China nurtures unicorn firms with sci-tech innovation

BEIJING — With the steady improvement in China's overall strength in sci-tech innovation, a multitude of unicorn enterprises have been fostered in the country in recent years, providing continuous momentum for nurturing new quality productive forces.

China boasts 369 unicorn companies — startups valued at more than $1 billion — according to a report on China's unicorn enterprise development, which was released at the just-concluded 2024 Zhongguancun Forum (ZGC Forum) in Beijing.

The number of unicorn companies in China amounts to over a quarter of the total number of such companies globally. The country has added 67 new unicorn companies over the past year, the report said.

"It shows the vitality of China's economic development. But the number of unicorn firms in the country is far from reaching its potential," said Li Daokui, an economist at Tsinghua University, at the ZGC Forum.

"The three core competencies most critical to the development of Chinese unicorn enterprises are innovation, high-quality delivery and the ability to make continuous innovation," said Lai Lipeng, co-founder of XtalPi, a Chinese unicorn company specializing in artificial intelligence and robotics.

Carbios is a French unicorn company focused on the development and industrialization of biological technologies to reinvent the life cycle of plastics and textiles. At the forum, Emmanuel Ladent, the company's CEO, expressed his expectations of entering the Chinese market.

"Innovation and disruptive innovation like Carbios' are always welcome in a market like China. China is pushing a lot for clean and green technologies and biotech. It has a huge industry in plastics and textiles, so there is a huge opportunity for us to develop a partnership in China and make sure we will be successful," Ladent said.

In terms of localities, the 369 unicorn companies in China span 47 cities nationwide, and more than 60 percent of them are concentrated in Beijing, Shanghai, Guangdong province's Shenzhen and Guangzhou, and Hangzhou, Zhejiang province.

Beijing ranks first nationwide with 114 such firms, the report noted.

The nation's capital has cultivated more than 40 listed unicorn enterprises, such as Xiaomi, JD.com and Meituan, with a total market value of about 3 trillion yuan ($415.1 billion), according to Zhang Yulei, deputy director of the Beijing Municipal Science and Technology Commission.

In the fields of autonomous driving, new energy storage and robotics, companies such as Mech-Mind, a Chinese unicorn firm focusing on industrial 3D cameras and AI-powered software for intelligent robotics, have actively carried out R&D layout and business expansion around the world, Zhang said.

"I'm especially grateful for the fertile land of Beijing. If not for Beijing, Xiaomi could not have achieved such results and could not have been born," Lei Jun, founder and CEO of Xiaomi, said at the opening ceremony of the forum.

Beijing is actively building a long-term ecosystem to support the growth of unicorn companies. Last year, it maximized the release of policy dividends for unicorn enterprises in terms of innovation support, talent settlement, financial support and market cultivation.

Meanwhile, the capital city has set up four new government direct investment funds with a total scale of 50 billion yuan in the industries of AI, medicine and health, robotics and information, investing more in innovative enterprises, especially unicorn firms.

"Now, in terms of policies, obviously, China is pushing for more regulations, more circular economy, more integration of recycled plastics and recycled textiles. So I think we are in a very favorable environment," Ladent said.

Currently, China's 369 unicorn companies span 16 sectors, with the fields of AI and integrated circuits taking the lead.

Wu Shichun, founding partner of Plum Ventures, thinks that in the next three to five years, AI, new energy and new materials are expected to be the fields where the most unicorn firms will emerge.

Norose, executive deputy general manager of Daiwa Securities (China) Co Ltd, said that the areas where most Japanese companies want to invest and cooperate include environmental protection technology and new materials, high-performance materials, autonomous driving technology, the internet of things, robotics and new energy, among others.

"I think these are areas that have medium to long-term potential in the future and may be relatively easy to do business globally," Norose said.

Xinhua