China's top industry regulator said it has confidence in maintaining a stable industrial economy next year, despite headwinds including rising commodity prices and challenges in supply chains.

Xiao Yaqing, minister of industry and information technology, said stabilizing industrial growth will be the ministry's top priority in 2022, and it will ratchet up the resources to boost the manufacturing sector's innovation capabilities.

During the January-November period, industrial output, a key economic indicator, rose by 10.1 percent year-on-year, which was better than expected, Xiao said in an interview with Xinhua News Agency.

According to him, the long-term positive fundamentals of China's industrial economy and the overall trend of recovering growth have not changed. The nation's effective COVID-19 prevention measures will also help it maintain smooth industrial growth.

But there is still a gap between the comprehensive competitiveness of China's manufacturing industry and that of the world-class level. Therefore, the ministry will step up the push to strengthen industrial foundations and promote the high-quality development of the manufacturing sector, Xiao added.

Specifically, the ministry said more national manufacturing innovation centers will be set up to achieve breakthroughs in core technologies.

So far, 21 such innovation centers have been established across China, covering areas including semiconductors and intelligent sensors.

Zhang Yuxian, director of the department of economic forecasting at the State Information Center, said earlier that to remove hindrances to industrial upgrading and development, the industrial foundations need to be consolidated and weak links strengthened.

According to the ministry, it also aims next year to help cultivate about 3,000 "little giant" companies that focus on a market niche and master key technologies with a strong innovation capacity.

The plan is part of the ministry's broader push to trigger creativity across small and medium-sized enterprises and foster a better business environment for them.

China aims to cultivate 1 million innovative SMEs by 2025, according to a government guideline on the development of SMEs during the 14th Five-Year Plan (2021-25) period.

"For China, innovation capabilities and well-rounded supply chains have played an increasingly prominent role during its economic development," said Li Chao, chief economist of Zheshang Securities, a Chinese securities company.

"The 'little giant' companies, which are able to fill in certain weak niches for the country, will help improve the industry and supply chains, and enable China to become a manufacturing powerhouse."

A report from CITIC Securities found that listed "little giant" companies have outperformed other types of companies in terms of revenue growth and potential profitability. The former will likely become the future hidden champions like those in Germany, and might even go on to make big contributions to the nation's manufacturing sector.