State-Led Cultivation of Niche Champions: An Evaluation of China’s Policy Mix for Specialized and Sophisticated SMEs (2011–2024)

State-Led Cultivation of Niche Champions: An Evaluation of China’s Policy Mix for Specialized and Sophisticated SMEs (2011–2024) | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article State-Led Cultivation of Niche Champions: An Evaluation of China’s Policy Mix for Specialized and Sophisticated SMEs (2011–2024) Yixiang Zhou, Jixun Liu This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8571005/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study examines how the Chinese government, as a strategic coordinator, designs and implements a policy mix to cultivate Specialized and Sophisticated Small and Medium Enterprises (S&S SMEs), often labelled “niche champions” because of their deep specialization in narrow market segments. Drawing on content analysis of 60 national‑level policy documents issued between 2011 and 2024, the article evaluates the structural characteristics, temporal evolution, and instrument–objective alignment of China’s S&S SME policy mix, with particular attention to resource coordination, market‑environment shaping, and demand stimulation. The analysis reveals a pronounced structural imbalance, with environmental and supply‑side instruments dominating and demand‑side instruments remaining marginal, limited cross‑instrument synergies, and weak support for process‑oriented objectives such as staged firm growth and industrial‑chain resilience. The article argues that this configuration constrains the transformation of technological breakthroughs into stable market positions and undermines the cultivation of S&S SMEs as robust niche champions. To enhance policy effectiveness, the study proposes rebalancing the policy mix, strengthening cross‑instrument coordination, and refining implementation mechanisms to improve instrument–objective alignment across firm life‑cycle stages and value‑chain nodes. The findings contribute to research on state‑led SME development and policy mixes in emerging economies, and offer practical insights for countries seeking to build their own layers of highly specialized, globally competitive SMEs analogous to the German Mittelstand and “hidden champions.” JEL Classification L26 • L53 • O25 • H11 Policy Mix Policy Evaluation Specialized and Sophisticated SMEs (S&S SMEs) Niche Champions State Orchestration Strategic Coordinator Figures Figure 1 Figure 2 Figure 3 Figure 4 Plain English Summary This study explores how the Chinese government uses a mix of policies to support a special group of small and medium‑sized enterprises called “Specialized and Sophisticated” SMEs. These firms are “niche champions” because they are highly specialized and innovative in specific market areas, similar to so‑called “hidden champions” in countries like Germany. By examining 60 national policy documents from 2011 to 2024, the study investigates whether the design and implementation of China’s policies match their targeted goals. The results show that current policies focus heavily on improving the overall business environment and providing resource support, but offer too little direct support for market demand, internationalization, and long‑term growth processes. Policy instruments are not sufficiently coordinated with one another or with the different stages of enterprise development and the links of industrial chains. The study recommends a better balance between different types of policy support, stronger coordination across policies, and clearer implementation rules, so that S&S SMEs can grow more steadily and strengthen their position in domestic and global value chains. 1 Introduction Since 2011, when China’s Ministry of Industry and Information Technology (MIIT) initially promoted the “Specialized, Sophisticated, Distinctive, and Innovative” (Zhuan Jing Te Xin) development strategy, the advancement of Specialized and Sophisticated small and medium-sized enterprises (S&S SMEs) has garnered increasing interest among policymakers, industry practitioners, and academic researchers. These S&S SMEs, regarded as exemplary within the SME sector, focus on niche markets, demonstrate robust innovation capabilities, and frequently occupy strategically significant roles within industrial and supply chains. By addressing technological gaps, reinforcing vulnerable segments of the value chain, and surmounting core technological challenges, these enterprises contribute substantially to national innovation capacity, industrial resilience, and the pursuit of high-quality economic growth. In response, the Chinese government has established a multi-tiered, gradient cultivation framework encompassing innovative SMEs and S&S SMEs at the local level, extending to nationally recognized “Little Giant” S&S SMEs and single-product champion firms. This framework integrates a diverse array of policy instruments—including fiscal subsidies, credit facilitation, public service provision, talent development initiatives, preferential government procurement, and export promotion—to cultivate a supportive environment conducive to the growth trajectory of S&S SMEs. Comparable firms internationally have been characterized as “hidden champions” or Mittelstand-type enterprises (Simon, 2009 ; Witt & Mueller, 2025): highly specialized, often family-owned SMEs that dominate narrow global market niches and provide stable, high-quality employment opportunities. Empirical evidence from these contexts indicates that a coherent policy and institutional ecosystem—comprising vocational training, innovation support, and export-promotion measures—is instrumental in sustaining such firms over time (Istipliler et al., 2023 ). Consequently, positioning China’s S&S SMEs as potential niche champions prompts a critical inquiry: does the current policy portfolio offer sufficiently coherent and balanced support to facilitate their phased development and integration within industrial value chains? The extant Chinese literature has begun to classify and assess the gradient cultivation policies targeting S&S SMEs. Zhang et al. ( 2022 ) demonstrate that supply-side and environmental policy instruments significantly advance SMEs’ transformation towards the “Specialized, Sophisticated, Distinctive, and Innovative” paradigm. Xie ( 2023 ) identifies salient challenges within existing S&S SME policies across supply, environmental, and demand dimensions. Additional studies document the positive yet heterogeneous impacts of specific instruments—such as preferential government procurement (Wu et al., 2024 ), fiscal subsidies (Wu et al., 2025 ), tax incentives (Yang et al., 2024 ), credit support (Cao & Xia, 2023 ), talent policies (Sun & Bai, 2024 ), and innovation grants (Cao et al., 2022 )—on the innovation performance and productivity of S&S SMEs. Concurrently, research on SME finance and policy evaluation underscores the critical importance of the design and interaction of credit guarantees (Zhong & Hu, 2024 ), regulatory frameworks (Zhong & Peng, 2022 ), and subsidies for SME survival and innovation, particularly within bank-centric financial systems (Yang et al., 2024 ). Nevertheless, most existing analyses focus on isolated policy instruments or program-specific evaluations, lacking a comprehensive and dynamic examination of how these instruments collectively align with multidimensional policy objectives and firm-level requirements throughout different stages of enterprise development. From the perspective of policy mixes, effective state intervention necessitates not only the selection of appropriate policy instruments but also their coherent combination and strategic temporal sequencing. Literature on policy mixes and ecosystem orchestration emphasizes that policy instruments achieve maximal efficacy when embedded within well-defined goal frameworks (Capano & Lippi, 2017 ), aligned with prevailing institutional contexts, and coordinated over time (OECD, 2023 ). For emerging economies aiming to develop layers of niche champion small and medium-sized enterprises (SMEs), this entails that state actors must orchestrate instruments spanning supply-side, environmental, and demand-side domains (Lv et al., 2019 ), as well as across different stages of the firm life cycle and industrial value chain (Kang & Yu, 2024 ). Existing research on China reveals a structural imbalance in science, technology, and innovation policies, characterized by an overemphasis on supply-side instruments alongside underdeveloped demand-side measures (Xu & Luo, 2020 ), coupled with challenges related to path dependency and excessive reliance on certain instruments (Yang & Zhou, 2022 ). Nonetheless, empirical evidence remains limited regarding the extent to which the national policy mix for small and specialized (S&S) SMEs aligns with objectives such as incremental firm growth (Ayyagari et al., 2011 ; Fan & Liu, 2020 ), innovation-driven upgrading, industrial chain strengthening, integrated development, and improvements in quality and efficiency. In this context, the present study conceptualizes China’s S&S SME policy mix as a state-orchestrated portfolio of instruments aimed at nurturing niche champions and introduces an instrument–objective alignment framework to assess its structural composition and temporal evolution. Specifically, the study addresses three research questions: (1) What are the structural characteristics and temporal evolution patterns of China’s national-level S&S SME policy mix from 2011 to 2024? (2) How are various categories of policy instruments—namely supply-side, environmental, and demand-side—aligned with distinct policy objectives such as graded firm growth and industrial chain resilience? (3) What structural imbalances and coordination deficiencies exist in the current instrument–objective alignment, and how might the policy mix be optimized to more effectively support S&S SMEs as niche champions? This article contributes to the literature on SME and entrepreneurship policy in three principal ways. First, it advances theoretical understanding of policy instruments and mixes by framing the national S&S SME program as a state-orchestrated policy portfolio and by developing an instrument–objective alignment framework specifically designed for the cultivation of niche champions. Second, it offers a longitudinal, text-based quantitative analysis of 60 national-level policy documents spanning 2011 to 2024, thereby complementing existing program-level SME policy evaluations with a systemic perspective on policy mixes and their evolution. Third, it provides policy recommendations for emerging and transitional economies seeking to cultivate their own layers of “hidden champions,” underscoring the necessity to rebalance policy mixes, enhance demand-side and process-oriented support (Yang et al., 2024 ), and improve implementation mechanisms to ensure effective ecosystem orchestration. The paper is organized as follows. Section 2 reviews relevant theories pertaining to the selection of policy instruments and introduces a two-dimensional framework that links different categories of instruments to specific policy objectives. Section 3 describes the research design, data sources, and coding procedures utilized in the study. Section 4 reports the empirical results regarding the distribution, temporal dynamics, and congruence between policy instruments and their targeted goals. Section 5 provides concluding observations, emphasizing the key findings and proposing potential strategies for enhancing China’s policy mix for small and medium-sized enterprises (SMEs) within the science and technology sector. Lastly, Section 6 addresses the study’s limitations and outlines recommendations for future research. 2 Construction of the Policy Text Analysis Framework 2.1 Overview of the theory of policy-instrument selection The theory of policy instrument selection, as a core topic in public policy research, has always been closely linked to government governance practices in its development context. The international academic community has constructed a systematic theoretical framework covering instrument attributes, configuration logic (Fotopoulos & Qian, 2025 ), and implementation mechanisms. Early research mainly focused on the functional attributes, type classification, and applicable conditions of policy instruments. Hood ( 1983 ) developed the "NATO model", arguing that the selection of instruments is essentially a process of matching government resource endowments with policy objectives, and emphasizing that the selection and allocation of policy instruments should be based on the actual endowments of government resources and the needs of policy objectives. This view laid the foundation for understanding the instrument - objective relationship. Rothwell and Zegveld ( 1985 ) were convinced that a single instrument is difficult to meet complex policy objectives, and a complementary mechanism between instruments is needed. The three-dimensional classification framework of supply-side, environmental, and demand-side instruments they constructed not only reveals the differentiated functions of different types of instruments in innovation policies but also puts forward the hypothesis of the synergy effect of instrument combinations. Howlett ( 1991 ) further deepened the theory of policy instrument selection. In the "goal - environment - resource" decision-making triangle model, the author pointed out that the selection of policy instruments needs to comprehensively consider three dimensions: goal characteristics, institutional environment, and resource constraints. This model provides important theoretical support for the optimal allocation of policy instruments. In recent years, with the continuous changes in the policy implementation environment and social needs, scholars have paid increasing attention to the dynamic alignment and combination evolution laws of policy instruments. The above studies have not only promoted the evolution of the theory of policy instrument selection from single instrument analysis to systematic alignment research but also provided important enlightenment for understanding the dynamic optimization of the gradient cultivation policies for S&S SMEs. The theory of policy-instrument selection is a core topic in public policy research and has evolved in close interaction with changes in government governance practices. Early work focused on the functional attributes, typologies, and applicability conditions of instruments. In recent years, research has shifted from isolated instruments to policy mixes and their dynamic properties. Capano and Howlett ( 2020 ) develop a framework for analysing the dynamic selection and adjustment of instruments within policy mixes and stress that instrument portfolios must be recalibrated as policy problems evolve. Flanagan et al. (2021) show that the temporal configuration of instrument mixes—when particular tools are introduced, scaled, or withdrawn—has a decisive impact on innovation-policy outcomes. Parallel work in SME and innovation policy evaluation indicates that the composition and design of financial, regulatory, and demand-side instruments condition SME survival and innovation performance, underscoring the need to study instruments as interconnected systems rather than isolated levers. Chinese scholarship has localized these theoretical insights in the Chinese context. Studies document that instrument selection often reflects the dual logic of goal orientation and path dependence (Tang, 2009 ), with persistent preferences for certain instrument types. Empirical analyses of science and technology policy reveal structural imbalances characterized by overloaded supply-side instruments and relatively absent demand-side instruments (Xu & Luo, 2020 ), as well as mismatches between instrument clusters and multi-level policy goals (Fu et al., 2023 ). Recent work also shows that dynamic optimization of policy instruments, including pruning redundant tools and adjusting combinations, can significantly improve policy effectiveness (Xu et al., 2025 ). Within the S&S SME domain, research highlights industry heterogeneity in instrument effectiveness (Zhang et al., 2023 ) and suggests that there is an optimal threshold for instrument combinations beyond which marginal benefits decline or distortions emerge (Wang & Liu, 2017 ). Beyond instrument typologies, emerging research conceptualizes governments as ecosystem orchestrators who align goals, resources, and coordination mechanisms among diverse actors (Lechner et al., 2023 ). In entrepreneurial and industrial ecosystems, state and lead firms use hierarchical and relational governance to coordinate innovation networks (Uhlaner et al., 2007 ), shared infrastructures, and market access. From this perspective, China’s gradient cultivation policies for S&S SMEs can be interpreted as a state-orchestrated attempt to configure a policy mix that shapes an innovation ecosystem for niche champions (Li et al., 2019 ; Huang et al., 2025 ). The effectiveness of such orchestration depends not only on the presence of particular instruments but also on the coherence, timing, and instrument–objective alignment of the overall portfolio (Chen & Wu, 2025 ). Synthesizing international and domestic research, the theory of policy-instrument selection has thus evolved from single-instrument analysis to a multi-dimensional system encompassing instrument attributes, combination logics, temporal dynamics, and ecosystem orchestration. These advances provide a solid theoretical foundation for analysing and optimizing the policy mix for S&S SME gradient cultivation. Building on this literature, the present study adopts the threefold classification of supply-side, environmental, and demand-side instruments and explicitly links these instrument types to differentiated policy objectives across the S&S SME life-cycle and industrial chain. 2.2 Construction of the policy text analysis framework Focusing on the structural alignment relationship between policy instruments and policy objectives, this study constructs a two-dimensional analysis framework based on instrument types (X - dimension) and objective orientations (Y - dimension) to systematically reveal the gradient distribution characteristics, goal coordination status, and potential optimization paths of the instrument mix in the current cultivation policies for S&S SMEs. Focusing on the structural alignment between policy instruments and policy objectives, this study constructs a two-dimensional analysis framework based on instrument types (X-dimension) and objective orientations (Y-dimension). The framework is designed to reveal the gradient distribution, goal coordination, and potential optimization paths of the current S&S SME policy mix as a state-orchestrated system. 