Hidden Champions in the Chinese Century

The phrase “Hidden Champions” originated in 1987, when academics considered the reasons for Germany’s global dominance of exports.

Large German enterprises have been active internationally since the 1800s. That’s one reason researchers in the late 1980s attributed Germany’s export strength to its major corporations, then including Bayer and Volkswagen. However, a closer study led to the discovery that small and midsize companies – the Mittelstand – contribute significantly to Germany’s exports. The public was largely unaware of these “hidden” companies, but many of them lead their international markets, thus earning the title “champions.”

In the decades since the late 80s, China and the United States eclipsed Germany in absolute export volume, though Germany still leads in exports per capita.

Generally, a country’s export success correlates with its number of large companies. Yet China, the leader in absolute exports, and Germany, the leader in per capita exports, are both exceptions. Midsize companies generate more than 60% of China’s exports, comparable to the contributions Germany’s Mittelstand ...