NANJING, March 31 (Xinhua) -- China has been rapidly advancing its industrialization and the commercialization of sci-tech innovations in recent years, fostering a significant number of "hidden champions," which has injected fresh momentum into the upgrading of global industrial chains and contributed to sustainable development, said Hermann Simon, a renowned German economist.

Known as the father of the "hidden champions" theory, Simon defined the German "hidden champions" as enterprises engaging in niche markets, mastering core technology and securing the majority of the market share.

On March 26 and 27, he led a delegation of over 20 representatives from German enterprises and consulting institutions on a trip to Nanjing, capital of east China's Jiangsu Province, where they visited a bullet train manufacturing plant, a biomedical company and a medical technology company, seeking new opportunities for Sino-German collaboration.

Simon, in an exclusive interview with Xinhua, expressed his surprise at the remarkable changes in China's economy over the past decade. "I saw the strong emphasis the city puts on education, and the integration of scientific research and market innovation," he said.

Derived from the concept of "hidden champions," China's specialized and innovative small and medium-sized enterprises share a common trait -- a strong emphasis on innovation and a long-term mindset, Simon explained.

He added that China's development has undergone a remarkable transformation, shifting from an economy characterized by low cost, low price and low quality, to one driven by high-tech integration and the latest scientific advancements.

During his numerous visits to China over the past 20 years, Simon has marveled at the rapid growth of industries such as artificial intelligence and the digital economy. "It's impressive to see that China has made a leap from quantity-driven mode to quality-driven way in the past decade," he said.

Data from the Ministry of Industry and Information Technology shows that China's manufacturing industry had maintained the top global position in terms of overall scale for the 15th consecutive year in 2024, with the total value-added industrial output reaching 40.5 trillion yuan (about 5.65 trillion U.S. dollars). By the end of last June, China had cultivated over 140,000 innovative small and medium-sized enterprises.

In recent years, China has striven for breakthroughs in key and core technologies -- enhancing the innovation capabilities of its manufacturing sector. In 2024, China established five new national-level manufacturing innovation centers in emerging fields, such as new energy storage, micro-nano manufacturing, molecular drugs, humanoid robots and embodied intelligent robots.

According to Simon, China is an extremely important market for Germany. "But what's more and more important is China as a market of knowledge, and also of testing new concepts," he said, noting that Chinese consumers are always very willing to accept and test innovations, and that China is the first market where many international companies introduce innovations to see whether they are accepted by consumers.

Citing German electric giant Phoenix Contact as an example, Simon said: "The Phoenix Contact Nanjing company has become the headquarters in China, with more employees and higher revenue than its German headquarters."

He added that an increasing number of German enterprises choose to establish their largest factory and even research center in China, not only for local manufacturing, but also to meet global market demand.

Phoenix Contact's success in Nanjing is not an isolated case. China's ever-opening market and thriving innovative capabilities have increasingly become stabilizers of the global economy, amid growing uncertainties worldwide.

Notably, an overwhelming 92 percent of member companies of the German Chamber of Commerce in China planned to continue their operations in the country, underscoring the enduring importance of this market to German businesses, the chamber said in a survey report in December 2024.

According to Simon, China has successfully transitioned from being the "world factory" to embracing "intelligent manufacturing," shifting from a low-cost advantage to an innovation-driven edge, with this transformation underscoring China's commitment to high-quality development.

"That's exactly the survival way and development mode of 'hidden champions,'" Simon said, while noting that an innovative China will offer new opportunities to the world.