Ventilator maker delivers innovation-driven growth

At an equipment production line in Wucheng county of Dezhou, Shandong province, workers are busy producing a batch of heat recovery ventilators specialized for livestock farming.

"Our independently developed ventilators can effectively prevent cold stress in livestock and poultry when there is a significant temperature difference between indoor and outdoor environments. More importantly, they also help save heating costs by 50 percent to 60 percent on average," said Sun Dongbin, chairman of Wucheng-based Xingheng Environmental Technology Group Co Ltd, adding that the company has to date received orders for more than 1,000 units of such ventilators, with sales revenue increasing by 30 million yuan ($4.2 million).

Heat recovery ventilators are designed to provide air movement in an airtight house, where the fresh air coming in replacing the extracted air is able to be close to the same temperature as the extracted air due to heat exchange elements.

As part of the company's efforts to keep pushing forward research and development, the specialized heat recovery ventilators have filled the domestic gap in the niche sector of livestock farming, Sun said. They have so far earned six national patents and been selected for a provincial demonstration project. This year, the company also made it into Shandong's list of gazelle companies, a list of young, fast-growing and innovation-driven tech firms in the province.

"For Chinese companies, especially private firms, lack of product originality and gradual loss of cost advantages were the biggest bottlenecks, which greatly hinders their development on the global stage," said Zhou Qiren, a professor at the National School of Development at Peking University, in a note.

"To gain an edge globally, Chinese companies should pour money into the originality and uniqueness of their business to bring extra profits and investment, invite the best minds in the world to make better products and innovation," Zhou said.

By consistently increasing investment in R&D and being more focused on specialized arenas, Xingheng is just one among such private tech firms in Wucheng, where innovation-driven growth has become a consensus among enterprises.

Wucheng's R&D investment stood at 641 million yuan in 2022, accounting for 3.14 percent of its total investments. There are 101 industrial enterprises above designated size engaged in R&D activities in the county, accounting for 61.96 percent.

In addition, over 100 enterprises in Wucheng have forged collaborative relationships with more than 50 renowned universities and research institutions, such as Tsinghua University and the University of Science and Technology Beijing.

As the growing momentum in R&D is expected to become a new engine for high-quality growth, the nation will further advance the development of elite small and medium-sized enterprises that specialize in niche markets, boast cutting-edge technologies and show great potential, said the tone-setting Central Economic Work Conference held earlier this month.

In China, such SMEs are mostly private enterprises. "Chinese economy will continue gathering momentum if the private sector, including smaller businesses, remains sound, given that many SMEs are being increasingly recognized for their role as leaders in new concepts and new business models," said Wang Peng, a senior researcher at the Beijing Academy of Social Sciences, adding that amid a global economic slowdown, supporting the private economy is of significant importance.

Song Xuetao, a researcher at TF Securities, said this year's economic conference intensified emphasis on policy implementation in terms of support for the private sector, as it said a number of measures to further support and strengthen private enterprises will be carried out by the country, including better market access, access to factors of production, fair law enforcement, and protection of rights and interests.

"The government wants to remove those barriers that hinder the development of private enterprises. The government also aims to enable private enterprises to participate in market competition at a higher level and in a larger field. It would activate the intrinsic ability of private enterprises to innovate and become more competitive on the global stage," said Song Xiangqing, a professor of government management at Beijing Normal University.

"Such an effort is important," said Wei Qijia, head of industrial economy research at the State Information Center. "It not only demonstrates the country's determination to support the development of the private sector, but also conveys a crucial signal to encourage, support and guide its development through tangible measures."

lijiaying@chinadaily.com.cn