, municipalities and autonomous regions on the mainland, Jilin ranked 28th. For the first half of this year, its GDP growth was 6.8 percent, 2.2 percent lower than in the same period of 2013 and the slowest pace in the past three years. It set a growth target of 8 percent at the beginning of this year.

Heavy reliance on the vehicle and railway industries has curtailed the city's ability to respond to market changes and held back its economic development. But booming private high-tech enterprises will help the city adjust its economic structure and make the city's economy more risk-resistant, Fu says.

Data from the Jilin Bureau of Statistics show the first-half production of the vehicle industry in Changchun was more than 300 billion yuan, which helped boost the city's industrial output growth to 9.4 percent.

The contribution to industrial growth by the transport industry was 93.3 percent, with FAW Group and CNR Changchun Railway, the two largest enterprises in the city, contributing the majority.

But "the small giants" have maintained double-digit growth in recent years and become a new engine of the city's economic growth.

"We have established a special fund to encourage corporate innovation," says Sun Guoqing, director of the Changchun Bureau of Science and Technology.

And under tax breaks introduced in 2013, business tax only kicks in when monthly sales reach 20,000 yuan.

"We have established a financing guarantee fund in cooperation with banks, enterprises and escrow companies to relieve these enterprises' fund shortages," Sun says.

"More preferential policies will be launched next year, including the establishment of innovation platforms to develop ties among enterprises, universities, colleges and institutes," he says.

"By helping these enterprises, we can also help improve employment. If every enterprise can hire 20 university graduates each year, then thousands of high-tech jobs will be created," says Sun.

Wu is more interested in government support in establishing close ties with universities. Jilin Province King Laser often has universities carry out research projects on its behalf. Meanwhile, the company provides internships and other aid for students that universities cannot offer.

"Many of our research staff come from universities and they are the company's most precious assets. They have helped us to keep coming out with innovative ideas," he adds.

Contact the writers through hena@chinadaily.com.cn

(China Daily European Weekly 12/12/2014 page16)