2.2.1 Policy-instrument dimension (X-dimension) A clear and operational classification of policy instruments is a prerequisite for reliable text analysis. Ambiguous or overlapping definitions can lead to inconsistent coding and misinterpretation of policy content. Drawing on Rothwell and Zegveld’s threefold classification and on existing empirical work on Chinese SME and innovation policies, this study categorizes instruments into supply-side, environmental, and demand-side types and further decomposes each type into subcategories that capture their core functions. Supply-side instruments focus on the direct provision of innovation and growth factors and include five subcategories: fiscal support, financial support, science and technology (S&T) innovation support, talent recruitment and cultivation, and information support. Their core function is to fill critical resource gaps and enhance the internal capabilities of S&S SMEs. Environmental instruments aim to optimize the institutional and business environment and cover tax incentives, public services, goal-setting and strategic planning, intellectual property protection, and regulatory compliance. These instruments reduce transaction costs, strengthen legal and property-rights protection, and provide strategic guidance, thereby creating more predictable conditions for firm development. Demand-side instruments seek to stimulate market demand and include priority government procurement, channel development, service outsourcing, and overseas expansion. They use market signals and demand scenarios to guide firms’ innovation directions and promote the commercialization and scaling of S&S SMEs’ products and services. Table 1 Types, Names, and Definitions of Graded Cultivation Policy Instruments Instrument Type Instrument Name Instrument Description Instrument Subdivision Supply-side Fiscal support Various financial inputs provided by the government to enterprises Fiscal subsidies, special funds, national development funds Financial support Various financing supports provided by the government to enterprises Preferential loans, financing credit enhancement, guarantees, foreign exchange channels Technology and innovation support Support provided by the government for the development of science and technology Support for industry - university - research cooperation, establishment of technological innovation platforms Talent recruitment and cultivation Policies implemented by the government regarding the education system and talent cultivation Talent recruitment, skills training Information support Support provided by the government to promote information exchange Construction of information exchange platforms, establishment of information networks Environmental Tax incentives Various tax reduction and exemption measures implemented by the government for enterprises Reduction of indirect taxes, reduction of tax amounts, deduction of R&D expenses Public services Various service - oriented measures provided by the government to facilitate enterprise development Infrastructure construction, listing guidance, brand promotion Goal-setting and strategic planning Overall layout and guidance made by the government to promote enterprise development Industrial development planning, encouragement of inter - enterprise cooperation Intellectual property protection Government's strengthening of intellectual property protection Cracking down on infringement, patent protection, simplification of patent applications Regulatory compliance Various laws, regulations, systems, and measures for regulating market order Anti - infringement supervision, acceleration of patent examination Demand-side Priority government procurement Government's preferential procurement of products and services from S&S SMEs Public service procurement, demonstration project construction Channel development Various measures taken by the government to promote import and export trade Cross - border matching, export trade promotion Service outsourcing Government agencies entrust R&D plans to enterprises or research institutions R&D outsourcing, university cooperation projects Overseas expansion Government's establishment or assistance in the establishment of overseas branches by enterprises Establishment of overseas institutions, expansion of international markets This classification not only reflects the main policy levers recurrently used in China’s S&S SME policy texts—such as financing support, priority government procurement, and public services—but also facilitates quantitative content analysis by providing clear, mutually exclusive categories that can be consistently identified and coded. 2.2.2 Policy-objective dimension (Y-dimension) Although China’s S&S SME gradient cultivation policies broadly point to high-quality development and innovation-driven growth, their explicit expression of objectives is often fragmented and lacks clear hierarchical structure. To reconstruct the underlying goal system, this study applies three-stage grounded-theory coding to policy texts and identifies five core policy objectives with strong internal logical connections: graded growth (Chen et al., 2024 ), innovation-driven development, industrial chains enhancement and gap filling, integrated development, and quality and efficiency improvement. Graded growth captures the staged progression of S&S SMEs from start-up and innovative SME status to S&S SME, “Little Giant,” and single-product champion, emphasizing the continuity and support needs across the firm life-cycle. Innovation-driven development focuses on breaking through key core technologies, promoting R&D and commercialization, and building independent innovation capabilities. Industrial chains enhancement and gap filling stresses the reinforcement of weak links, enhancement of supply-chain stability, and improvement of domestic substitution capacity and bargaining power within global value chains. Integrated development highlights coordinated collaboration among large, medium, and small firms, and the integration of industry, university, research, and application, aiming to create an open, interactive innovation ecosystem. Quality and efficiency improvement targets profitability, total factor productivity, and resource allocation efficiency, aligning with the macro-level agenda of high-quality economic development. Collectively, these objectives constitute a coherent cyclical framework, progressing from "graded growth" (form) through "innovation-driven development" (core), alongside "industrial chain enhancement and gap filling" and "integrated development" (path), ultimately culminating in the attainment of "quality and efficiency improvement" (result). This framework aligns with international discourse on niche-champion and Mittelstand enterprises, which emphasize phased capability development, integration within value-chain networks, and the maintenance of sustained efficiency and innovation. Within this context, various policy instruments can be evaluated based on their effectiveness in supporting specific objectives and the overall balance achieved in aligning instruments with these objectives. 2.2.3 Two-dimensional instrument-objective analysis framework Integrating the dimensions of policy instruments and policy objectives produces a two-dimensional analytical framework, termed the “policy instrument–policy objective” framework (see Fig. 2 ), which facilitates a systematic assessment of China’s policy mix for small and medium-sized enterprises (SMEs) in the science and technology sector. Within this framework, supply-side and demand-side instruments are posited to exert more direct influences on enterprise growth by respectively driving and attracting development. In contrast, environmental instruments are understood to indirectly affect enterprise growth by shaping the institutional context and market regulations. Furthermore, the framework underscores that different categories of instruments may follow distinct mechanisms of action; for instance, supply-side instruments may function through a sequence of “resource gap filling, capability enhancement, and ecosystem integration,” whereas demand-side instruments may operate via “demand identification, value realization, and network expansion.” Crucially, the framework underscores that instruments rarely act in isolation. Instead, they form policy mixes whose effectiveness depends on temporal coordination, intensity matching, and functional complementarity across instrument types and goal dimensions. The quality of instrument–objective alignment—both within and across the supply-side, environmental, and demand-side subsystems—thus becomes a central criterion for evaluating the performance of the S&S SME policy mix as a state-orchestrated system. The subsequent empirical analysis uses this two-dimensional framework to code policy texts, quantify instrument–objective matches, and diagnose structural imbalances and coordination gaps in China’s gradient cultivation policies for S&S SMEs. 3 Research Design 3.1 Data collection Table 2 List of Policy Documents for Gradient Cultivation of S&S SMEs No. Policy Name Issuing Unit Time 1 "12th Five - Year" Plan for the Growth of Small and Medium - sized Enterprises MIIT 2011 2 Opinions of the State Council on Further Supporting the Healthy Development of Small and Micro - sized Enterprises State Council 2012 3 Guiding Opinions on Promoting the "Specialized, Sophisticated, Distinctive, and Innovative" Development of Small and Medium - sized Enterprises MIIT 2013 4 Guiding Opinions on Further Promoting the Development of Industrial Clusters MIIT 2015 5 Implementation Plan for the Special Action for the Cultivation and Improvement of Single - product Champion Enterprises in the Manufacturing Industry MIIT 2016 … … … … 59 Special Action Plan for the Digital Empowerment of Small and Medium - sized Enterprises (2025–2027) MIIT and other four ministries 2024 60 Evaluation Index System for the "Specialized, Sophisticated, Distinctive, and Innovative" Development of Small and Medium - sized Enterprises MIIT 2024 Note: MIIT - Ministry of Industry and Information Technology. To ensure the systematicness and scientificity of policy analysis, data collection strictly follows the following criteria: (1) Authority of sources. Core official information sources such as the National Government Service Platform, Pkulaw Legal Database, and MIIT's High - quality SME Gradient Cultivation Platform are selected to ensure the legal validity and version accuracy of policy texts. (2) Uniformity of levels. It is limited to central - level policy documents (issued by the State Council, MIIT, etc.), and regional policies of local governments are excluded to ensure the homogeneity of research objects. (3) Timeliness and comprehensiveness. All valid documents from the policy germination period in 2011 to the latest policy release in 2024 are obtained to dynamically present the policy evolution context and phased characteristics. In the text screening process, three criteria are implemented: (1) Thematic relevance. The policy text must clearly involve the gradient cultivation of S&S SMEs. (2) Text standardization. It is limited to document types with administrative effectiveness, such as laws and regulations, opinions, measures, plans, notices, and planning outlines, excluding interpretive materials and inter - departmental forwarding letters. (3) Substantiveness of content. It is required to include specific cultivation measures or implementation plans, and principle - based expression documents are excluded. After systematic screening, 60 valid policy texts are finally obtained (see Table 2 ), with a time span from September 2011 to December 2024, fully covering the development process of China's gradient cultivation policies for S&S SMEs. 3.2 Research methods The study combines qualitative content analysis with quantitative text analysis to evaluate the structural characteristics, instrument–objective alignment, and dynamic evolution of the S&S SME policy mix. First, building on Rothwell and Zegveld ( 1985 )’s classification and the grounded-theory-based objective system introduced in Section 2 , a two-dimensional “instrument–objective” analysis matrix is constructed. This matrix specifies how each identified policy clause can be positioned along both an instrument dimension (supply-side, environmental, demand-side and sub-types) and an objective dimension (graded growth, innovation-driven, industrial chains enhancement and gap filling, integrated development, quality and efficiency improvement). Second, NVivo 12 is used to preprocess the policy texts and identify candidate clauses containing instrument and goal elements. A combination of keyword dictionaries (e.g. “special fund,” “tax deduction,” “public service platform,” “priority government procurement”) and semantic pattern recognition is employed to extract content units. Each clause is then manually reviewed and coded by the research team, following the classification rules elaborated in Table 1 and the objective labels derived from grounded theory. In the quantitative stage, frequency statistics, cross‑tabulations, and time‑series plots are used to derive: (1) overall distributions of instrument types and sub‑types; (2) joint distributions of instruments and objectives; and (3) temporal evolution patterns by instrument type and sub‑type. Finally, drawing on the policy-mix and instrument-choice literature, the results are interpreted through the lens of instrument–objective alignment and ecosystem orchestration, with a particular focus on structural balance, subsystem coordination, and life-cycle and value-chain coverage. This allows the empirical findings to speak directly to international debates on SME policy mixes and state-led niche-champion strategies. 3.3 Coding of content units The coding procedure follows a multi-step, rigorously documented process. First, policy texts are decomposed into content units using policy articles and paragraphs as the basic analytical units. A four-level coding scheme (“document–chapter–article–paragraph”) is adopted, and for complex clauses that contain multiple distinct policy actions, a fifth level is added to capture each instrument element separately (e.g. “1–2–3–4–1”). This ensures that compound clauses are decomposed into analytically meaningful units. Second, instrument types are identified and classified according to the operational definitions in Table 1 , applying a “main effect plus supplementary effects” principle for compound clauses. For example, a clause that simultaneously introduces R&D tax deductions and special funds is coded both as an environmental instrument (tax incentives) and a supply-side instrument (fiscal support), preserving their multi-instrument character. Third, each clause is mapped onto one or more policy objectives in the five-dimensional goal system (G1–G5), based on explicit goal statements and inferred intent. For instance, a clause stating that “fiscal subsidies support technological research by ‘Little Giant’ enterprises” is coded as a supply-side fiscal support instrument linked to the innovation-driven objective. Table 3 Example of Coding Units for Policy Text Content Analysis No. Policy Text Content Analysis Unit Instrument Type Instrument Name Coding 1 "12th Five - Year" Plan for the Growth of Small and Medium - sized Enterprises Adhere to the "Specialized, Sophisticated, Distinctive, and Innovative" approach. Regard the "Specialized, Sophisticated, Distinctive, and Innovative" development direction as an important way for SMEs to transform and upgrade and change their development mode... (G1) Environmental Goal-setting and strategic planning 1–2–1–5 2 Guiding Opinions on Promoting the "Specialized, Sophisticated, Distinctive, and Innovative" Development of Small and Medium - sized Enterprises Give play to the guiding and supporting role of various special funds and funds for supporting the development of SMEs..., implement the pre - tax additional deduction of enterprise R&D expenses..., and expand the financing channels for supporting the technological innovation of SMEs... (G2) Supply - side Fiscal Support 3–3–1–1–1 Financial Support 3–3–1–1–2 Environmental Tax Reduction and Exemption 3–3–1–1–3 To improve efficiency and accuracy, Python regular expressions and keyword matching are used for preliminary automated identification, followed by manual verification and correction by trained coders. This hybrid “machine-assisted plus manual verification” approach reduces omission and misclassification risks while ensuring conceptual consistency. 3.4 Reliability and validity Several measures are taken to ensure the reliability and validity of the coding. Two senior experts with long-term research experience on S&S SMEs are involved in the design of the coding framework and periodically review coding decisions, providing substantive and methodological guidance. The coding team—comprising the project leader and three postgraduate students—is divided into two groups that independently code a common subset of texts after joint training and calibration sessions. Inter-coder reliability is assessed using the Kappa coefficient (Fleiss & Cohen, 1973 ). The resulting Kappa of 0.846 (p < 0.001) exceeds the commonly accepted threshold of 0.75, indicating high consistency in instrument and goal coding. Content validity is assessed through an expert scoring exercise in which the two experts rate the appropriateness of the instrument classification and instrument–objective matching on a 0–10 scale; the average score of 9.301 suggests that the constructed framework has strong explanatory power and fits well with the observed policy texts. Together, these procedures provide a robust foundation for the subsequent quantitative analysis and interpretation. 4 Empirical analysis 4.1 Distribution of policy instruments The analysis of 563 coded policy clauses shows a strongly unbalanced configuration of the S&S SME policy mix. Environmental instruments account for 53.11% of all instrument mentions, followed by supply-side instruments at 41.74%, while demand-side instruments represent only 5.15%. This “environment-led, supply-assisted, demand-weak” pattern indicates that the policy system strongly emphasizes institutional optimization and factor provision, but offers limited direct support for market creation, demand stimulation, and commercial scaling. Within the environmental subsystem, public services (20.43%) and goal-setting and strategic planning (18.47%) dominate, whereas intellectual property protection (4.44%) and tax incentives (2.66%) are under-represented. This points to a preference for indirect support via infrastructure, guidance, and generic services over strong legal and fiscal incentives for innovation, which may weaken long-term innovation incentives and knowledge appropriation. In the supply-side subsystem, financial support (14.39%), information support (7.99%), and technology and innovation support (7.99%) are most prominent, while fiscal support (6.39%) and talent recruitment and cultivation (4.97%) remain relatively modest. Given the documented importance of skills and human capital for innovation and the development of hidden-champion-type firms, this pattern suggests an “emphasizing financing and neglecting cultivation” tendency. Demand-side instruments are sparse and skewed towards domestic-market instruments such as channel development (2.31%) and priority government procurement (1.42%), with overseas expansion (1.07%) and service outsourcing (0.36%) almost absent. In the context of increasing international competition and trade frictions, this narrow demand-side toolkit limits support for S&S SMEs’ internationalization, participation in global value chains, and use of public procurement and outsourcing as innovation-demand signals. Overall, the current instrument distribution falls short of the closed-loop support required for S&S SMEs to progress from technological breakthroughs to stable domestic and global niche positions. Table 4 Distribution of Policy Instrument Systems for Gradient Cultivation of S&S SMEs Instrument Type Instrument Name Coding of Policy Clauses Quantity Proportion Total Supply - side Fiscal Support 2–2–3, 2–2–4, 2–4–16 − 1, 2–4–17 − 1, 2–4–25 − 2, 2–7–26 − 2, 3–3–1–1, 6 − 4–1, 8 − 5–2 − 1, 9 − 5–2, 12 − 4–4,... 36 6.39% 41.74% Financial Support 2–3–7, 2–3–8, 2–3–9 − 1, 2–3–10, 2–3–11, 2–4–17 − 2, 3–3–1–2, 8 − 5–2–3–1, 9 − 5–4 − 1, 11 − 4–2 − 1, 12 − 3–1, 12 − 3–2,... 