The latest figures released by the General Administration of Customs confirm that China's foreign trade maintained robust momentum in the first five months of this year. The total value of goods imports and exports reached 17.94 trillion yuan ($2.5 trillion), up 2.5 percent year-on-year, with exports growing by 7.2 percent. Notably, private enterprises accounted for 10.25 trillion yuan of the trade volume, representing 57.1 percent of the total and an increase of 2.4 percentage points compared with the same period last year.

Such achievements are the culmination of decades of reform and opening-up, which have fostered the flourishing of private enterprises across diverse industries. In China, there is a saying: "Private enterprises contribute over 50 percent of the country's taxes, more than 60 percent of GDP, 70 percent of technological innovation, 80 percent of urban employment, and 90 percent of market entities." These contributions stem from years of opening-up, which allowed private businesses to flourish. With dedication and hard work, they have built the success we see today.

Private enterprises in China are diverse, spanning industries and offering products and services to the world. For many, their first encounter with Chinese products is through affordable, everyday items. In Zhejiang province's Yiwu, the largest wholesale market for small commodities, Yiwu International Trade City offers everything from trinkets to daily essentials. With over 70,000 vendors, walking through this vast marketplace would take over a year if you spent just a few minutes in each shop. Buyers from across the globe flock here, sourcing goods that are often produced by China's private enterprises.

Yet Chinese private enterprises have long outgrown the small commodity market. Today, they are shifting to higher-end industries. Take the home appliance sector, where companies like Midea and Gree have become household names.

In recent years, Chinese private enterprises have focused on technological innovation, entering higher-value sectors and striving for greater global recognition. DJI, based in Shenzhen, Guangdong province, controls more than 70 percent of the global consumer drone market, operating in over 100 countries. Though founded in 2006, it has become a global leader in less than 20 years. Similarly, China's tech giants — many of them private companies — dominate sectors such as e-commerce (Alibaba, JD.com, Pinduoduo), social media (Tencent, ByteDance), and fintech (Ant Financial, Tencent Financial). These companies are not just serving China; they are providing cutting-edge services to the world and delivering significant returns to global investors.

But what is behind this success? The answer is multifaceted, but a few factors stand out. Above all, China's enormous domestic market has allowed enterprises to experiment and scale rapidly. The country's educational system turns out highly skilled technical and managerial talent, while an improved workforce has embraced new technologies with remarkable speed. Furthermore, traditional Chinese values — hard work, frugality, and perseverance — have fostered an entrepreneurial spirit.

On top of this, market reforms have injected dynamism into the economy, creating space for private entrepreneurs to thrive. These entrepreneurs are bold, willing to take risks and quick to seize opportunities. These traits have shaped private enterprises into flexible and agile organizations capable of responding swiftly to changing market dynamics.

Today, China's private enterprises are major players in the global economy. Some regions have even developed specialized industrial clusters. Consider Zhuji in Zhejiang province, where at peak local companies made 25 billion pairs of socks annually, accounting for one-third of the global supply. In Shaodong city, Hunan province, over 15 billion lighters are produced each year, securing a 70 percent global market share. In Hangji township of Yangzhou city, Jiangsu province, the town manufactures 7.5 billion toothbrushes annually, dominating 80 percent of China's toothbrush market and 90 percent of its toothbrush exports, while capturing 30 percent of the global hotel toiletries market.

However, success doesn't come without challenges. This phenomenon of the so-called "strongest towns" — or rather, the emergence of vertically diversified agglomerations and industrial clusters — has indeed contributed to economic development and export growth. However, studies have also found that excessive specialization and clustering may lead to intensified competition and congestion, thereby weakening firms' bargaining power and undermining the sustained growth of export-oriented enterprises. This may well reflect the current challenges faced by some Chinese private enterprises in their growth trajectory. Many of China's private enterprises struggle with low product competitiveness and limited value-added content. As international markets become saturated, protectionism rises and competition from other developing countries intensifies, these companies face a crossroads. The way forward is clear: move beyond low-cost competition and embrace technological innovation and branding. This shift won't be easy, but the very qualities that fueled their rise — resilience, innovation and adaptability — will drive their transformation.

Over the past few decades, China's private enterprises have not only delivered high-quality products and services to the world but also brought substantial returns to international investors and provided many job opportunities. Looking ahead, they face new challenges and opportunities. To maintain their upward trajectory, they must innovate further, adapt to economic transformations, and continue contributing to shared prosperity for both China and the world.

The author is an associate professor at the School of International Trade and Economics, Central University of Finance and Economics.

The views don't necessarily reflect those of China Daily.

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