The General Office of the Ministry of Industry and Information Technology ("MIIT") has recently issued the Circular on Building the Second Batch of Specialized, Sophisticated, Distinctive and Innovative "Little Giant" Enterprises (the "Circular").
The Circular stipulates work objectives, building conditions, organization and implementation, as well as requirements. In particular, the Circular defines four basic conditions for building enterprises, namely "having continuous innovation capability, keeping constant innovation in respect of research, development and design, production and manufacturing, marketing, internal management, etc., having made noticeable benefits, and having certain demonstration and promotion value". Meanwhile, the Circular puts forward that leading products of specialized, sophisticated, distinctive and innovative "little giant" enterprises shall be in the main fields set out in the Catalogue for the Development of Industrial "Four Basics", and their segment products shall be core basic components and parts, advanced basic processes, key basic materials and so on in the manufacturing industry. The Circular also stipulates special conditions in four aspects including economic benefits. For example, the business revenue of an enterprise in the preceding year shall be more than CNY100 million, and in the recent two years, the average growth rate of its main business revenue or net profits shall reach over 10%, and asset-liability ratio shall not exceed 70%.