A recent survey conducted by CPA Australia, a leading global accounting organization, indicates a significant uptick in growth expectations among Mainland Chinese small businesses. This surge in optimism suggests a promising trajectory for economic recovery and job creation in the region following the challenges posed by the pandemic.
The CPA Australia Asia-Pacific Small Business Survey 2023-24, focusing on Mainland China, reveals compelling insights into the evolving landscape of small enterprises in the country.
Optimistic growth outlook
A notable 59% of Mainland Chinese small businesses anticipate growth in 2024, surpassing previous survey results. Furthermore, 43% of these businesses express intentions to expand their workforce, marking the highest figure since 2020.
Mr. Lloyd Peng, President of CPA Australia’s North China Committee, interprets this trend as a positive indication of restored confidence among small business owners. He notes that such optimism often translates into increased hiring, signifying a favorable business environment.
Reflecting the improved expectations, Mainland Chinese small businesses are proactively embracing innovation as a means of sustainable growth. Approximately 86% of respondents plan to introduce new products or services in 2024, reflecting a strategic focus on enhancing value creation. Mr. Peng added: “This upgrading of capacity and strong focus on innovation helps to explain why small businesses expect to create more positions.”
“It’s important that stimulus policies to support private enterprises be continuously and consistently implemented this year. This should further ease the financial burden on small businesses, encourage further innovation and support overseas expansion amidst global uncertainties. For example, the targeted tax incentives such as “Six Taxes and Two Fees” reduction and exemption policies, improving market access, boosting intellectual property protections and supporting domestic consumption.”
Embracing technologies
While challenges such as rising costs, heightened competition, and increasing interest rates persist, Mainland Chinese small businesses are responding by investing in cutting-edge technologies to enhance efficiency and mitigate expenses.
Notably, Mainland Chinese small businesses lead the Asia-Pacific region in investing in advanced technologies like artificial intelligence (AI), enterprise resource planning (ERP) software, and business intelligence software, demonstrating a commitment to digital transformation.
CPA Australia’s East and Central China Committee President Mr Raymond Zhu said: “Supportive policies, along with mature technology solutions in the market such as Artificial intelligence-as-a-Service (AIaaS) and leading digital infrastructure like 3.64 million 5G base stations in Mainland China, provide a strong foundation for small businesses to digitalise. Relying on these AI tools and solutions, they can make business decisions, develop data-driven strategies, reduce costs, and even revolutionise the traditional operational models.
“We recommend that Mainland Chinese small businesses enhance their cyber security and compliance management as part of their embracing of the AI era.”
To support their technological endeavors and expansion plans, 90% of Mainland Chinese small businesses intend to seek external funding in 2024, with growth being the primary driver for seeking such funds.
Adopting green and sustainable practices
An overwhelming majority (93%) of Mainland Chinese small businesses are also actively engaged in environmental, social, and governance (ESG) activities, positioning themselves as leaders in green and sustainable finance initiatives.
CPA Australia’s South China Committee Member Mr William Huang said: “”Given Mainland China’s commitment to reach carbon neutrality before 2060, there are likely to be an increasing number of green and sustainable finance opportunities in the market to support the green transition of businesses. These opportunities include but are not limited to government subsidies and grants, green loans and green guarantees. Small businesses should leverage such support to upgrade facilities or introduce new equipment as part of embedding sustainability into their operating model.”
“To improve access to green and sustainable finance opportunities, we recommend small businesses start setting their low-carbon transition strategy and spend more time and resources on sustainability.”
In conclusion
The CPA Australia survey underscores the resilience and adaptability of Mainland Chinese small businesses in navigating challenges and capitalizing on opportunities for growth and innovation.
The survey collected responses from 4,222 small businesses across Mainland China and other Asia-Pacific markets, with 753 from Mainland China. These responses provide valuable insights into the prevailing trends and dynamics shaping the region’s business landscape.