81 14.39% Technology and innovation support 2–3–12, 2–3–13 − 1, 2–4–15 − 1, 3 − 2–6 − 2, 3–3–2–2, 6 − 3–3 − 1, 7 − 2–2 − 1, 9 − 3–4 − 1, 10 − 5–1, 11 − 4–2–2, 12 − 1–1, 12 − 5–1–2,... 45 7.99% Talent recruitment and cultivation 2–4–15 − 2, 2–4–24, 2–4–25 − 1, 3 − 2–5 − 2, 5–6–14, 9 − 5–5, 12 − 6–3, 24 − 9–2, 26 − 10–29, 26 − 10–30,... 28 4.97% Information Support 2–3–13 − 2, 2–4–18 − 2, 2–8–29, 3 − 2–3 − 2, 6 − 4–2 − 1, 6 − 3–2, 6 − 3–4 − 1, 8 − 5–2–3–2, 8 − 5–4 − 1, 8 − 5–5, 12 − 5–4, 12 − 6–2, 15 − 4–13, 17 − 5–24,... 45 7.99% Environmental Tax Incentives 2–2–2, 2–2–6 − 1, 3–3–1–3, 8 − 5–2–2, 9 − 5–3, 9 − 5–4 − 2, 12 − 4–2, 15 − 2–5 − 2, 15 − 2–6 − 2, 17 − 3–15, 18 − 2–7,... 15 2.66% 53.11% Public Services 2–2–6 − 2, 2–4–16 − 2, 2–4–19, 2–4–20, 2–4–21, 2–4–22, 2–4–23, 2–7–26 − 3, 2–7–27 − 1, 2–8–28, 3 − 2–4 − 2, 3 − 2–5 − 3,... 115 20.43% Goal-setting and strategic planning 1–2–1–5, 1–3–3 − 1, 1–3–3–3, 1–3–3–4, 1–3–3–5, 1–3–3–6, 2–4–15 − 3, 2–7–26 − 1, 2–7–27 − 2, 3 − 2–1, 3 − 2–2 − 1, 3 − 2–3 − 1,... 104 18.47% Intellectual Property Protection 2–3–14, 3 − 2–2–2, 9 − 5–1–2, 11 − 4–2–4, 12 − 5–2, 26 − 6–16, 26 − 6–17, 26 − 6–18 − 1, 27 − 5–16, 28 − 2–4 − 3,... 25 4.44% Regulatory Compliance 6 − 3–4 − 2, 8 − 5–4 − 3, 9 − 5–1–3, 12 − 1–3, 12 − 2–1, 12 − 2–2–2, 12 − 2–3, 12 − 3–5, 13 − 4–11 − 2, 15 − 5–18, 17 − 3–13,... 40 7.10% Demand - side Priority government procurement 2–2–5, 9 − 5–1–4, 12 − 4–3, 15 − 2–7 − 2, 18 − 2–8, 26 − 7–20, 29 − 8–2, 44 − 1–5 8 1.42% 5.15% Channel development 2–3–9 − 2, 2–4–18 − 1, 12 − 6–4, 24 − 8, 26 − 7–19 − 1, 26 − 7–22, 26 − 7–23, 27 − 8–24, 27 − 8–25, 29 − 8–3, 41 − 1–2, 44 − 5–30 − 2,... 13 2.31% Service Outsourcing 44 − 5–30 − 1, 55 − 5–4 − 2 2 0.36% Overseas expansion 20 − 2–1–4, 26 − 6–18 − 1, 26 − 7–19 − 2, 29 − 8–4, 55 − 5–4 − 3 6 1.07% Total 563 100% 100% 4.2 Instrument-objective alignment The two-dimensional matching analysis reveals further imbalances at the level of policy objectives. Across all instrument types, policy support is concentrated on quality and efficiency improvement (258 instrument–objective matches, 42.09%) and innovation-driven development (143 matches, 23.33%). Support for graded growth (59 matches, 9.62%) and industrial chains enhancement and gap filling (52 matches, 8.48%) is much weaker, while integrated development occupies a middle position (101 matches, 16.48%). This indicates a bias towards result-oriented objectives and internal firm performance, with insufficient emphasis on life-cycle support and value-chain resilience. Supply‑side instruments predominantly target innovation‑driven (29.43%) and quality and efficiency improvement (35.09%) objectives, driven by technology and innovation support, talent measures, and financial and fiscal support. By contrast, only 10.57% and 9.81% of supply‑side instrument matches relate to graded growth and industrial‑chain strengthening, suggesting that the design of supply‑side support has not yet fully internalized the staged growth logic and chain‑position demands of S&S SMEs. Environmental instruments show a similar pattern: nearly half of their matches support quality and efficiency improvement (48.11%), with more modest attention to innovation‑driven (19.18%) and integrated development (17.30%), and limited coverage of graded growth (8.18%) and industrial‑chain objectives (7.23%). The institutional environment therefore still underperforms in facilitating stage‑to‑stage progression and chain‑node coordination. Demand-side instruments are few in number but distributed across several objectives, with relative emphasis on quality and efficiency improvement (40.00%) and integrated development (20.00%). Nevertheless, their support for innovation-driven and industrial-chain strengthening goals is extremely limited, and their potential to trigger learning, upgrading, and network expansion through public procurement, outsourcing, and internationalization remains largely untapped. Taken together, the current instrument–objective matching structure can be summarized as “quality and efficiency-led, innovation-supported, growth-path and chain-construction supplemented,” which poses risks for long-term resilience and gradient upgrading. Table 5 Alignment of "Policy Instruments vs. Policy Objectives" Policy Instruments Instrument Name Policy Objectives Total Graded growth Innovation - driven Industrial chains enhancement and gap filling Integrated Development Quality and Efficiency Improvement Supply - side Fiscal Support 10 7 6 3 18 265 Financial Support 10 12 5 15 42 Technology and innovation support 3 31 10 8 4 Talent recruitment and cultivation 3 16 1 1 9 Information Support 2 12 4 13 20 Subtotal/Proportion (28, 10.57%) (78, 29.43%) (26, 9.81%) (40, 15.09%) (93, 35.09%) Environmental Tax Incentives 0 3 1 0 11 318 Public Services 6 13 6 24 69 Goal-setting and strategic planning 17 30 11 26 32 Intellectual Property Protection 2 12 4 2 8 Regulatory Compliance 1 3 1 3 33 Subtotal/Proportion (26, 8.18%) (61, 19.18%) (23, 7.23%) (55, 17.30%) (153, 48.11%) Demand - side Priority government procurement 1 0 0 1 6 30 Channel development 4 3 1 4 2 Service Outsourcing 0 1 1 0 0 Overseas expansion 0 0 1 1 4 Subtotal/Proportion (5, 16.67%) (4, 13.33%) (3, 10.00%) (6, 20.00%) (12, 40.00%) Tota 59 143 52 101 258 613 Proportion 9.62% 23.33% 8.48% 16.48% 42.09% 100% 4.3 Evolution of the policy mix The temporal analysis (see Fig. 3 ) shows that the S&S SME policy mix has evolved in distinct phases. In terms of quantity, the number of instrument mentions grows steadily from 2011, surges from 2019 onwards, and peaks around 2021–2022, when both environmental (66 instances) and supply-side instruments (55 instances) reach historical highs. This intensive policy phase coincides with heightened external shocks, including the COVID-19 pandemic and intensifying geo-economic tensions, and reflects an explicit policy effort to support S&S SMEs and strengthen supply-chain security. After 2022, the overall number of instrument mentions declines, suggesting a shift from rapid expansion of policy coverage to consolidation, implementation, and refinement. Structurally, environmental instruments maintain a dominant position throughout most of the period, consistent with China’s broader emphasis on business-environment reforms and institutional upgrading. Supply-side instruments, however, display a marked expansion after 2019 and temporarily surpass environmental instruments in 2021, indicating a stronger strategic focus on factor provision, R&D platforms, and financing during the intensive support phase. Demand-side instruments remain marginal over the entire period, and their sub-types show little diversification: basic forms of priority government procurement and channel development are used, while more sophisticated tools such as service outsourcing and overseas expansion remain rare. At the sub-instrument level (see Fig. 4 ), public services, goal-setting and strategic planning, and financial support show the most pronounced increases in recent years. For example, public-service instruments expand rapidly after 2020 and peak in 2021, reflecting intensified efforts to build platforms, infrastructure, and service systems for S&S SMEs. Financial support instruments also expand steadily, in line with international evidence on the importance of credit support and guarantees for SME resilience in crisis periods. In contrast, critical incentive instruments such as intellectual property protection, tax incentives, and talent recruitment and cultivation grow more slowly and remain relatively under-represented overall, signaling persistent gaps in the long-term innovation-incentive and human-capital pillars of the ecosystem. In sum, while the S&S SME policy mix has become richer and more active over time—particularly in environmental and supply-side domains—it still suffers from structural imbalances, weak demand-side development, and insufficient embedding of life-cycle and chain-resilience considerations in instrument design and adjustment. 5 Conclusions and policy implications 5.1 Main findings Drawing upon a longitudinal content and quantitative analysis of 60 national-level policy documents spanning from 2011 to 2024, this study delineates four principal structural deficiencies within China’s policy framework for science and technology small and medium-sized enterprises (S&T SMEs). Firstly, the policy mix reveals an “imbalanced promotion–pull” configuration. Specifically, environmental and supply-side policy instruments collectively constitute over 94% of all referenced instruments, whereas demand-side instruments remain marginal. This arrangement emphasizes institutional development and factor provision but provides insufficient leverage at the market and value-chain levels. Consequently, it impedes the effective translation of technological innovations into sustained sales and niche market positions, thereby undermining the establishment of a comprehensive cycle from “innovation” to “commercialization.” Secondly, internal coordination among instrument subsystems is notably weak, and functional gaps persist. Within supply-side instruments, there is a pronounced bias toward financial support and information services, with comparatively limited focus on talent cultivation and the enhancement of deep innovation capabilities. Environmental instruments predominantly address public services and planning, rather than robust rights-based or fiscal incentives. Demand-side instruments are largely confined to basic channel development and procurement mechanisms, with more sophisticated approaches such as outsourcing and internationalization support conspicuously absent. These tendencies exacerbate fragmentation and hinder synergistic interactions across different policy instruments. Thirdly, the policy-objective system exhibits discontinuities in phase linkage and insufficient process-oriented support. The alignment between instruments and objectives is primarily concentrated on improving quality, efficiency, and innovation-driven development, while aspects such as graded growth and industrial chain strengthening receive comparatively scant attention. As a result, support for critical life-cycle transitions—including start-up, scaling, and upgrading phases—and for enhancing resilience at key chain nodes, such as bottleneck links and core components, remains incomplete. This gap is particularly significant given the importance of these factors in fostering robust niche champions and hidden-champion enterprises. Fourthly, the operational effectiveness of numerous policy provisions is constrained, and implementation capacity requires enhancement. Many clauses are characterized by abstract language, lack quantitative targets and procedural specificity, and omit clear criteria for application, evaluation methodologies, and coordination mechanisms. Such deficiencies increase uncertainty and compliance costs for enterprises and intermediaries, thereby elevating the risk of policy inertia or inconsistent enforcement across governmental departments. 5.2 Optimization Paths In view of these findings, four interconnected pathways for optimization are proposed to improve the efficacy of China’s Science and Technology (S&T) Small and Medium-sized Enterprise (SME) policy framework and to reinforce its function as a state-coordinated system for nurturing niche market leaders. (1) Rebalancing and Coordinating the Policy Mix The current predominance of environmental and supply-side policy instruments should be supplemented by a more proactive and diversified set of demand-side tools. For instance, policymakers might establish dedicated funds to support the internationalization of S&T SMEs, integrating overseas research and development (R&D) and service-node assistance with export-linked, tiered subsidies to promote sustained engagement in global value chains. Government procurement priorities could be enhanced by developing a prioritized catalogue of innovative S&T SME products, setting minimum procurement quotas, and linking procurement performance to the evaluation of purchasing agencies. In the domain of service outsourcing, institutionalizing mechanisms such as “unveiling the list and taking command” could convert national strategic demands into competitive R&D and solution contracts for S&T SMEs. These initiatives would facilitate a transition from a predominantly supply-driven approach toward a more balanced, market-responsive policy mix. (2) Strengthening Subsystem Complementarities Within each policy instrument subsystem, internal complementarities should be reinforced to address existing functional deficiencies. On the supply side, greater emphasis could be placed on talent acquisition and development as well as on cultivating advanced innovation capabilities, for example through collaborative training programs involving universities, research institutes, and S&T SMEs, alongside targeted skill enhancement initiatives aligned with niche champion development trajectories. On the environmental side, enhancing comprehensive intellectual property services and enforcement, coupled with refining R&D-focused tax incentives, would establish more robust and sustainable innovation incentives. On the demand side, implementing risk-compensation schemes for technology outsourcing and insurance subsidy programs to support overseas market exploration would enable S&T SMEs to leverage external contracts and global opportunities as catalysts for upgrading. (3) Embedding Dynamic, Objective-Oriented Alignment To rectify misalignments between policy instruments and their intended objectives, it is essential to institute a dynamic, goal-oriented evaluation and adjustment mechanism. This entails developing metrics and indicators capable of tracking how various combinations of instruments contribute to graded growth, value chain strengthening, innovation, integration, and efficiency goals, with periodic recalibration of instrument priorities based on empirical outcomes. Practically, policymakers could design modular “instrument packages” tailored to each core objective—such as an innovation-driven package that integrates science and technology support, talent initiatives, and tax incentives—and enable firms at different developmental stages to apply for customized packages through a unified platform. Regular feedback loops and performance assessments would then inform the ongoing refinement of both the packages and their underlying objectives. (4) Strengthening Implementation Regulations and Governance Capacity Finally, it is imperative to enhance the clarity and enforceability of policy provisions while simultaneously bolstering implementation capacity. Supplementary documentation should delineate specific application criteria, funding limits, evaluation metrics, and review schedules for critical instruments such as fiscal subsidies and tax incentives. Additionally, the deployment of digital platforms to centralize application processes and monitoring can alleviate administrative burdens faced by small and medium-sized enterprises (SMEs) in the sustainability sector. The establishment of independent, third-party evaluations assessing policy execution—including fund utilization, beneficiary satisfaction, and achievement of objectives—and the integration of these findings into future resource allocation decisions would facilitate a comprehensive policy feedback loop from formulation to refinement. Collectively, these measures would enable the Chinese government to function more effectively as an orchestrator of the innovation ecosystem, harmonizing policy instruments, goals, and stakeholder behaviors to promote the sustainable development of niche champions. 6 Discussion and limitations This research conceptualizes China’s Specialized and Sophisticated SME (S&S SME) program as a state-directed policy mix aimed at fostering niche champions, and assesses the alignment between policy instruments and objectives from 2011 to 2024. The results indicate that although the policy mix has become more diverse and proactive, it remains structurally imbalanced. Specifically, environmental and supply-side instruments predominate, while demand-side instruments are underdeveloped. Additionally, process-oriented goals, such as phased growth and industrial-chain resilience, receive comparatively limited support. Situated within the broader literature on SMEs and innovation policy, these findings corroborate that policy instrument portfolios in emerging economies tend to gravitate towards factor provision and institutional signaling, yet face challenges in establishing robust demand-side and value-chain mechanisms essential for firms resembling hidden champions. This study contributes to scholarly debates on policy mixes, ecosystem orchestration, and SME development in three key ways. First, it advances theories of instrument choice and policy mixes by explicitly linking policy instruments to an empirically derived, multidimensional objective framework for S&S SMEs, demonstrating how misalignments at various levels influence the overall efficacy of the policy mix. Second, it conceptualizes the Chinese state as an ecosystem orchestrator, illustrating that orchestration is constrained not only by resource availability and authority but also by the coherence, timing, and complementarities of instruments across supply-side, environmental, and demand-side subsystems. Third, it underscores that nurturing niche-champion SMEs necessitates sustained, life-cycle-sensitive support that integrates capability development with market access and value-chain positioning, aligning with international evidence on the institutional foundations of Mittelstand and hidden champions. Despite these contributions, the study acknowledges several limitations that suggest avenues for future research. First, the analysis is based on national-level Chinese policy documents and does not capture variations in local implementation or region-specific policy innovations, which can be significant within China’s multi-tiered governance structure. Future research could incorporate provincial and municipal policies and combine textual analysis with administrative or survey data to examine how instrument–objective alignment varies across regions and sectors. Second, the study focuses on the design and evolution of the policy mix without directly measuring firm-level outcomes such as innovation performance, export upgrading, or survival, which would enable causal inference regarding policy impacts. Integrating the instrument–objective framework with firm-level microdata and leveraging staggered policy introductions or quasi-experimental designs would be a fruitful direction for subsequent studies. Third, the analysis primarily treats the state as the central orchestrator and does not fully explore the roles of intermediaries, large enterprises, financial institutions, and universities in participating in or contesting orchestration within the ecosystem. