Fujian should speed up the transformation and upgrading of its industry to encourage companies to innovate and develop new businesses, said You Quan, Party secretary of Fujian province.

His call was echoed by Chen Xin, a professor from Party school of Fujian province, who said that under China's supply-side structural reforms, companies must improve their production, moving from lower to higher levels of output quality. This, he said, would enable suppliers to meet the ever-changing needs of increasingly sophisticated consumers.

The establishment by Yonghui Superstores of its Yonghui Super Species chain, catering to middle class consumers, has been given by analysts as a typical successful example of China's supply-side reforms.

Yonghui Superstores has proved agile at rolling out new business models to sustain market share and meet the challenges thrown down by its online rivals.

Known for its massive 5,000-square-meter hypermarkets, the company launched Super Species, a smaller-sized supermarket brand, in its home city of Fuzhou in Fujian province.

The 500-square-meter stores target middle class consumers that like to combine shopping with dining. Customers choose their favorite foods, such as salmon or prime beef, which are cooked in store. Wine is also available at the store.

"It's my first time here. I feel the seafood is very fresh and delicious. And the price is moderate," a customer said.

Ji Changsheng, Fuzhou area manager of Yonghui Super Species said that by resorting to its managing experience of supply-side reforms, Yonghui had developed this innovative chain of stores, which responded better to market trends and met the needs of younger consumers, in particular.

As an emerging business, Yonghui Super Species is fully exploiting its market potential through its transformation and upgrading. The first store opened in January. It sold 1,000 whole salmon fish in the first 45 days since its opening. In 2017, Yonghui Superstores hopes to open up to 50 Super Species stores.

Currently, China's economy is experiencing medium to high levels of growth, as it enters its New Normal phase, said Wang Kaiming, an analyst at the Development Research Center of the Fujian Provincial Government.

"It is commendable that most private companies remain in the real economy," according to Wang.

Wang added that companies engaged in the real economy in Fujian were enhancing their capabilities in independent innovation, amid the supply-side structural reform initiative.

Wang said that the innovation taking place was not only technological innovation but also institutional innovation - including improving business management systems, and staff administration systems.

An analyst said that another successful example of innovation was state-owned enterprise Fujian Electronics and Information (Group) Co, which is proactively innovating to adapt to increasingly internationalizing global markets.

Fuzhou Sinoregal Co, an information technology enterprise, specializing in IT databases, cloud computing and big data, was founded by Fujian Electronics and Information (Group) Co and a founding team from Taiwan.

Fujian Electronics and Information (Group) Co owns 51 percent of Sinoregal, while the Taiwan team owns 49 percent.

With the support from Fujian Electronics and Information (Group) Co and experts from Taiwan, Sinoregal has founded joint ventures with Hitachi, Epson and LG and developed into a leading information technology company in Fujian.

It has also created more than 100,000 new jobs and driven the upgrading and transforming of Fujian's information technology industry.

Analysts said that thanks to its supply side reforms, Fujian had become an excellent example to industry in China.

In first six months of 2017, the operating revenue of the province's 17 State-owned enterprises totaled 131.94 billion yuan ($20.04 billion), experiencing year-on-year growth of 24.4 percent.

Total first half profit hit 150 million yuan, surging 47.2 percent over the previous year, according to statistics issued by the State-owned Assets Supervision and Administration Commission of Fujian province.

(China Daily 10/18/2017 page24)