Yearender: Chinese private firms speed up innovation drive to buck economic headwinds

BEIJING, Dec. 25 (Xinhua) -- A smart coal mining project in northwest China set a global record for autonomous driving this year, with the world's largest mixed fleet of 56 driverless and over 800 manned trucks operating safely since June.

These driverless trucks at the Heishan mine, 70 km south of Urumqi in Xinjiang Uygur Autonomous Region, can easily match the skill of experienced human drivers and are even capable of identifying obstacles as small as 10 cm from up to 40 meters away.

The technology behind these cutting-edge vehicles is provided by CiDi Inc., a unicorn company specializing in commercial vehicle autonomous driving. Founded in 2017, it has applied for over 530 technical patents and participated in the formulation of over 50 industry standards.

"Innovation is deeply embedded in our entrepreneurial philosophy," said Ma Wei, CiDi's co-founder, noting that the company's commitment to technological advancement is fundamental to its growth.

More than 75 percent of the company's 500-strong staff are engaged in research and development (R&D), and its R&D investment accounts for over 40 percent of the operating costs.

With a threefold revenue increase in the first half of this year, CiDi has arguably crossed the "valley of death" in the highly competitive and challenging field of autonomous driving, emerging as one of the industry's top players.

CiDi's success is not an isolated case in China. Amid a challenging economic environment this year, many private companies have intensified their focus on innovation, overcoming headwinds to strengthen their core competitiveness and secure new growth opportunities.

INNOVATION-DRIVEN GROWTH

Chinese companies are currently facing challenges both at home and abroad. The sluggish global economy, coupled with rising trade protectionism, has dampened prospects in international markets while domestically, insufficient demand and the ongoing economic shift toward new growth drivers have also caused challenges.

Liu Yuanchun, president of the Shanghai University of Finance and Economics, believes that the challenges posed by economic cycles and structural adjustments can also present growth opportunities and generate potential energy to drive economic development.

Industry analysis shows that although the steel industry faces short-term pressure, there is strong demand for high-value-added steel products, particularly in sectors like electric vehicles. Similarly, while the notebook computer market is nearing saturation, sales of specialized products like gaming laptops and ultra-thin models are picking up pace. Despite the drag of insufficient domestic demand, some industries, such as travel and entertainment e-commerce, still saw notable growth.

To capture the new growth points and opportunities, it is necessary to engage in innovation, meet the ever-changing market demands, and explore broader development space, according to experts.

Li-Gong Industrial Co., an intelligent manufacturing solution provider, achieved rapid development this year as it precisely identified emerging opportunities in a niche market.

Li Weichong, president of Li-Gong, saw a rapid increase in demand for small-batch, personalized intelligent equipment, as economic pressures have driven small and medium-sized enterprises (SMEs) to accelerate their intelligent transformation in a bid to stay competitive.

In response, Li and his team acted swiftly. "We visit the factory of each customer to assess their digital transformation needs, designing robotic systems and customized software packages tailored to their specific requirements," Li said, noting that Li-Gong's digital transformation projects in 2024 have doubled compared with last year.

For Cangzhou Four Stars Glass Co., which is striving to secure a strong position in the fiercely competitive market, its significant investment in assembly line upgrades finally paid off this year.

The company invested nearly 300 million yuan (about 41.74 million U.S. dollars) in the past two and a half years to upgrade its factory for digitalized production.

The investment brought financial pressure, but the transformation is aimed at long-term development, said Wang Huanyi, chairman of the glass producer, noting that the company reduced overall costs by 5 percent and saw a 20 percent increase in orders this year, a remarkable achievement amid intense market competition.

Despite ongoing economic hardships, the rise of more innovation-driven enterprises is injecting new vitality into the market and creating new momentum for the Chinese economy.

In the first three quarters of this year, 6.19 million new private enterprises were registered nationwide, with 40 percent of them engaged in new technologies, industries and business models. During the same period, the R&D investment of Chinese listed companies reached 1.1 trillion yuan, and in particular the R&D intensity of companies on the STAR market, China's Nasdaq-style sci-tech innovation board, stood at 9.94 percent.

STRONGER POLICY SUPPORT

Chinese authorities have ramped up efforts to support businesses this year, particularly private enterprises, through a series of policies aimed at easing their financial burdens, fostering innovation and creating a more favorable business environment.

Among the most notable measures, the People's Bank of China implemented a re-lending program to promote technological innovation and industrial upgrading. By the end of October, outstanding loans to technology-focused SMEs had reached 3.17 trillion yuan, marking a 21 percent increase from the previous year.

The Ministry of Finance introduced tax relief policies for innovation and the manufacturing sector, offering over 2 trillion yuan in tax cuts, refunds and fee reductions during the first three quarters.

For entrepreneurs like He Jianjun, who is developing nickel-based welding materials in Tianjin, policy support has been crucial.

Initially facing financing problems, He's company secured 2 million yuan in angel investment, followed by 10 million yuan loans from two banks. Recently, an SME financing guarantee center also provided a 15 million yuan guarantee for him. His company has since begun trial production, with promising market prospects ahead.

During the Central Economic Work Conference held early this month, Chinese policymakers emphasized the support for private enterprises when mapping out the economic work for 2025. Key measures include enacting a law to promote the private sector, launching a campaign to standardize law enforcement involving enterprises, and establishing guidelines for building a unified national market.

The Chinese government will strive to ensure fair competition, address issues like overdue payments, and create a stable and secure environment for business growth, according to experts.

The supportive policies have already begun to make a noticeable impact this year, driving growth in private investment and boosting business sentiment.

In the first 11 months of this year, private investment, excluding the real estate sector, rose by 6.2 percent from a year ago, and the exports and imports of private companies climbed by 8.7 percent. In November, industrial output from private enterprises increased by 4.5 percent.

According to Ma Huateng, chairman and CEO of tech giant Tencent, recent government policies have strengthened businesses' confidence in China's economic recovery.

"Private enterprises are poised for a bright future, and the Chinese economy is certain to overcome all challenges and continue to thrive," he said.