Shanghai introduced a set of 20 new measures on April 11 to facilitate the development of the small and medium-sized enterprises specializing in niche sectors, commanding high market share and boosting strong innovation capacity, as they are of much importance to advance new type of industrialization, the completion of modern industrial system, and the development of new quality productive forces.

According to the new measures, Shanghai aims to nurture about 20,000 such SMEs by the end of the 15th Five-Year Plan period (2026-30), doubling the current number.

To help achieve this goal, the municipal government will provide various incentives to companies seeking rapid and sustained growth.

For example, for qualified SMEs from the sectors of industrial, internet, software and information technology services, a one-time 500,000 yuan ($68,472) reward will be provided once they see their respective annual sales revenue exceed 20 million yuan for the first time. The "little giant" companies will be given a maximum of 500,000 yuan reward if they retain 20 percent annual sales revenue growth for two consecutive years.

By making full use of the city's funds for the three pioneering industries, industrial upgrading funds, future-oriented funds, among others, more social capital should be attracted to form a fund cluster valuing at least 100 billion yuan. Such capital will be used to step up direct investment in such technologically advanced SMEs.

Meanwhile, Shanghai will set up a base to nurture 1,000 such SMEs that are qualified for flotation in the stock market, according to the new measures.

The municipal government will refine its supervision and guidance over these SMEs, helping them to set up centers for manufacturing innovation, industrial innovation, engineering research and technology development.

Shanghai will also lower the costs for these SMEs in terms of the purchases of digital services, financing costs, and the expenses in electricity, gas and water, according to the new measures.

Data from the municipal government showed that more than 2,000 such SMEs in the city have extended their footprints in the international market, which is especially true among those specializing in intelligent service robots, new energy vehicle parts, new materials and basic software.

To encourage and better support these companies' outbound reaches among higher global market volatility, Shanghai has come up with special policies and a list of 100 professional service providers, according to Luo Zhisong, chief economist at the Shanghai Municipal Commission of Commerce. These are aimed at providing more international and professional services for the cross-border investment made by these SMEs, most of which are private enterprises, he said.

At present, Shanghai is home to over 12,000 technologically advanced and industry leading enterprises, among which 857 are recognized as the "little giant" companies by the Ministry of Industry and Information Technology.

The average annual sales revenue growth rate for the 12,000-plus companies came at 7.6 percent over the past two years, among which 5,000 saw their net profit growing by over 20 percent during the same period, according to Pu Yapeng, deputy director of Shanghai Municipal Commission of Economy and Informatization.

Possessing about 520,000 intellectual property rights, these SMEs have made much contribution to serving the city's and even China's major strategies. Presence of these companies can be found in the key areas such as large commercial jetliners, cruise ships, artificial intelligence large language models and graphics processing units, said Pu.

The industrial structure of these Shanghai-based SMEs has been optimizing amid the rapid development of large language models, embodied intelligence, 6G and quantum computing. The new measures are thus introduced to nurture more future-oriented SMEs with prospects of rapid growth and higher valuation, he added.