China to support ‘little giants’ and other emerging companies in plan to boost jobs, innovation

BEIJING: China made public a five-year plan for “little giants” and other emerging companies on Thursday, promising support for job creation and innovation as it seeks to drive economic growth and technological independence.

Jointly issued by 10 central government agencies, the plan urges local authorities to support small and medium-sized companies in emerging sectors. It will enable them to participate in major national science and technology programmes and use government funds to guide more capital into early-stage companies.

It reinforces Beijing’s broader push to accelerate digitalisation and AI adoption. “SMEs are an important force for driving innovation, promoting employment and improving livelihoods, and an important source of economic vitality and resilience,” the plan said.

Amid rivalry with the United States, China has sharpened its focus on technological self-sufficiency and supply-chain resilience and provided particular support for smaller specialised companies it calls little giants.

Small and medium-sized enterprises account for about 60percent of China’s economic output, 70percent of technological innovation, 80percent of urban employment and half of tax revenue, according to the OECD.

According to the plan made public on Thursday, China aims by 2030 to raise revenue per employee at SMEs by about 15percent, increase the number of little giants to 22,000, expand national SME industrial clusters to 600 and lift annual R&D spending by industrial SMEs by more than 8percent.

The plan pledged greater support for startups in strategic sectors including new energy, new materials, robotics, quantum technology, brain-computer interfaces and embodied AI, while expanding government-backed venture funding and “patient capital”, or long-term investment.

China will increase bank lending to SMEs and access to bond and equity markets, and launch a second phase of the national SME development fund to channel more capital to smaller firms, according to the plan.