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8571005","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":623451242,"identity":"d3245ca1-7b56-4c76-882b-b6a15aecae9f","order_by":0,"name":"Yixiang Zhou","email":"","orcid":"","institution":"Zhejiang Shuren University","correspondingAuthor":false,"prefix":"","firstName":"Yixiang","middleName":"","lastName":"Zhou","suffix":""},{"id":623451244,"identity":"e808c0ce-adf2-4a8f-95fb-7e63e82dfb29","order_by":1,"name":"Jixun Liu","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA6UlEQVRIiWNgGAWjYBACxmYwZcHDwN7AYAARSyBKiwQPA88BIrVAgQQQwVUS0MLczmMmXcAgIWNw8/mDwp97DjPws+cYMPzcgc9hbGnSM4AOM7idkGDM8+wwg2TPGwPG3jP4tDAfk+aBaDlgzHDgMIPBjRwDZsY2fFoY2yBabh5sMPwB1GJPWAvMlhvMDAY8IFskCGphS7bmMZDgkTyTxmDMcyCdR+LMs4KDvXi0GPafMbzNU2Fjz3f8+DOgw6zl+NuTNz74iU9LA4iExCEbiOIBsQ7g1sDAII/EZn6AT+UoGAWjYBSMXAAAcrRErNES2fYAAAAASUVORK5CYII=","orcid":"","institution":"Zhejiang Shuren University","correspondingAuthor":true,"prefix":"","firstName":"Jixun","middleName":"","lastName":"Liu","suffix":""}],"badges":[],"createdAt":"2026-01-11 02:23:11","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-8571005/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8571005/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":107489534,"identity":"f0764621-46db-43ff-bf0e-5b97e09e53a6","added_by":"auto","created_at":"2026-04-22 02:48:02","extension":"png","order_by":1,"title":"Figure 1","display":"","copyAsset":false,"role":"figure","size":117370,"visible":true,"origin":"","legend":"\u003cp\u003ePolicy objectives for the graded cultivation of S\u0026amp;S SMEs\u003c/p\u003e","description":"","filename":"1.png","url":"https://assets-eu.researchsquare.com/files/rs-8571005/v1/b6f36e0a5ab986183856c9c8.png"},{"id":107489902,"identity":"28c0139c-269f-4731-844f-4591f0690fb0","added_by":"auto","created_at":"2026-04-22 02:49:16","extension":"png","order_by":2,"title":"Figure 2","display":"","copyAsset":false,"role":"figure","size":52669,"visible":true,"origin":"","legend":"\u003cp\u003eTwo-dimensional analytical framework on graded cultivation of S\u0026amp;S SMEs\u003c/p\u003e","description":"","filename":"2.png","url":"https://assets-eu.researchsquare.com/files/rs-8571005/v1/4b0894c919e88cb41135506a.png"},{"id":107467201,"identity":"3131c518-cdc8-4940-9bbc-1b6ac666eae9","added_by":"auto","created_at":"2026-04-21 18:47:05","extension":"png","order_by":3,"title":"Figure 3","display":"","copyAsset":false,"role":"figure","size":64903,"visible":true,"origin":"","legend":"\u003cp\u003eTemporal Evolution of the Policy Mix for S\u0026amp;S SMEs\u003c/p\u003e","description":"","filename":"3.png","url":"https://assets-eu.researchsquare.com/files/rs-8571005/v1/b1f443c1373a41251f21229f.png"},{"id":107467204,"identity":"63746e5a-24c6-4f3c-822b-4bc326718b27","added_by":"auto","created_at":"2026-04-21 18:47:05","extension":"png","order_by":4,"title":"Figure 4","display":"","copyAsset":false,"role":"figure","size":129539,"visible":true,"origin":"","legend":"\u003cp\u003eEvolution of the Policy Tool Matrix for Specialized and Sophisticated SMEs\u003c/p\u003e","description":"","filename":"4.png","url":"https://assets-eu.researchsquare.com/files/rs-8571005/v1/5f69b69a675bc48c387622f0.png"},{"id":108006227,"identity":"3f038ebd-a5ff-4ed8-9458-062800fd2f7e","added_by":"auto","created_at":"2026-04-28 12:54:46","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":731462,"visible":true,"origin":"","legend":"","description":"","filename":"manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8571005/v1/fd000b89-6bbe-489f-a20c-f2809e86c785.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"State-Led Cultivation of Niche Champions: An Evaluation of China’s Policy Mix for Specialized and Sophisticated SMEs (2011–2024)","fulltext":[{"header":"Plain English Summary ","content":"\u003cp\u003eThis study explores how the Chinese government uses a mix of policies to support a special group of small and medium‑sized enterprises called \u0026ldquo;Specialized and Sophisticated\u0026rdquo; SMEs. These firms are \u0026ldquo;niche champions\u0026rdquo; because they are highly specialized and innovative in specific market areas, similar to so‑called \u0026ldquo;hidden champions\u0026rdquo; in countries like Germany. By examining 60 national policy documents from 2011 to 2024, the study investigates whether the design and implementation of China\u0026rsquo;s policies match their targeted goals. The results show that current policies focus heavily on improving the overall business environment and providing resource support, but offer too little direct support for market demand, internationalization, and long‑term growth processes. Policy instruments are not sufficiently coordinated with one another or with the different stages of enterprise development and the links of industrial chains. The study recommends a better balance between different types of policy support, stronger coordination across policies, and clearer implementation rules, so that S\u0026amp;S SMEs can grow more steadily and strengthen their position in domestic and global value chains.\u003c/p\u003e"},{"header":"1 Introduction","content":"\u003cp\u003eSince 2011, when China\u0026rsquo;s Ministry of Industry and Information Technology (MIIT) initially promoted the \u0026ldquo;Specialized, Sophisticated, Distinctive, and Innovative\u0026rdquo; (Zhuan Jing Te Xin) development strategy, the advancement of Specialized and Sophisticated small and medium-sized enterprises (S\u0026amp;S SMEs) has garnered increasing interest among policymakers, industry practitioners, and academic researchers. These S\u0026amp;S SMEs, regarded as exemplary within the SME sector, focus on niche markets, demonstrate robust innovation capabilities, and frequently occupy strategically significant roles within industrial and supply chains. By addressing technological gaps, reinforcing vulnerable segments of the value chain, and surmounting core technological challenges, these enterprises contribute substantially to national innovation capacity, industrial resilience, and the pursuit of high-quality economic growth.\u003c/p\u003e \u003cp\u003eIn response, the Chinese government has established a multi-tiered, gradient cultivation framework encompassing innovative SMEs and S\u0026amp;S SMEs at the local level, extending to nationally recognized \u0026ldquo;Little Giant\u0026rdquo; S\u0026amp;S SMEs and single-product champion firms. This framework integrates a diverse array of policy instruments\u0026mdash;including fiscal subsidies, credit facilitation, public service provision, talent development initiatives, preferential government procurement, and export promotion\u0026mdash;to cultivate a supportive environment conducive to the growth trajectory of S\u0026amp;S SMEs. Comparable firms internationally have been characterized as \u0026ldquo;hidden champions\u0026rdquo; or Mittelstand-type enterprises (Simon, \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2009\u003c/span\u003e; Witt \u0026amp; Mueller, 2025): highly specialized, often family-owned SMEs that dominate narrow global market niches and provide stable, high-quality employment opportunities. Empirical evidence from these contexts indicates that a coherent policy and institutional ecosystem\u0026mdash;comprising vocational training, innovation support, and export-promotion measures\u0026mdash;is instrumental in sustaining such firms over time (Istipliler et al., \u003cspan citationid=\"CR16\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Consequently, positioning China\u0026rsquo;s S\u0026amp;S SMEs as potential niche champions prompts a critical inquiry: does the current policy portfolio offer sufficiently coherent and balanced support to facilitate their phased development and integration within industrial value chains?\u003c/p\u003e \u003cp\u003eThe extant Chinese literature has begun to classify and assess the gradient cultivation policies targeting S\u0026amp;S SMEs. Zhang et al. (\u003cspan citationid=\"CR37\" class=\"CitationRef\"\u003e2022\u003c/span\u003e) demonstrate that supply-side and environmental policy instruments significantly advance SMEs\u0026rsquo; transformation towards the \u0026ldquo;Specialized, Sophisticated, Distinctive, and Innovative\u0026rdquo; paradigm. Xie (\u003cspan citationid=\"CR31\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) identifies salient challenges within existing S\u0026amp;S SME policies across supply, environmental, and demand dimensions. Additional studies document the positive yet heterogeneous impacts of specific instruments\u0026mdash;such as preferential government procurement (Wu et al., \u003cspan citationid=\"CR30\" class=\"CitationRef\"\u003e2024\u003c/span\u003e), fiscal subsidies (Wu et al., \u003cspan citationid=\"CR29\" class=\"CitationRef\"\u003e2025\u003c/span\u003e), tax incentives (Yang et al., \u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2024\u003c/span\u003e), credit support (Cao \u0026amp; Xia, \u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e2023\u003c/span\u003e), talent policies (Sun \u0026amp; Bai, \u003cspan citationid=\"CR24\" class=\"CitationRef\"\u003e2024\u003c/span\u003e), and innovation grants (Cao et al., \u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e2022\u003c/span\u003e)\u0026mdash;on the innovation performance and productivity of S\u0026amp;S SMEs. Concurrently, research on SME finance and policy evaluation underscores the critical importance of the design and interaction of credit guarantees (Zhong \u0026amp; Hu, \u003cspan citationid=\"CR39\" class=\"CitationRef\"\u003e2024\u003c/span\u003e), regulatory frameworks (Zhong \u0026amp; Peng, \u003cspan citationid=\"CR40\" class=\"CitationRef\"\u003e2022\u003c/span\u003e), and subsidies for SME survival and innovation, particularly within bank-centric financial systems (Yang et al., \u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2024\u003c/span\u003e). Nevertheless, most existing analyses focus on isolated policy instruments or program-specific evaluations, lacking a comprehensive and dynamic examination of how these instruments collectively align with multidimensional policy objectives and firm-level requirements throughout different stages of enterprise development.\u003c/p\u003e \u003cp\u003eFrom the perspective of policy mixes, effective state intervention necessitates not only the selection of appropriate policy instruments but also their coherent combination and strategic temporal sequencing. Literature on policy mixes and ecosystem orchestration emphasizes that policy instruments achieve maximal efficacy when embedded within well-defined goal frameworks (Capano \u0026amp; Lippi, \u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2017\u003c/span\u003e), aligned with prevailing institutional contexts, and coordinated over time (OECD, \u003cspan citationid=\"CR21\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). For emerging economies aiming to develop layers of niche champion small and medium-sized enterprises (SMEs), this entails that state actors must orchestrate instruments spanning supply-side, environmental, and demand-side domains (Lv et al., \u003cspan citationid=\"CR20\" class=\"CitationRef\"\u003e2019\u003c/span\u003e), as well as across different stages of the firm life cycle and industrial value chain (Kang \u0026amp; Yu, \u003cspan citationid=\"CR17\" class=\"CitationRef\"\u003e2024\u003c/span\u003e). Existing research on China reveals a structural imbalance in science, technology, and innovation policies, characterized by an overemphasis on supply-side instruments alongside underdeveloped demand-side measures (Xu \u0026amp; Luo, \u003cspan citationid=\"CR32\" class=\"CitationRef\"\u003e2020\u003c/span\u003e), coupled with challenges related to path dependency and excessive reliance on certain instruments (Yang \u0026amp; Zhou, \u003cspan citationid=\"CR34\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Nonetheless, empirical evidence remains limited regarding the extent to which the national policy mix for small and specialized (S\u0026amp;S) SMEs aligns with objectives such as incremental firm growth (Ayyagari et al., \u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e2011\u003c/span\u003e; Fan \u0026amp; Liu, \u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e2020\u003c/span\u003e), innovation-driven upgrading, industrial chain strengthening, integrated development, and improvements in quality and efficiency.\u003c/p\u003e \u003cp\u003eIn this context, the present study conceptualizes China\u0026rsquo;s S\u0026amp;S SME policy mix as a state-orchestrated portfolio of instruments aimed at nurturing niche champions and introduces an instrument\u0026ndash;objective alignment framework to assess its structural composition and temporal evolution. Specifically, the study addresses three research questions: (1) What are the structural characteristics and temporal evolution patterns of China\u0026rsquo;s national-level S\u0026amp;S SME policy mix from 2011 to 2024? (2) How are various categories of policy instruments\u0026mdash;namely supply-side, environmental, and demand-side\u0026mdash;aligned with distinct policy objectives such as graded firm growth and industrial chain resilience? (3) What structural imbalances and coordination deficiencies exist in the current instrument\u0026ndash;objective alignment, and how might the policy mix be optimized to more effectively support S\u0026amp;S SMEs as niche champions?\u003c/p\u003e \u003cp\u003eThis article contributes to the literature on SME and entrepreneurship policy in three principal ways. First, it advances theoretical understanding of policy instruments and mixes by framing the national S\u0026amp;S SME program as a state-orchestrated policy portfolio and by developing an instrument\u0026ndash;objective alignment framework specifically designed for the cultivation of niche champions. Second, it offers a longitudinal, text-based quantitative analysis of 60 national-level policy documents spanning 2011 to 2024, thereby complementing existing program-level SME policy evaluations with a systemic perspective on policy mixes and their evolution. Third, it provides policy recommendations for emerging and transitional economies seeking to cultivate their own layers of \u0026ldquo;hidden champions,\u0026rdquo; underscoring the necessity to rebalance policy mixes, enhance demand-side and process-oriented support (Yang et al., \u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2024\u003c/span\u003e), and improve implementation mechanisms to ensure effective ecosystem orchestration.\u003c/p\u003e \u003cp\u003eThe paper is organized as follows. Section \u003cspan refid=\"Sec2\" class=\"InternalRef\"\u003e2\u003c/span\u003e reviews relevant theories pertaining to the selection of policy instruments and introduces a two-dimensional framework that links different categories of instruments to specific policy objectives. Section \u003cspan refid=\"Sec8\" class=\"InternalRef\"\u003e3\u003c/span\u003e describes the research design, data sources, and coding procedures utilized in the study. Section \u003cspan refid=\"Sec13\" class=\"InternalRef\"\u003e4\u003c/span\u003e reports the empirical results regarding the distribution, temporal dynamics, and congruence between policy instruments and their targeted goals. Section \u003cspan refid=\"Sec17\" class=\"InternalRef\"\u003e5\u003c/span\u003e provides concluding observations, emphasizing the key findings and proposing potential strategies for enhancing China\u0026rsquo;s policy mix for small and medium-sized enterprises (SMEs) within the science and technology sector. Lastly, Section \u003cspan refid=\"Sec20\" class=\"InternalRef\"\u003e6\u003c/span\u003e addresses the study\u0026rsquo;s limitations and outlines recommendations for future research.\u003c/p\u003e"},{"header":"2 Construction of the Policy Text Analysis Framework","content":"\u003cdiv id=\"Sec3\" class=\"Section2\"\u003e \u003ch2\u003e2.1 Overview of the theory of policy-instrument selection\u003c/h2\u003e \u003cp\u003eThe theory of policy instrument selection, as a core topic in public policy research, has always been closely linked to government governance practices in its development context. The international academic community has constructed a systematic theoretical framework covering instrument attributes, configuration logic (Fotopoulos \u0026amp; Qian, \u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e2025\u003c/span\u003e), and implementation mechanisms. Early research mainly focused on the functional attributes, type classification, and applicable conditions of policy instruments. Hood (\u003cspan citationid=\"CR13\" class=\"CitationRef\"\u003e1983\u003c/span\u003e) developed the \"NATO model\", arguing that the selection of instruments is essentially a process of matching government resource endowments with policy objectives, and emphasizing that the selection and allocation of policy instruments should be based on the actual endowments of government resources and the needs of policy objectives. This view laid the foundation for understanding the instrument - objective relationship. Rothwell and Zegveld (\u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e1985\u003c/span\u003e) were convinced that a single instrument is difficult to meet complex policy objectives, and a complementary mechanism between instruments is needed. The three-dimensional classification framework of supply-side, environmental, and demand-side instruments they constructed not only reveals the differentiated functions of different types of instruments in innovation policies but also puts forward the hypothesis of the synergy effect of instrument combinations. Howlett (\u003cspan citationid=\"CR14\" class=\"CitationRef\"\u003e1991\u003c/span\u003e) further deepened the theory of policy instrument selection. In the \"goal - environment - resource\" decision-making triangle model, the author pointed out that the selection of policy instruments needs to comprehensively consider three dimensions: goal characteristics, institutional environment, and resource constraints. This model provides important theoretical support for the optimal allocation of policy instruments. In recent years, with the continuous changes in the policy implementation environment and social needs, scholars have paid increasing attention to the dynamic alignment and combination evolution laws of policy instruments. The above studies have not only promoted the evolution of the theory of policy instrument selection from single instrument analysis to systematic alignment research but also provided important enlightenment for understanding the dynamic optimization of the gradient cultivation policies for S\u0026amp;S SMEs.\u003c/p\u003e \u003cp\u003eThe theory of policy-instrument selection is a core topic in public policy research and has evolved in close interaction with changes in government governance practices. Early work focused on the functional attributes, typologies, and applicability conditions of instruments. In recent years, research has shifted from isolated instruments to policy mixes and their dynamic properties. Capano and Howlett (\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2020\u003c/span\u003e) develop a framework for analysing the dynamic selection and adjustment of instruments within policy mixes and stress that instrument portfolios must be recalibrated as policy problems evolve. Flanagan et al. (2021) show that the temporal configuration of instrument mixes\u0026mdash;when particular tools are introduced, scaled, or withdrawn\u0026mdash;has a decisive impact on innovation-policy outcomes. Parallel work in SME and innovation policy evaluation indicates that the composition and design of financial, regulatory, and demand-side instruments condition SME survival and innovation performance, underscoring the need to study instruments as interconnected systems rather than isolated levers.