China is widening its efforts to build homegrown "hidden champions" – small and medium-sized enterprises (SMEs) that dominate major markets in niche sectors. Since 2018, the country has announced three lists of innovative SMEs, totaling 4,900 companies, which it calls "little giants."

To make the list of little giants, an SME must command a high market share, have significant innovation capacity and control core technology, according to the Ministry of Industry and Information Technology (MIIT). The ministry expects to see around 10,000 such enterprises emerge in the next three to five years. 

These "little giants" are already on their way to achieving this target. Some of them have even gained opportunities during the COVID-19 pandemic. For example, the demand for Shanghai-based TMI Robotics robots was on the rise even before the pandemic. Since it mainly targets high-end medical service robots, its disinfection robots were already in use in many hospitals in the country since its establishment in 2015. 

Pan Jing, chief executive officer of the company, said it's mainly because medical service robots have a lot of applications, such as preventing cross-infection in the ICU. Though he admits it's still a niche industry, he has confidence in boosting the industry's development by producing more innovations.

Pan pointed out the government has also been offering assistance to advance small companies like his. Being recognized as a "little giant" is a big step up the ladder, as it will help companies with their financing. Investors will recognize their growth potential, and customers will have more confidence in their products since it's recognized by the government, not just a third-party institution. That will boost the development of the company, Pan said. 

MIIT data shows most of these companies are high-end equipment manufacturing, new materials and medicine. There are 262 little giants in Shanghai, and industry analysts say that gathering in cities like Shanghai will create further opportunities for the new firms. 

Patrick Liang, a partner of EY Assurance, explained that Shanghai's strong economic base is likely to attract professionals and investors, which meets companies' demand, as they have to "invest a lot in R&D."

As of the end of August, more than 300 little giant companies were listed on the A-share exchange, with a total market value of over 2.96 trillion yuan ($463 billion). They're also expected to get a lot of support from the new Beijing Stock Exchange, focusing on innovative companies, which was inaugurated last month. The hope is that the little giants will continue to grow up and play ever bigger roles in their industries.