China lists nearly 9,000 “little-giants” to become a bigger tech powerhouse than the U.S.

The Chinese government has selected 8,997 little-known industrial enterprises that will enjoy preferential treatment from central and provincial governments as the country prepares to supersede the technological prowess of the U.S., South China Morning Post reported. The government has dubbed them "little giants".

Who are little giants?

The term "little giants" is being used for less-known companies that have technological know-how in strategically important areas. These companies made an average profit of 40 million yuan (US$5.77 million) in 2021, which is thrice as much as small and medium scaled enterprises in China with revenues of 20 million yuan (US$2.89 million) make.

To be designated a "little giant", a company must operate in a strategically important sector such as semiconductors, manufacturing, energy, and minerals. On average, these companies also employ 28.7 percent of their employees in research and development operations.

Companies that are engaged in strategically important industries such as software and artificial intelligence can also be included in the list, alongside those who are capable of "fixing weaknesses" of the domestic supply chain, the SCMP cited information from the Ministry of Industry and Information Technology (MIIT)'s application form for the designation.

The recent list was unveiled at the national summit of little giants that was held last week in Nanjiang in the eastern Jiangsu province in China.

China's bid to supersede the U.S.

China's escalating tech war with the U.S. reached another low point when the U.S. banned chip exports to the Asian nation recently. However, China has been working to supersede the U.S. for a significant period of time now.

The recently announced little giants list is the fourth such listing since 2019. The country had set itself a target to have 10,000 such companies engaged in "specialized and sophisticated enterprises" and set aside 10 billion yuan (US$1.44 billion) to support 1,000 little giants between 2021 and 2025.

In a little over three years, the government seems to have achieved 90 percent of the target it had set for itself. The little giants have also set up more than 10,000 research institutes at the state and provincial levels. The country's leadership expects the companies to play an important role "in stabilizing supply chains and promoting economic and social development".

There is no standard incentive package that these companies receive after being listed as little giants. Instead, they receive lucrative incentives from central and provincial governments such as tax cuts, generous loans as well as favorable talent acquisition policies.

On its part, the government has vowed to accelerate "institutional support to encourage innovation, financing, and promotion", the SCMP report said.