\u003c/p\u003e \u003cp\u003eChinese scholarship has localized these theoretical insights in the Chinese context. Studies document that instrument selection often reflects the dual logic of goal orientation and path dependence (Tang, \u003cspan citationid=\"CR25\" class=\"CitationRef\"\u003e2009\u003c/span\u003e), with persistent preferences for certain instrument types. Empirical analyses of science and technology policy reveal structural imbalances characterized by overloaded supply-side instruments and relatively absent demand-side instruments (Xu \u0026amp; Luo, \u003cspan citationid=\"CR32\" class=\"CitationRef\"\u003e2020\u003c/span\u003e), as well as mismatches between instrument clusters and multi-level policy goals (Fu et al., \u003cspan citationid=\"CR12\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Recent work also shows that dynamic optimization of policy instruments, including pruning redundant tools and adjusting combinations, can significantly improve policy effectiveness (Xu et al., \u003cspan citationid=\"CR33\" class=\"CitationRef\"\u003e2025\u003c/span\u003e). Within the S\u0026amp;S SME domain, research highlights industry heterogeneity in instrument effectiveness (Zhang et al., \u003cspan citationid=\"CR38\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) and suggests that there is an optimal threshold for instrument combinations beyond which marginal benefits decline or distortions emerge (Wang \u0026amp; Liu, \u003cspan citationid=\"CR27\" class=\"CitationRef\"\u003e2017\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eBeyond instrument typologies, emerging research conceptualizes governments as ecosystem orchestrators who align goals, resources, and coordination mechanisms among diverse actors (Lechner et al., \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). In entrepreneurial and industrial ecosystems, state and lead firms use hierarchical and relational governance to coordinate innovation networks (Uhlaner et al., \u003cspan citationid=\"CR26\" class=\"CitationRef\"\u003e2007\u003c/span\u003e), shared infrastructures, and market access. From this perspective, China\u0026rsquo;s gradient cultivation policies for S\u0026amp;S SMEs can be interpreted as a state-orchestrated attempt to configure a policy mix that shapes an innovation ecosystem for niche champions (Li et al., \u003cspan citationid=\"CR19\" class=\"CitationRef\"\u003e2019\u003c/span\u003e; Huang et al., \u003cspan citationid=\"CR15\" class=\"CitationRef\"\u003e2025\u003c/span\u003e). The effectiveness of such orchestration depends not only on the presence of particular instruments but also on the coherence, timing, and instrument\u0026ndash;objective alignment of the overall portfolio (Chen \u0026amp; Wu, \u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e2025\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eSynthesizing international and domestic research, the theory of policy-instrument selection has thus evolved from single-instrument analysis to a multi-dimensional system encompassing instrument attributes, combination logics, temporal dynamics, and ecosystem orchestration. These advances provide a solid theoretical foundation for analysing and optimizing the policy mix for S\u0026amp;S SME gradient cultivation. Building on this literature, the present study adopts the threefold classification of supply-side, environmental, and demand-side instruments and explicitly links these instrument types to differentiated policy objectives across the S\u0026amp;S SME life-cycle and industrial chain.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec4\" class=\"Section2\"\u003e \u003ch2\u003e2.2 Construction of the policy text analysis framework\u003c/h2\u003e \u003cp\u003eFocusing on the structural alignment relationship between policy instruments and policy objectives, this study constructs a two-dimensional analysis framework based on instrument types (X - dimension) and objective orientations (Y - dimension) to systematically reveal the gradient distribution characteristics, goal coordination status, and potential optimization paths of the instrument mix in the current cultivation policies for S\u0026amp;S SMEs.\u003c/p\u003e \u003cp\u003eFocusing on the structural alignment between policy instruments and policy objectives, this study constructs a two-dimensional analysis framework based on instrument types (X-dimension) and objective orientations (Y-dimension). The framework is designed to reveal the gradient distribution, goal coordination, and potential optimization paths of the current S\u0026amp;S SME policy mix as a state-orchestrated system.\u003c/p\u003e \u003cdiv id=\"Sec5\" class=\"Section3\"\u003e \u003ch2\u003e2.2.1 Policy-instrument dimension (X-dimension)\u003c/h2\u003e \u003cp\u003eA clear and operational classification of policy instruments is a prerequisite for reliable text analysis. Ambiguous or overlapping definitions can lead to inconsistent coding and misinterpretation of policy content. Drawing on Rothwell and Zegveld\u0026rsquo;s threefold classification and on existing empirical work on Chinese SME and innovation policies, this study categorizes instruments into supply-side, environmental, and demand-side types and further decomposes each type into subcategories that capture their core functions.\u003c/p\u003e \u003cp\u003eSupply-side instruments focus on the direct provision of innovation and growth factors and include five subcategories: fiscal support, financial support, science and technology (S\u0026amp;T) innovation support, talent recruitment and cultivation, and information support. Their core function is to fill critical resource gaps and enhance the internal capabilities of S\u0026amp;S SMEs. Environmental instruments aim to optimize the institutional and business environment and cover tax incentives, public services, goal-setting and strategic planning, intellectual property protection, and regulatory compliance. These instruments reduce transaction costs, strengthen legal and property-rights protection, and provide strategic guidance, thereby creating more predictable conditions for firm development. Demand-side instruments seek to stimulate market demand and include priority government procurement, channel development, service outsourcing, and overseas expansion. They use market signals and demand scenarios to guide firms\u0026rsquo; innovation directions and promote the commercialization and scaling of S\u0026amp;S SMEs\u0026rsquo; products and services.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab1\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 1\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eTypes, Names, and Definitions of Graded Cultivation Policy Instruments\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"4\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eInstrument Type\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eInstrument Name\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eInstrument Description\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eInstrument Subdivision\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\" morerows=\"4\" rowspan=\"5\"\u003e \u003cp\u003eSupply-side\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eFiscal support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eVarious financial inputs provided by the government to enterprises\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eFiscal subsidies, special funds, national development funds\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eFinancial support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eVarious financing supports provided by the government to enterprises\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003ePreferential loans, financing credit enhancement, guarantees, foreign exchange channels\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTechnology and innovation support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eSupport provided by the government for the development of science and technology\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eSupport for industry - university - research cooperation, establishment of technological innovation platforms\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTalent recruitment and cultivation\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003ePolicies implemented by the government regarding the education system and talent cultivation\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eTalent recruitment, skills training\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eInformation support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eSupport provided by the government to promote information exchange\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eConstruction of information exchange platforms, establishment of information networks\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\" morerows=\"4\" rowspan=\"5\"\u003e \u003cp\u003eEnvironmental\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTax incentives\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eVarious tax reduction and exemption measures implemented by the government for enterprises\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eReduction of indirect taxes, reduction of tax amounts, deduction of R\u0026amp;D expenses\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePublic services\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eVarious service - oriented measures provided by the government to facilitate enterprise development\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eInfrastructure construction, listing guidance, brand promotion\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGoal-setting and strategic planning\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eOverall layout and guidance made by the government to promote enterprise development\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eIndustrial development planning, encouragement of inter - enterprise cooperation\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eIntellectual property protection\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGovernment's strengthening of intellectual property protection\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eCracking down on infringement, patent protection, simplification of patent applications\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eRegulatory compliance\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eVarious laws, regulations, systems, and measures for regulating market order\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eAnti - infringement supervision, acceleration of patent examination\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\" morerows=\"3\" rowspan=\"4\"\u003e \u003cp\u003eDemand-side\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePriority government procurement\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGovernment's preferential procurement of products and services from S\u0026amp;S SMEs\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003ePublic service procurement, demonstration project construction\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eChannel development\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eVarious measures taken by the government to promote import and export trade\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eCross - border matching, export trade promotion\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eService outsourcing\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGovernment agencies entrust R\u0026amp;D plans to enterprises or research institutions\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eR\u0026amp;D outsourcing, university cooperation projects\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eOverseas expansion\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGovernment's establishment or assistance in the establishment of overseas branches by enterprises\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eEstablishment of overseas institutions, expansion of international markets\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eThis classification not only reflects the main policy levers recurrently used in China\u0026rsquo;s S\u0026amp;S SME policy texts\u0026mdash;such as financing support, priority government procurement, and public services\u0026mdash;but also facilitates quantitative content analysis by providing clear, mutually exclusive categories that can be consistently identified and coded.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec6\" class=\"Section3\"\u003e \u003ch2\u003e2.2.2 Policy-objective dimension (Y-dimension)\u003c/h2\u003e \u003cp\u003eAlthough China\u0026rsquo;s S\u0026amp;S SME gradient cultivation policies broadly point to high-quality development and innovation-driven growth, their explicit expression of objectives is often fragmented and lacks clear hierarchical structure. To reconstruct the underlying goal system, this study applies three-stage grounded-theory coding to policy texts and identifies five core policy objectives with strong internal logical connections: graded growth (Chen et al., \u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e2024\u003c/span\u003e), innovation-driven development, industrial chains enhancement and gap filling, integrated development, and quality and efficiency improvement.\u003c/p\u003e \u003cp\u003eGraded growth captures the staged progression of S\u0026amp;S SMEs from start-up and innovative SME status to S\u0026amp;S SME, \u0026ldquo;Little Giant,\u0026rdquo; and single-product champion, emphasizing the continuity and support needs across the firm life-cycle. Innovation-driven development focuses on breaking through key core technologies, promoting R\u0026amp;D and commercialization, and building independent innovation capabilities. Industrial chains enhancement and gap filling stresses the reinforcement of weak links, enhancement of supply-chain stability, and improvement of domestic substitution capacity and bargaining power within global value chains. Integrated development highlights coordinated collaboration among large, medium, and small firms, and the integration of industry, university, research, and application, aiming to create an open, interactive innovation ecosystem. Quality and efficiency improvement targets profitability, total factor productivity, and resource allocation efficiency, aligning with the macro-level agenda of high-quality economic development.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003cp\u003eCollectively, these objectives constitute a coherent cyclical framework, progressing from \"graded growth\" (form) through \"innovation-driven development\" (core), alongside \"industrial chain enhancement and gap filling\" and \"integrated development\" (path), ultimately culminating in the attainment of \"quality and efficiency improvement\" (result). This framework aligns with international discourse on niche-champion and Mittelstand enterprises, which emphasize phased capability development, integration within value-chain networks, and the maintenance of sustained efficiency and innovation. Within this context, various policy instruments can be evaluated based on their effectiveness in supporting specific objectives and the overall balance achieved in aligning instruments with these objectives.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec7\" class=\"Section3\"\u003e \u003ch2\u003e2.2.3 Two-dimensional instrument-objective analysis framework\u003c/h2\u003e \u003cp\u003eIntegrating the dimensions of policy instruments and policy objectives produces a two-dimensional analytical framework, termed the \u0026ldquo;policy instrument\u0026ndash;policy objective\u0026rdquo; framework (see Fig.\u0026nbsp;\u003cspan refid=\"Fig2\" class=\"InternalRef\"\u003e2\u003c/span\u003e), which facilitates a systematic assessment of China\u0026rsquo;s policy mix for small and medium-sized enterprises (SMEs) in the science and technology sector. Within this framework, supply-side and demand-side instruments are posited to exert more direct influences on enterprise growth by respectively driving and attracting development. In contrast, environmental instruments are understood to indirectly affect enterprise growth by shaping the institutional context and market regulations. Furthermore, the framework underscores that different categories of instruments may follow distinct mechanisms of action; for instance, supply-side instruments may function through a sequence of \u0026ldquo;resource gap filling, capability enhancement, and ecosystem integration,\u0026rdquo; whereas demand-side instruments may operate via \u0026ldquo;demand identification, value realization, and network expansion.\u0026rdquo;\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003cp\u003eCrucially, the framework underscores that instruments rarely act in isolation. Instead, they form policy mixes whose effectiveness depends on temporal coordination, intensity matching, and functional complementarity across instrument types and goal dimensions. The quality of instrument\u0026ndash;objective alignment\u0026mdash;both within and across the supply-side, environmental, and demand-side subsystems\u0026mdash;thus becomes a central criterion for evaluating the performance of the S\u0026amp;S SME policy mix as a state-orchestrated system. The subsequent empirical analysis uses this two-dimensional framework to code policy texts, quantify instrument\u0026ndash;objective matches, and diagnose structural imbalances and coordination gaps in China\u0026rsquo;s gradient cultivation policies for S\u0026amp;S SMEs.\u003c/p\u003e \u003c/div\u003e \u003c/div\u003e"},{"header":"3 Research Design","content":"\u003cdiv id=\"Sec9\" class=\"Section2\"\u003e \u003ch2\u003e3.1 Data collection\u003c/h2\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab2\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 2\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eList of Policy Documents for Gradient Cultivation of S\u0026amp;S SMEs\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"4\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eNo.\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePolicy Name\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eIssuing Unit\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eTime\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e\"12th Five - Year\" Plan for the Growth of Small and Medium - sized Enterprises\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eMIIT\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e2011\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eOpinions of the State Council on Further Supporting the Healthy Development of Small and Micro - sized Enterprises\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eState Council\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e2012\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGuiding Opinions on Promoting the \"Specialized, Sophisticated, Distinctive, and Innovative\" Development of Small and Medium - sized Enterprises\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eMIIT\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e2013\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e4\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGuiding Opinions on Further Promoting the Development of Industrial Clusters\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eMIIT\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e2015\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e5\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eImplementation Plan for the Special Action for the Cultivation and Improvement of Single - product Champion Enterprises in the Manufacturing Industry\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eMIIT\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e2016\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u0026hellip;\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e\u0026hellip;\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e\u0026hellip;\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e\u0026hellip;\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e59\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSpecial Action Plan for the Digital Empowerment of Small and Medium - sized Enterprises (2025\u0026ndash;2027)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eMIIT and other four ministries\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e2024\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e60\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eEvaluation Index System for the \"Specialized, Sophisticated, Distinctive, and Innovative\" Development of Small and Medium - sized Enterprises\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eMIIT\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e2024\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003ctfoot\u003e \u003ctr\u003e\u003ctd colspan=\"4\"\u003eNote: MIIT - Ministry of Industry and Information Technology.