China Is Betting Big on Its ‘Little Giants’

Sarah Mujeeb

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In 2018, China’s Ministry of Industry and Information Technology (MIIT) defined China’s “little giants” (小巨人) as companies with an annual revenue of 100-400 million yuan (roughly $14 million to $56 million), annual profit growth of at least 10 percent, R&D or innovation staff accounting for more than 15 percent of their total workforce, and at least five innovation patents related to products or 15 design patents.

China’s 14th Five-Year Plan (2021-2025) clearly stated the goal to “promote the increase of professional advantages by SMEs and cultivate specialized and new ‘little giant’ enterprises and single- product champion (单项冠军) enterprises in the manufacturing industry.” The target of 10,000 little giants set by the 14th Five-Year Plan has already been attained; as per media reports at the end July 2024, China’s push to promote small and medium enterprises (SMEs) for technology advancement and new product development resulted in the creation of 140,000 SMEs with 12,000 of those being little giants.

China’s little giants are found in all the industrial categories in the U.N. Industrial Classification and are forming a key part of supply chains. 90 percent of these little giants cater to the requirements of big firms, locally and globally.

The strategy of supporting little giants is in sync with China’s Made in China 2025 campaign. Policy implementation is evident, with little giants receiving incentives both from the central and provincial governments. The central government created an exclusive package of 10 billion yuan for 1,000 little giants during the 14th Five-Year Plan.

Beijing’s reactions to supply chain shifts away from China – dubbed “de-risking” by the United States and European Union – can be gauged from the highlights of its state media reports. There is a repetitive insistence that China’s manufacturing remains insulated from the global headwinds and small shifts in labor intensive sectors, with the caveat that the firms still need to import intermediate parts from China. Often, these intermediate parts are made not by China’s global champions, by the its little giants.