Private firm mecca Fujian punching above weight
The private economy has become a key driver of economic growth and technological innovation in East China’s Fujian province, as local private firms have contributed 70 percent of GDP and tech breakthroughs in the province, said a local government official at a recent news conference.
Industry experts said this reflects broader efforts from one of the earliest birthplaces of private enterprise activity in the country, and successful support of the innovative development of such firms with encouragement to play a larger role in economic recovery and future development.
Zhang Wenyang, deputy director of the Fujian Development and Reform Commission, said that private companies, which account for 94 percent of Fujian’s total enterprises, have also contributed to 70.6 percent of tax revenue and 80 percent of urban jobs.
“In particular, the technological innovation capability of local private companies has continued to improve, and investment into research and development has also been boosted,” Zhang said.
The proportion of R&D investment by major private enterprises has increased from 22.1 percent in 2017 to 56.6 percent in 2022. Private enterprises now account for over 90 percent of over 12,000 national high-tech enterprises, 7,200 technology-based small and mediumsized enterprises, and over 3,100 “little giant” companies in the province, he said.
Little giant firms are basically innovative SMEs that own proprietary core technologies in niche sectors and exhibit great market potential.
Zhou Qiren, a professor at Peking University’s National School of Development, said in a note that for many Chinese private companies to gain an advantage on the global stage, they should invite the best minds in the world to “make better products and innovate”.
Fujian, which is home to several well-known private firms like Contemporary Amperex Technology Ltd — the world’s largest battery maker — has launched a series of policies to support the innovative development of private companies over the past few years.
CATL, for instance, last year developed a groundbreaking battery that supports ultra-fast charging, and is reportedly the world’s first 4C super-fast charging lithium iron phosphate (LFP) battery. “C” basically refers to the charging multiplier of the battery, with 4C meaning the battery can theoretically be fully charged in 15 minutes.
The breakthrough battery, dubbed Shenxing, is able to deliver a driving range of 400 kilometers with a 10-minute charge.
Wu Kai, chief scientist at CATL, said that the future of EV battery technology must remain steadfastly anchored to global tech frontiers as well as produce economic benefits.
“As EV consumers shift from pioneering users to ordinary users, we should make advanced tech accessible for all and enable everyone to savor the fruits of innovation,” Wu said.
Fujian-based Anta Sports Products Ltd also highlighted technological innovation during its development, which has helped its sales revenue remain tops among Chinese sportswear brands for 11 straight years.
Ding Shizhong, Anta’s founder and chairman of the board of directors, said the company has leveraged technology to build additional smart factories and develop more new material and tech-driven sports products.
“Traditional industries are not necessarily low-end industries, and industrial upgrading should be achieved through technological innovation. Private companies are expected to play a leading role and take the initiative in the new round of tech revolution,” Ding said.
The Central Economic Work Conference in December said that China will implement a number of measures to strengthen private enterprises, including facilitating better market access, access to factors of production, fair law enforcement and protection of rights and interests.
Wang Peng, a researcher at the Beijing Academy of Social Sciences, said: “With better expectations, private companies, which have been drivers of the nation’s economic growth and innovative development, will make bold moves for business vitality. This, in turn, will drive economic recovery as well as the steady development of many sectors over the long term.”