\u003c/td\u003e\u003c/tr\u003e \u003c/tfoot\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eTo ensure the systematicness and scientificity of policy analysis, data collection strictly follows the following criteria: (1) Authority of sources. Core official information sources such as the National Government Service Platform, Pkulaw Legal Database, and MIIT's High - quality SME Gradient Cultivation Platform are selected to ensure the legal validity and version accuracy of policy texts. (2) Uniformity of levels. It is limited to central - level policy documents (issued by the State Council, MIIT, etc.), and regional policies of local governments are excluded to ensure the homogeneity of research objects. (3) Timeliness and comprehensiveness. All valid documents from the policy germination period in 2011 to the latest policy release in 2024 are obtained to dynamically present the policy evolution context and phased characteristics.\u003c/p\u003e \u003cp\u003eIn the text screening process, three criteria are implemented: (1) Thematic relevance. The policy text must clearly involve the gradient cultivation of S\u0026amp;S SMEs. (2) Text standardization. It is limited to document types with administrative effectiveness, such as laws and regulations, opinions, measures, plans, notices, and planning outlines, excluding interpretive materials and inter - departmental forwarding letters. (3) Substantiveness of content. It is required to include specific cultivation measures or implementation plans, and principle - based expression documents are excluded. After systematic screening, 60 valid policy texts are finally obtained (see Table\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e), with a time span from September 2011 to December 2024, fully covering the development process of China's gradient cultivation policies for S\u0026amp;S SMEs.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec10\" class=\"Section2\"\u003e \u003ch2\u003e3.2 Research methods\u003c/h2\u003e \u003cp\u003eThe study combines qualitative content analysis with quantitative text analysis to evaluate the structural characteristics, instrument\u0026ndash;objective alignment, and dynamic evolution of the S\u0026amp;S SME policy mix. First, building on Rothwell and Zegveld (\u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e1985\u003c/span\u003e)\u0026rsquo;s classification and the grounded-theory-based objective system introduced in Section \u003cspan refid=\"Sec2\" class=\"InternalRef\"\u003e2\u003c/span\u003e, a two-dimensional \u0026ldquo;instrument\u0026ndash;objective\u0026rdquo; analysis matrix is constructed. This matrix specifies how each identified policy clause can be positioned along both an instrument dimension (supply-side, environmental, demand-side and sub-types) and an objective dimension (graded growth, innovation-driven, industrial chains enhancement and gap filling, integrated development, quality and efficiency improvement).\u003c/p\u003e \u003cp\u003eSecond, NVivo 12 is used to preprocess the policy texts and identify candidate clauses containing instrument and goal elements. A combination of keyword dictionaries (e.g. \u0026ldquo;special fund,\u0026rdquo; \u0026ldquo;tax deduction,\u0026rdquo; \u0026ldquo;public service platform,\u0026rdquo; \u0026ldquo;priority government procurement\u0026rdquo;) and semantic pattern recognition is employed to extract content units. Each clause is then manually reviewed and coded by the research team, following the classification rules elaborated in Table\u0026nbsp;\u003cspan refid=\"Tab1\" class=\"InternalRef\"\u003e1\u003c/span\u003e and the objective labels derived from grounded theory. In the quantitative stage, frequency statistics, cross‑tabulations, and time‑series plots are used to derive: (1) overall distributions of instrument types and sub‑types; (2) joint distributions of instruments and objectives; and (3) temporal evolution patterns by instrument type and sub‑type.\u003c/p\u003e \u003cp\u003eFinally, drawing on the policy-mix and instrument-choice literature, the results are interpreted through the lens of instrument\u0026ndash;objective alignment and ecosystem orchestration, with a particular focus on structural balance, subsystem coordination, and life-cycle and value-chain coverage. This allows the empirical findings to speak directly to international debates on SME policy mixes and state-led niche-champion strategies.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec11\" class=\"Section2\"\u003e \u003ch2\u003e3.3 Coding of content units\u003c/h2\u003e \u003cp\u003eThe coding procedure follows a multi-step, rigorously documented process. First, policy texts are decomposed into content units using policy articles and paragraphs as the basic analytical units. A four-level coding scheme (\u0026ldquo;document\u0026ndash;chapter\u0026ndash;article\u0026ndash;paragraph\u0026rdquo;) is adopted, and for complex clauses that contain multiple distinct policy actions, a fifth level is added to capture each instrument element separately (e.g. \u0026ldquo;1\u0026ndash;2\u0026ndash;3\u0026ndash;4\u0026ndash;1\u0026rdquo;). This ensures that compound clauses are decomposed into analytically meaningful units.\u003c/p\u003e \u003cp\u003eSecond, instrument types are identified and classified according to the operational definitions in Table\u0026nbsp;\u003cspan refid=\"Tab1\" class=\"InternalRef\"\u003e1\u003c/span\u003e, applying a \u0026ldquo;main effect plus supplementary effects\u0026rdquo; principle for compound clauses. For example, a clause that simultaneously introduces R\u0026amp;D tax deductions and special funds is coded both as an environmental instrument (tax incentives) and a supply-side instrument (fiscal support), preserving their multi-instrument character. Third, each clause is mapped onto one or more policy objectives in the five-dimensional goal system (G1\u0026ndash;G5), based on explicit goal statements and inferred intent. For instance, a clause stating that \u0026ldquo;fiscal subsidies support technological research by \u0026lsquo;Little Giant\u0026rsquo; enterprises\u0026rdquo; is coded as a supply-side fiscal support instrument linked to the innovation-driven objective.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab3\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 3\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eExample of Coding Units for Policy Text Content Analysis\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"6\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eNo.\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePolicy Text\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eContent Analysis Unit\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eInstrument Type\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003eInstrument Name\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c6\"\u003e \u003cp\u003eCoding\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e\"12th Five - Year\" Plan for the Growth of Small and Medium - sized Enterprises\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eAdhere to the \"Specialized, Sophisticated, Distinctive, and Innovative\" approach. Regard the \"Specialized, Sophisticated, Distinctive, and Innovative\" development direction as an important way for SMEs to transform and upgrade and change their development mode... (G1)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eEnvironmental\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eGoal-setting and strategic planning\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e1\u0026ndash;2\u0026ndash;1\u0026ndash;5\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\" morerows=\"2\" rowspan=\"3\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\" morerows=\"2\" rowspan=\"3\"\u003e \u003cp\u003eGuiding Opinions on Promoting the \"Specialized, Sophisticated, Distinctive, and Innovative\" Development of Small and Medium - sized Enterprises\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\" morerows=\"2\" rowspan=\"3\"\u003e \u003cp\u003eGive play to the guiding and supporting role of various special funds and funds for supporting the development of SMEs..., implement the pre - tax additional deduction of enterprise R\u0026amp;D expenses..., and expand the financing channels for supporting the technological innovation of SMEs... (G2)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003eSupply - side\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eFiscal Support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e3\u0026ndash;3\u0026ndash;1\u0026ndash;1\u0026ndash;1\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eFinancial Support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e3\u0026ndash;3\u0026ndash;1\u0026ndash;1\u0026ndash;2\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eEnvironmental\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eTax Reduction and Exemption\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e3\u0026ndash;3\u0026ndash;1\u0026ndash;1\u0026ndash;3\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eTo improve efficiency and accuracy, Python regular expressions and keyword matching are used for preliminary automated identification, followed by manual verification and correction by trained coders. This hybrid \u0026ldquo;machine-assisted plus manual verification\u0026rdquo; approach reduces omission and misclassification risks while ensuring conceptual consistency.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec12\" class=\"Section2\"\u003e \u003ch2\u003e3.4 Reliability and validity\u003c/h2\u003e \u003cp\u003eSeveral measures are taken to ensure the reliability and validity of the coding. Two senior experts with long-term research experience on S\u0026amp;S SMEs are involved in the design of the coding framework and periodically review coding decisions, providing substantive and methodological guidance. The coding team\u0026mdash;comprising the project leader and three postgraduate students\u0026mdash;is divided into two groups that independently code a common subset of texts after joint training and calibration sessions.\u003c/p\u003e \u003cp\u003eInter-coder reliability is assessed using the Kappa coefficient (Fleiss \u0026amp; Cohen, \u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e1973\u003c/span\u003e). The resulting Kappa of 0.846 (p\u0026thinsp;\u0026lt;\u0026thinsp;0.001) exceeds the commonly accepted threshold of 0.75, indicating high consistency in instrument and goal coding. Content validity is assessed through an expert scoring exercise in which the two experts rate the appropriateness of the instrument classification and instrument\u0026ndash;objective matching on a 0\u0026ndash;10 scale; the average score of 9.301 suggests that the constructed framework has strong explanatory power and fits well with the observed policy texts. Together, these procedures provide a robust foundation for the subsequent quantitative analysis and interpretation.\u003c/p\u003e \u003c/div\u003e"},{"header":"4 Empirical analysis","content":"\u003cdiv id=\"Sec14\" class=\"Section2\"\u003e \u003ch2\u003e4.1 Distribution of policy instruments\u003c/h2\u003e \u003cp\u003eThe analysis of 563 coded policy clauses shows a strongly unbalanced configuration of the S\u0026amp;S SME policy mix. Environmental instruments account for 53.11% of all instrument mentions, followed by supply-side instruments at 41.74%, while demand-side instruments represent only 5.15%. This \u0026ldquo;environment-led, supply-assisted, demand-weak\u0026rdquo; pattern indicates that the policy system strongly emphasizes institutional optimization and factor provision, but offers limited direct support for market creation, demand stimulation, and commercial scaling.\u003c/p\u003e \u003cp\u003eWithin the environmental subsystem, public services (20.43%) and goal-setting and strategic planning (18.47%) dominate, whereas intellectual property protection (4.44%) and tax incentives (2.66%) are under-represented. This points to a preference for indirect support via infrastructure, guidance, and generic services over strong legal and fiscal incentives for innovation, which may weaken long-term innovation incentives and knowledge appropriation. In the supply-side subsystem, financial support (14.39%), information support (7.99%), and technology and innovation support (7.99%) are most prominent, while fiscal support (6.39%) and talent recruitment and cultivation (4.97%) remain relatively modest. Given the documented importance of skills and human capital for innovation and the development of hidden-champion-type firms, this pattern suggests an \u0026ldquo;emphasizing financing and neglecting cultivation\u0026rdquo; tendency.\u003c/p\u003e \u003cp\u003eDemand-side instruments are sparse and skewed towards domestic-market instruments such as channel development (2.31%) and priority government procurement (1.42%), with overseas expansion (1.07%) and service outsourcing (0.36%) almost absent. In the context of increasing international competition and trade frictions, this narrow demand-side toolkit limits support for S\u0026amp;S SMEs\u0026rsquo; internationalization, participation in global value chains, and use of public procurement and outsourcing as innovation-demand signals. Overall, the current instrument distribution falls short of the closed-loop support required for S\u0026amp;S SMEs to progress from technological breakthroughs to stable domestic and global niche positions.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab4\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 4\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eDistribution of Policy Instrument Systems for Gradient Cultivation of S\u0026amp;S SMEs\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"6\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eInstrument Type\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eInstrument Name\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eCoding of Policy Clauses\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eQuantity\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003eProportion\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c6\"\u003e \u003cp\u003eTotal\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\" morerows=\"4\" rowspan=\"5\"\u003e \u003cp\u003eSupply - side\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eFiscal Support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e2\u0026ndash;2\u0026ndash;3, 2\u0026ndash;2\u0026ndash;4, 2\u0026ndash;4\u0026ndash;16\u0026thinsp;\u0026minus;\u0026thinsp;1, 2\u0026ndash;4\u0026ndash;17\u0026thinsp;\u0026minus;\u0026thinsp;1, 2\u0026ndash;4\u0026ndash;25\u0026thinsp;\u0026minus;\u0026thinsp;2, 2\u0026ndash;7\u0026ndash;26\u0026thinsp;\u0026minus;\u0026thinsp;2, 3\u0026ndash;3\u0026ndash;1\u0026ndash;1, 6\u0026thinsp;\u0026minus;\u0026thinsp;4\u0026ndash;1, 8\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;2\u0026thinsp;\u0026minus;\u0026thinsp;1, 9\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;2, 12\u0026thinsp;\u0026minus;\u0026thinsp;4\u0026ndash;4,...\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e36\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e6.39%\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\" morerows=\"4\" rowspan=\"5\"\u003e \u003cp\u003e41.74%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eFinancial Support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e2\u0026ndash;3\u0026ndash;7, 2\u0026ndash;3\u0026ndash;8, 2\u0026ndash;3\u0026ndash;9\u0026thinsp;\u0026minus;\u0026thinsp;1, 2\u0026ndash;3\u0026ndash;10, 2\u0026ndash;3\u0026ndash;11, 2\u0026ndash;4\u0026ndash;17\u0026thinsp;\u0026minus;\u0026thinsp;2, 3\u0026ndash;3\u0026ndash;1\u0026ndash;2, 8\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;2\u0026ndash;3\u0026ndash;1, 9\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;4\u0026thinsp;\u0026minus;\u0026thinsp;1, 11\u0026thinsp;\u0026minus;\u0026thinsp;4\u0026ndash;2\u0026thinsp;\u0026minus;\u0026thinsp;1, 12\u0026thinsp;\u0026minus;\u0026thinsp;3\u0026ndash;1, 12\u0026thinsp;\u0026minus;\u0026thinsp;3\u0026ndash;2,...\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e81\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e14.39%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTechnology and innovation support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e2\u0026ndash;3\u0026ndash;12, 2\u0026ndash;3\u0026ndash;13\u0026thinsp;\u0026minus;\u0026thinsp;1, 2\u0026ndash;4\u0026ndash;15\u0026thinsp;\u0026minus;\u0026thinsp;1, 3\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;6\u0026thinsp;\u0026minus;\u0026thinsp;2, 3\u0026ndash;3\u0026ndash;2\u0026ndash;2, 6\u0026thinsp;\u0026minus;\u0026thinsp;3\u0026ndash;3\u0026thinsp;\u0026minus;\u0026thinsp;1, 7\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;2\u0026thinsp;\u0026minus;\u0026thinsp;1, 9\u0026thinsp;\u0026minus;\u0026thinsp;3\u0026ndash;4\u0026thinsp;\u0026minus;\u0026thinsp;1, 10\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;1, 11\u0026thinsp;\u0026minus;\u0026thinsp;4\u0026ndash;2\u0026ndash;2, 12\u0026thinsp;\u0026minus;\u0026thinsp;1\u0026ndash;1, 12\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;1\u0026ndash;2,...\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e45\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e7.99%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTalent recruitment and cultivation\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e2\u0026ndash;4\u0026ndash;15\u0026thinsp;\u0026minus;\u0026thinsp;2, 2\u0026ndash;4\u0026ndash;24, 2\u0026ndash;4\u0026ndash;25\u0026thinsp;\u0026minus;\u0026thinsp;1, 3\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;5\u0026thinsp;\u0026minus;\u0026thinsp;2, 5\u0026ndash;6\u0026ndash;14, 9\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;5, 12\u0026thinsp;\u0026minus;\u0026thinsp;6\u0026ndash;3, 24\u0026thinsp;\u0026minus;\u0026thinsp;9\u0026ndash;2, 26\u0026thinsp;\u0026minus;\u0026thinsp;10\u0026ndash;29, 26\u0026thinsp;\u0026minus;\u0026thinsp;10\u0026ndash;30,...