Rise of China’s Manufacturing HiddenChampions: A Resource AllocationPerspective——An Explorative Case Study of Hailiya Group

Shan Yu*, Chen Jinlong

School of Business Administration, Dongbei University of Finance and Economics， Dalian, China

Abstract: Hidden champions play a critical role in China’s efforts to overcometechnological and industrial “chokepoints”. These enterprises are pivotal for breakingfree from Western technological embargoes, avoiding entrapment in low-value-addedproduction, and driving industrial upgrading. Given the distinct market environment in whichChina’s hidden champions have emerged, it is both timely and practically significant to examinetheir growth trajectories and underlying mechanisms. This study adopts a resource allocationperspective to investigate the development path of Chinese manufacturing enterprises intohidden champions, using a vertical case study of Hailiya Group. The findings reveal that suchenterprises achieve hidden champion status by vertically concentrating on niche marketswhile harnessing technological potential and horizontally diversifying their technologyapplication scenarios. Their growth follows a “T-shaped” strategy, combining verticalspecialization in a focused market with horizontal expansion into new applications. Four criticalmechanisms underpin the rise of manufacturing hidden champions: market niche positioning,innovation-driven focus, application scenario expansion, and ecosystem development.Specifically, these enterprises strategically target niche markets, establish a technologyorientedcompetitive edge, broaden technology applications to unlock new profit opportunities,and develop collaborative ecosystems to share resources and drive industrial advancement. Thispaper not only extends the interpretive boundaries of resource allocation theory but alsooffers fresh insights into the emergence of Chinese manufacturing enterprises as hiddenchampions, enriching our understanding of their unique growth dynamics.

Keywords: Hidden champions; resource allocation; innovation assets; customer assets;

JEL Classification Codes: M10, O14

DOI: 10.19602/j.chinaeconomist.2025.01.04