\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e28\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e4.97%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eInformation Support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e2\u0026ndash;3\u0026ndash;13\u0026thinsp;\u0026minus;\u0026thinsp;2, 2\u0026ndash;4\u0026ndash;18\u0026thinsp;\u0026minus;\u0026thinsp;2, 2\u0026ndash;8\u0026ndash;29, 3\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;3\u0026thinsp;\u0026minus;\u0026thinsp;2, 6\u0026thinsp;\u0026minus;\u0026thinsp;4\u0026ndash;2\u0026thinsp;\u0026minus;\u0026thinsp;1, 6\u0026thinsp;\u0026minus;\u0026thinsp;3\u0026ndash;2, 6\u0026thinsp;\u0026minus;\u0026thinsp;3\u0026ndash;4\u0026thinsp;\u0026minus;\u0026thinsp;1, 8\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;2\u0026ndash;3\u0026ndash;2, 8\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;4\u0026thinsp;\u0026minus;\u0026thinsp;1, 8\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;5, 12\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;4, 12\u0026thinsp;\u0026minus;\u0026thinsp;6\u0026ndash;2, 15\u0026thinsp;\u0026minus;\u0026thinsp;4\u0026ndash;13, 17\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;24,...\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e45\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e7.99%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\" morerows=\"4\" rowspan=\"5\"\u003e \u003cp\u003eEnvironmental\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTax Incentives\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e2\u0026ndash;2\u0026ndash;2, 2\u0026ndash;2\u0026ndash;6\u0026thinsp;\u0026minus;\u0026thinsp;1, 3\u0026ndash;3\u0026ndash;1\u0026ndash;3, 8\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;2\u0026ndash;2, 9\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;3, 9\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;4\u0026thinsp;\u0026minus;\u0026thinsp;2, 12\u0026thinsp;\u0026minus;\u0026thinsp;4\u0026ndash;2, 15\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;5\u0026thinsp;\u0026minus;\u0026thinsp;2, 15\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;6\u0026thinsp;\u0026minus;\u0026thinsp;2, 17\u0026thinsp;\u0026minus;\u0026thinsp;3\u0026ndash;15, 18\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;7,...\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e15\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e2.66%\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\" morerows=\"4\" rowspan=\"5\"\u003e \u003cp\u003e53.11%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePublic Services\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e2\u0026ndash;2\u0026ndash;6\u0026thinsp;\u0026minus;\u0026thinsp;2, 2\u0026ndash;4\u0026ndash;16\u0026thinsp;\u0026minus;\u0026thinsp;2, 2\u0026ndash;4\u0026ndash;19, 2\u0026ndash;4\u0026ndash;20, 2\u0026ndash;4\u0026ndash;21, 2\u0026ndash;4\u0026ndash;22, 2\u0026ndash;4\u0026ndash;23, 2\u0026ndash;7\u0026ndash;26\u0026thinsp;\u0026minus;\u0026thinsp;3, 2\u0026ndash;7\u0026ndash;27\u0026thinsp;\u0026minus;\u0026thinsp;1, 2\u0026ndash;8\u0026ndash;28, 3\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;4\u0026thinsp;\u0026minus;\u0026thinsp;2, 3\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;5\u0026thinsp;\u0026minus;\u0026thinsp;3,...\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e115\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e20.43%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGoal-setting and strategic planning\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e1\u0026ndash;2\u0026ndash;1\u0026ndash;5, 1\u0026ndash;3\u0026ndash;3\u0026thinsp;\u0026minus;\u0026thinsp;1, 1\u0026ndash;3\u0026ndash;3\u0026ndash;3, 1\u0026ndash;3\u0026ndash;3\u0026ndash;4, 1\u0026ndash;3\u0026ndash;3\u0026ndash;5, 1\u0026ndash;3\u0026ndash;3\u0026ndash;6, 2\u0026ndash;4\u0026ndash;15\u0026thinsp;\u0026minus;\u0026thinsp;3, 2\u0026ndash;7\u0026ndash;26\u0026thinsp;\u0026minus;\u0026thinsp;1, 2\u0026ndash;7\u0026ndash;27\u0026thinsp;\u0026minus;\u0026thinsp;2, 3\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;1, 3\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;2\u0026thinsp;\u0026minus;\u0026thinsp;1, 3\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;3\u0026thinsp;\u0026minus;\u0026thinsp;1,...\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e104\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e18.47%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eIntellectual Property Protection\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e2\u0026ndash;3\u0026ndash;14, 3\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;2\u0026ndash;2, 9\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;1\u0026ndash;2, 11\u0026thinsp;\u0026minus;\u0026thinsp;4\u0026ndash;2\u0026ndash;4, 12\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;2, 26\u0026thinsp;\u0026minus;\u0026thinsp;6\u0026ndash;16, 26\u0026thinsp;\u0026minus;\u0026thinsp;6\u0026ndash;17, 26\u0026thinsp;\u0026minus;\u0026thinsp;6\u0026ndash;18\u0026thinsp;\u0026minus;\u0026thinsp;1, 27\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;16, 28\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;4\u0026thinsp;\u0026minus;\u0026thinsp;3,...\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e25\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e4.44%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eRegulatory Compliance\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e6\u0026thinsp;\u0026minus;\u0026thinsp;3\u0026ndash;4\u0026thinsp;\u0026minus;\u0026thinsp;2, 8\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;4\u0026thinsp;\u0026minus;\u0026thinsp;3, 9\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;1\u0026ndash;3, 12\u0026thinsp;\u0026minus;\u0026thinsp;1\u0026ndash;3, 12\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;1, 12\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;2\u0026ndash;2, 12\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;3, 12\u0026thinsp;\u0026minus;\u0026thinsp;3\u0026ndash;5, 13\u0026thinsp;\u0026minus;\u0026thinsp;4\u0026ndash;11\u0026thinsp;\u0026minus;\u0026thinsp;2, 15\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;18, 17\u0026thinsp;\u0026minus;\u0026thinsp;3\u0026ndash;13,...\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e40\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e7.10%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\" morerows=\"3\" rowspan=\"4\"\u003e \u003cp\u003eDemand - side\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePriority government procurement\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e2\u0026ndash;2\u0026ndash;5, 9\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;1\u0026ndash;4, 12\u0026thinsp;\u0026minus;\u0026thinsp;4\u0026ndash;3, 15\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;7\u0026thinsp;\u0026minus;\u0026thinsp;2, 18\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;8, 26\u0026thinsp;\u0026minus;\u0026thinsp;7\u0026ndash;20, 29\u0026thinsp;\u0026minus;\u0026thinsp;8\u0026ndash;2, 44\u0026thinsp;\u0026minus;\u0026thinsp;1\u0026ndash;5\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e8\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e1.42%\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\" morerows=\"3\" rowspan=\"4\"\u003e \u003cp\u003e5.15%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eChannel development\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e2\u0026ndash;3\u0026ndash;9\u0026thinsp;\u0026minus;\u0026thinsp;2, 2\u0026ndash;4\u0026ndash;18\u0026thinsp;\u0026minus;\u0026thinsp;1, 12\u0026thinsp;\u0026minus;\u0026thinsp;6\u0026ndash;4, 24\u0026thinsp;\u0026minus;\u0026thinsp;8, 26\u0026thinsp;\u0026minus;\u0026thinsp;7\u0026ndash;19\u0026thinsp;\u0026minus;\u0026thinsp;1, 26\u0026thinsp;\u0026minus;\u0026thinsp;7\u0026ndash;22, 26\u0026thinsp;\u0026minus;\u0026thinsp;7\u0026ndash;23, 27\u0026thinsp;\u0026minus;\u0026thinsp;8\u0026ndash;24, 27\u0026thinsp;\u0026minus;\u0026thinsp;8\u0026ndash;25, 29\u0026thinsp;\u0026minus;\u0026thinsp;8\u0026ndash;3, 41\u0026thinsp;\u0026minus;\u0026thinsp;1\u0026ndash;2, 44\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;30\u0026thinsp;\u0026minus;\u0026thinsp;2,...\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e13\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e2.31%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eService Outsourcing\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e44\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;30\u0026thinsp;\u0026minus;\u0026thinsp;1, 55\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;4\u0026thinsp;\u0026minus;\u0026thinsp;2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0.36%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eOverseas expansion\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e20\u0026thinsp;\u0026minus;\u0026thinsp;2\u0026ndash;1\u0026ndash;4, 26\u0026thinsp;\u0026minus;\u0026thinsp;6\u0026ndash;18\u0026thinsp;\u0026minus;\u0026thinsp;1, 26\u0026thinsp;\u0026minus;\u0026thinsp;7\u0026ndash;19\u0026thinsp;\u0026minus;\u0026thinsp;2, 29\u0026thinsp;\u0026minus;\u0026thinsp;8\u0026ndash;4, 55\u0026thinsp;\u0026minus;\u0026thinsp;5\u0026ndash;4\u0026thinsp;\u0026minus;\u0026thinsp;3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e6\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e1.07%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"3\" nameend=\"c3\" namest=\"c1\"\u003e \u003cp\u003eTotal\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e563\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e100%\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e100%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec15\" class=\"Section2\"\u003e \u003ch2\u003e4.2 Instrument-objective alignment\u003c/h2\u003e \u003cp\u003eThe two-dimensional matching analysis reveals further imbalances at the level of policy objectives. Across all instrument types, policy support is concentrated on quality and efficiency improvement (258 instrument\u0026ndash;objective matches, 42.09%) and innovation-driven development (143 matches, 23.33%). Support for graded growth (59 matches, 9.62%) and industrial chains enhancement and gap filling (52 matches, 8.48%) is much weaker, while integrated development occupies a middle position (101 matches, 16.48%). This indicates a bias towards result-oriented objectives and internal firm performance, with insufficient emphasis on life-cycle support and value-chain resilience.\u003c/p\u003e \u003cp\u003eSupply‑side instruments predominantly target innovation‑driven (29.43%) and quality and efficiency improvement (35.09%) objectives, driven by technology and innovation support, talent measures, and financial and fiscal support. By contrast, only 10.57% and 9.81% of supply‑side instrument matches relate to graded growth and industrial‑chain strengthening, suggesting that the design of supply‑side support has not yet fully internalized the staged growth logic and chain‑position demands of S\u0026amp;S SMEs. Environmental instruments show a similar pattern: nearly half of their matches support quality and efficiency improvement (48.11%), with more modest attention to innovation‑driven (19.18%) and integrated development (17.30%), and limited coverage of graded growth (8.18%) and industrial‑chain objectives (7.23%). The institutional environment therefore still underperforms in facilitating stage‑to‑stage progression and chain‑node coordination.\u003c/p\u003e \u003cp\u003eDemand-side instruments are few in number but distributed across several objectives, with relative emphasis on quality and efficiency improvement (40.00%) and integrated development (20.00%). Nevertheless, their support for innovation-driven and industrial-chain strengthening goals is extremely limited, and their potential to trigger learning, upgrading, and network expansion through public procurement, outsourcing, and internationalization remains largely untapped. Taken together, the current instrument\u0026ndash;objective matching structure can be summarized as \u0026ldquo;quality and efficiency-led, innovation-supported, growth-path and chain-construction supplemented,\u0026rdquo; which poses risks for long-term resilience and gradient upgrading.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab5\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 5\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eAlignment of \"Policy Instruments vs. Policy Objectives\"\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"8\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c7\" colnum=\"7\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c8\" colnum=\"8\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003ePolicy Instruments\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003eInstrument Name\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colspan=\"5\" nameend=\"c7\" namest=\"c3\"\u003e \u003cp\u003ePolicy Objectives\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c8\"\u003e \u003cp\u003eTotal\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGraded growth\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eInnovation - driven\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003eIndustrial chains enhancement and gap filling\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c6\"\u003e \u003cp\u003eIntegrated Development\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c7\"\u003e \u003cp\u003eQuality and Efficiency Improvement\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\" morerows=\"5\" rowspan=\"6\"\u003e \u003cp\u003eSupply - side\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eFiscal Support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e10\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e7\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e6\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e18\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\" morerows=\"5\" rowspan=\"6\"\u003e \u003cp\u003e265\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eFinancial Support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e10\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e12\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e5\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e15\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e42\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTechnology and innovation support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e31\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e10\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e8\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e4\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTalent recruitment and cultivation\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e16\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e9\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eInformation Support\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e12\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e4\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e13\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e20\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSubtotal/Proportion\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(28, 10.57%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e(78, 29.43%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e(26, 9.81%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e(40, 15.09%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e(93, 35.09%)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\" morerows=\"5\" rowspan=\"6\"\u003e \u003cp\u003eEnvironmental\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTax Incentives\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e0\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e11\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\" morerows=\"5\" rowspan=\"6\"\u003e \u003cp\u003e318\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePublic Services\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e6\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e13\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e6\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e24\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e69\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGoal-setting and strategic planning\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e17\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e30\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e11\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e26\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e32\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eIntellectual Property Protection\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e12\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e4\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e8\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eRegulatory Compliance\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e33\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSubtotal/Proportion\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(26, 8.18%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e(61, 19.18%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e(23, 7.23%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e(55, 17.30%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e(153, 48.11%)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\" morerows=\"4\" rowspan=\"5\"\u003e \u003cp\u003eDemand - side\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePriority government procurement\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e6\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\" morerows=\"4\" rowspan=\"5\"\u003e \u003cp\u003e30\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eChannel development\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e4\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e4\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eService Outsourcing\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e0\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e0\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eOverseas expansion\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e4\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSubtotal/Proportion\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(5, 16.67%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e(4, 13.33%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e(3, 10.00%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e(6, 20.00%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e(12, 40.00%)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eTota\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e\u003cb\u003e59\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e\u003cb\u003e143\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e\u003cb\u003e52\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e\u003cb\u003e101\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e\u003cb\u003e258\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e \u003cp\u003e613\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c2\" namest=\"c1\"\u003e \u003cp\u003eProportion\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e\u003cb\u003e9.62%\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e\u003cb\u003e23.33%\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e\u003cb\u003e8.48%\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e\u003cb\u003e16.48%\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e\u003cb\u003e42.09%\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e \u003cp\u003e100%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec16\" class=\"Section2\"\u003e \u003ch2\u003e4.3 Evolution of the policy mix\u003c/h2\u003e \u003cp\u003eThe temporal analysis (see Fig.\u0026nbsp;\u003cspan refid=\"Fig3\" class=\"InternalRef\"\u003e3\u003c/span\u003e) shows that the S\u0026amp;S SME policy mix has evolved in distinct phases. In terms of quantity, the number of instrument mentions grows steadily from 2011, surges from 2019 onwards, and peaks around 2021\u0026ndash;2022, when both environmental (66 instances) and supply-side instruments (55 instances) reach historical highs. This intensive policy phase coincides with heightened external shocks, including the COVID-19 pandemic and intensifying geo-economic tensions, and reflects an explicit policy effort to support S\u0026amp;S SMEs and strengthen supply-chain security. After 2022, the overall number of instrument mentions declines, suggesting a shift from rapid expansion of policy coverage to consolidation, implementation, and refinement.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003cp\u003eStructurally, environmental instruments maintain a dominant position throughout most of the period, consistent with China\u0026rsquo;s broader emphasis on business-environment reforms and institutional upgrading. Supply-side instruments, however, display a marked expansion after 2019 and temporarily surpass environmental instruments in 2021, indicating a stronger strategic focus on factor provision, R\u0026amp;D platforms, and financing during the intensive support phase. Demand-side instruments remain marginal over the entire period, and their sub-types show little diversification: basic forms of priority government procurement and channel development are used, while more sophisticated tools such as service outsourcing and overseas expansion remain rare.\u003c/p\u003e \u003cp\u003eAt the sub-instrument level (see Fig.\u0026nbsp;\u003cspan refid=\"Fig4\" class=\"InternalRef\"\u003e4\u003c/span\u003e), public services, goal-setting and strategic planning, and financial support show the most pronounced increases in recent years. For example, public-service instruments expand rapidly after 2020 and peak in 2021, reflecting intensified efforts to build platforms, infrastructure, and service systems for S\u0026amp;S SMEs. Financial support instruments also expand steadily, in line with international evidence on the importance of credit support and guarantees for SME resilience in crisis periods. In contrast, critical incentive instruments such as intellectual property protection, tax incentives, and talent recruitment and cultivation grow more slowly and remain relatively under-represented overall, signaling persistent gaps in the long-term innovation-incentive and human-capital pillars of the ecosystem.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003cp\u003eIn sum, while the S\u0026amp;S SME policy mix has become richer and more active over time\u0026mdash;particularly in environmental and supply-side domains\u0026mdash;it still suffers from structural imbalances, weak demand-side development, and insufficient embedding of life-cycle and chain-resilience considerations in instrument design and adjustment.\u003c/p\u003e \u003c/div\u003e"},{"header":"5 Conclusions and policy implications","content":"\u003cdiv id=\"Sec18\"\u003e\n \u003ch2\u003e5.1 Main findings\u003c/h2\u003e\n \u003cp\u003eDrawing upon a longitudinal content and quantitative analysis of 60 national-level policy documents spanning from 2011 to 2024, this study delineates four principal structural deficiencies within China\u0026rsquo;s policy framework for science and technology small and medium-sized enterprises (S\u0026amp;T SMEs).\u003c/p\u003e\n \u003cp\u003eFirstly, the policy mix reveals an \u0026ldquo;imbalanced promotion\u0026ndash;pull\u0026rdquo; configuration. Specifically, environmental and supply-side policy instruments collectively constitute over 94% of all referenced instruments, whereas demand-side instruments remain marginal. This arrangement emphasizes institutional development and factor provision but provides insufficient leverage at the market and value-chain levels. Consequently, it impedes the effective translation of technological innovations into sustained sales and niche market positions, thereby undermining the establishment of a comprehensive cycle from \u0026ldquo;innovation\u0026rdquo; to \u0026ldquo;commercialization.\u0026rdquo;\u003c/p\u003e\n \u003cp\u003eSecondly, internal coordination among instrument subsystems is notably weak, and functional gaps persist. Within supply-side instruments, there is a pronounced bias toward financial support and information services, with comparatively limited focus on talent cultivation and the enhancement of deep innovation capabilities. Environmental instruments predominantly address public services and planning, rather than robust rights-based or fiscal incentives. Demand-side instruments are largely confined to basic channel development and procurement mechanisms, with more sophisticated approaches such as outsourcing and internationalization support conspicuously absent. These tendencies exacerbate fragmentation and hinder synergistic interactions across different policy instruments.\u003c/p\u003e\n \u003cp\u003eThirdly, the policy-objective system exhibits discontinuities in phase linkage and insufficient process-oriented support. The alignment between instruments and objectives is primarily concentrated on improving quality, efficiency, and innovation-driven development, while aspects such as graded growth and industrial chain strengthening receive comparatively scant attention. As a result, support for critical life-cycle transitions\u0026mdash;including start-up, scaling, and upgrading phases\u0026mdash;and for enhancing resilience at key chain nodes, such as bottleneck links and core components, remains incomplete. This gap is particularly significant given the importance of these factors in fostering robust niche champions and hidden-champion enterprises.\u003c/p\u003e\n \u003cp\u003eFourthly, the operational effectiveness of numerous policy provisions is constrained, and implementation capacity requires enhancement. Many clauses are characterized by abstract language, lack quantitative targets and procedural specificity, and omit clear criteria for application, evaluation methodologies, and coordination mechanisms. Such deficiencies increase uncertainty and compliance costs for enterprises and intermediaries, thereby elevating the risk of policy inertia or inconsistent enforcement across governmental departments.\u003c/p\u003e\n\u003c/div\u003e\n\u003cdiv id=\"Sec19\"\u003e\n \u003ch2\u003e5.2 Optimization Paths\u003c/h2\u003e\n \u003cp\u003eIn view of these findings, four interconnected pathways for optimization are proposed to improve the efficacy of China\u0026rsquo;s Science and Technology (S\u0026amp;T) Small and Medium-sized Enterprise (SME) policy framework and to reinforce its function as a state-coordinated system for nurturing niche market leaders.\u003c/p\u003e\n \u003cp\u003e(1) Rebalancing and Coordinating the Policy Mix\u003c/p\u003e\n \u003cp\u003eThe current predominance of environmental and supply-side policy instruments should be supplemented by a more proactive and diversified set of demand-side tools. For instance, policymakers might establish dedicated funds to support the internationalization of S\u0026amp;T SMEs, integrating overseas research and development (R\u0026amp;D) and service-node assistance with export-linked, tiered subsidies to promote sustained engagement in global value chains. Government procurement priorities could be enhanced by developing a prioritized catalogue of innovative S\u0026amp;T SME products, setting minimum procurement quotas, and linking procurement performance to the evaluation of purchasing agencies. In the domain of service outsourcing, institutionalizing mechanisms such as \u0026ldquo;unveiling the list and taking command\u0026rdquo; could convert national strategic demands into competitive R\u0026amp;D and solution contracts for S\u0026amp;T SMEs. These initiatives would facilitate a transition from a predominantly supply-driven approach toward a more balanced, market-responsive policy mix.\u003c/p\u003e\n \u003cp\u003e(2) Strengthening Subsystem Complementarities\u003c/p\u003e\n \u003cp\u003eWithin each policy instrument subsystem, internal complementarities should be reinforced to address existing functional deficiencies. On the supply side, greater emphasis could be placed on talent acquisition and development as well as on cultivating advanced innovation capabilities, for example through collaborative training programs involving universities, research institutes, and S\u0026amp;T SMEs, alongside targeted skill enhancement initiatives aligned with niche champion development trajectories. On the environmental side, enhancing comprehensive intellectual property services and enforcement, coupled with refining R\u0026amp;D-focused tax incentives, would establish more robust and sustainable innovation incentives. On the demand side, implementing risk-compensation schemes for technology outsourcing and insurance subsidy programs to support overseas market exploration would enable S\u0026amp;T SMEs to leverage external contracts and global opportunities as catalysts for upgrading.\u003c/p\u003e\n \u003cp\u003e(3) Embedding Dynamic, Objective-Oriented Alignment\u003c/p\u003e\n \u003cp\u003eTo rectify misalignments between policy instruments and their intended objectives, it is essential to institute a dynamic, goal-oriented evaluation and adjustment mechanism. This entails developing metrics and indicators capable of tracking how various combinations of instruments contribute to graded growth, value chain strengthening, innovation, integration, and efficiency goals, with periodic recalibration of instrument priorities based on empirical outcomes. Practically, policymakers could design modular \u0026ldquo;instrument packages\u0026rdquo; tailored to each core objective\u0026mdash;such as an innovation-driven package that integrates science and technology support, talent initiatives, and tax incentives\u0026mdash;and enable firms at different developmental stages to apply for customized packages through a unified platform. Regular feedback loops and performance assessments would then inform the ongoing refinement of both the packages and their underlying objectives.\u003c/p\u003e\u003cspan\u003e\n \u003cp\u003e(4) Strengthening Implementation Regulations and Governance Capacity\u003c/p\u003e\n \u003c/span\u003e\n \u003cp\u003eFinally, it is imperative to enhance the clarity and enforceability of policy provisions while simultaneously bolstering implementation capacity. Supplementary documentation should delineate specific application criteria, funding limits, evaluation metrics, and review schedules for critical instruments such as fiscal subsidies and tax incentives. Additionally, the deployment of digital platforms to centralize application processes and monitoring can alleviate administrative burdens faced by small and medium-sized enterprises (SMEs) in the sustainability sector. The establishment of independent, third-party evaluations assessing policy execution\u0026mdash;including fund utilization, beneficiary satisfaction, and achievement of objectives\u0026mdash;and the integration of these findings into future resource allocation decisions would facilitate a comprehensive policy feedback loop from formulation to refinement. Collectively, these measures would enable the Chinese government to function more effectively as an orchestrator of the innovation ecosystem, harmonizing policy instruments, goals, and stakeholder behaviors to promote the sustainable development of niche champions.\u003c/p\u003e\n\u003c/div\u003e"},{"header":"6 Discussion and limitations","content":"\u003cp\u003eThis research conceptualizes China\u0026rsquo;s Specialized and Sophisticated SME (S\u0026amp;S SME) program as a state-directed policy mix aimed at fostering niche champions, and assesses the alignment between policy instruments and objectives from 2011 to 2024. The results indicate that although the policy mix has become more diverse and proactive, it remains structurally imbalanced. Specifically, environmental and supply-side instruments predominate, while demand-side instruments are underdeveloped. Additionally, process-oriented goals, such as phased growth and industrial-chain resilience, receive comparatively limited support. Situated within the broader literature on SMEs and innovation policy, these findings corroborate that policy instrument portfolios in emerging economies tend to gravitate towards factor provision and institutional signaling, yet face challenges in establishing robust demand-side and value-chain mechanisms essential for firms resembling hidden champions.\u003c/p\u003e \u003cp\u003eThis study contributes to scholarly debates on policy mixes, ecosystem orchestration, and SME development in three key ways. First, it advances theories of instrument choice and policy mixes by explicitly linking policy instruments to an empirically derived, multidimensional objective framework for S\u0026amp;S SMEs, demonstrating how misalignments at various levels influence the overall efficacy of the policy mix. Second, it conceptualizes the Chinese state as an ecosystem orchestrator, illustrating that orchestration is constrained not only by resource availability and authority but also by the coherence, timing, and complementarities of instruments across supply-side, environmental, and demand-side subsystems. Third, it underscores that nurturing niche-champion SMEs necessitates sustained, life-cycle-sensitive support that integrates capability development with market access and value-chain positioning, aligning with international evidence on the institutional foundations of Mittelstand and hidden champions.\u003c/p\u003e \u003cp\u003eDespite these contributions, the study acknowledges several limitations that suggest avenues for future research. First, the analysis is based on national-level Chinese policy documents and does not capture variations in local implementation or region-specific policy innovations, which can be significant within China\u0026rsquo;s multi-tiered governance structure. Future research could incorporate provincial and municipal policies and combine textual analysis with administrative or survey data to examine how instrument\u0026ndash;objective alignment varies across regions and sectors. Second, the study focuses on the design and evolution of the policy mix without directly measuring firm-level outcomes such as innovation performance, export upgrading, or survival, which would enable causal inference regarding policy impacts. Integrating the instrument\u0026ndash;objective framework with firm-level microdata and leveraging staggered policy introductions or quasi-experimental designs would be a fruitful direction for subsequent studies. Third, the analysis primarily treats the state as the central orchestrator and does not fully explore the roles of intermediaries, large enterprises, financial institutions, and universities in participating in or contesting orchestration within the ecosystem. Qualitative case studies of specific industrial value chains or regional ecosystems could enrich understanding of multi-actor, multi-level orchestration processes involved in cultivating niche champions.\u003c/p\u003e"},{"header":"Declarations","content":"\u003ch2\u003eAuthor Contribution\u003c/h2\u003e\u003cp\u003eZ: Conception and Interpretation of data;L: Refine concept and Write the main manuscript;Both are jointly reviewing the manuscript.\u003c/p\u003e\u003ch2\u003eAcknowledgement\u003c/h2\u003e\u003cp\u003eThis research was supported by a project funded by the Key Research Centre for High-Quality Philosophy and Social Sciences in Zhejiang Province \u0026mdash; the Research Centre for Digital Innovation and Global Value Chain Upgrading at Zhejiang Gongshang University (Grant No. SQP2025-004).\u003c/p\u003e\u003ch2\u003eData Availability\u003c/h2\u003e\u003cp\u003eThe original data is collected from the public released documents at China government website.\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\u003cli\u003e\u003cspan\u003eAyyagari, M., Demirg\u0026uuml;\u0026ccedil;-Kunt, A., \u0026amp; Maksimovic, V. 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Sustainable Production and Consumption, 30, 815\u0026ndash;828. \u003cspan class=\"ExternalRef\"\u003e\u003cspan class=\"RefSource\"\u003ehttps://doi.org/10.1016/j.spc.2022.01.017\u003c/span\u003e\u003cspan address=\"10.1016/j.spc.2022.01.017\" targettype=\"DOI\" class=\"RefTarget\"\u003e\u003c/span\u003e\u003c/span\u003e\u003c/span\u003e\u003c/li\u003e\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Policy Mix, Policy Evaluation, Specialized and Sophisticated SMEs (S\u0026S SMEs), Niche Champions, State Orchestration, Strategic Coordinator","lastPublishedDoi":"10.21203/rs.3.rs-8571005/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8571005/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis study examines how the Chinese government, as a strategic coordinator, designs and implements a policy mix to cultivate Specialized and Sophisticated Small and Medium Enterprises (S\u0026amp;S SMEs), often labelled “niche champions” because of their deep specialization in narrow market segments. Drawing on content analysis of 60 national‑level policy documents issued between 2011 and 2024, the article evaluates the structural characteristics, temporal evolution, and instrument–objective alignment of China’s S\u0026amp;S SME policy mix, with particular attention to resource coordination, market‑environment shaping, and demand stimulation. The analysis reveals a pronounced structural imbalance, with environmental and supply‑side instruments dominating and demand‑side instruments remaining marginal, limited cross‑instrument synergies, and weak support for process‑oriented objectives such as staged firm growth and industrial‑chain resilience. The article argues that this configuration constrains the transformation of technological breakthroughs into stable market positions and undermines the cultivation of S\u0026amp;S SMEs as robust niche champions. To enhance policy effectiveness, the study proposes rebalancing the policy mix, strengthening cross‑instrument coordination, and refining implementation mechanisms to improve instrument–objective alignment across firm life‑cycle stages and value‑chain nodes. The findings contribute to research on state‑led SME development and policy mixes in emerging economies, and offer practical insights for countries seeking to build their own layers of highly specialized, globally competitive SMEs analogous to the German Mittelstand and “hidden champions.”\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eJEL Classification\u003c/strong\u003e L26 • L53 • O25 • H11\u003c/p\u003e","manuscriptTitle":"State-Led Cultivation of Niche Champions: An Evaluation of China’s Policy Mix for Specialized and Sophisticated SMEs (2011–2024)","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2026-04-21 18:47:01","doi":"10.21203/rs.3.rs-8571005/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"d2ee73ec-83c9-4b1d-982b-13afc188e107","owner":[],"postedDate":"April 21st, 2026","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[],"tags":[],"updatedAt":"2026-04-21T18:47:02+00:00","versionOfRecord":[],"versionCreatedAt":"2026-04-21 18:47:01","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-8571005","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-8571005","identity":"rs-8571005","version":["v1"]},"buildId":"XKTyCvWXoU3ODBz1xrDgd","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}