CPA Australia: Mainland Chinese small businesses show strong confidence in growth
- Most Mainland Chinese small businesses have or expect to recover from COVID-19 in 2021.
- Sixty-four per cent of small businesses expect their revenue to grow in 2021.
- Forty-two per cent of small business expect to increase employee headcount in 2021.
BEIJING, CHINA - Media OutReach - 16 April 2021 - The small business sector in Mainland China is showing strong signs of confidence. Sixty-four per cent of small businesses expect their revenue to grow and forty-two per cent expect to increase their employee numbers in 2021.
These results are part of CPA Australia's 2020-21 Asia-Pacific Small Business Survey, published today. The survey canvasses the views of 4,227 small businesses in 11 markets across the Asia-Pacific region, including India, Singapore and Vietnam, to understand their business strategies and outlook. Seven hundred and seventy-nine Mainland Chinese small businesses took part.
COVID-19 is not expected to be a major barrier for many Mainland Chinese small businesses in 2021. Fifty-one per cent have already recovered from the negative impacts of the pandemic or expect to recover in 2021, the second highest result among the markets surveyed.
"The successful implementation of control measures to mitigate the health and economic impacts of the pandemic translated into Mainland China's small businesses enjoying a relatively positive 2020," said Mr.Justin Qiu, President of CPA Australia's North China Committee.
"While there was an understandable fall in the number of small businesses that grew in 2020, 83 per cent of surveyed Mainland Chinese businesses grew or stayed the same last year, the best result of the markets surveyed.
"A strong emphasis on innovation and technology means that Mainland Chinese small businesses are well-prepared for growth. For three consecutive years, small businesses from Mainland China have been the leaders in earning revenue from online sales, using new digital or mobile payment technologies and using social media for business purposes."
In 2020, 82 per cent of surveyed Mainland Chinese small businesses earned over ten per cent of their revenue from online sales. Meanwhile, 91 per cent generated more than ten per cent of their sales through new payment technologies and 94 per cent used social media in 2020. The survey results show that these activities are strongly associated with high growth businesses.
"With the survey showing e-commerce growing across the region, there are excellent opportunities for Mainland Chinese small businesses to use their online expertise to diversify their exports and tap into new markets," Qiu said.
Small businesses in Mainland China found 'government support and incentives' to be the second most positive influence on their business after 'customer loyalty' in 2020. Twenty-four per cent of small businesses sought government support and subsidies in response to COVID-19.
"The results show that government relief measures to help small businesses in 2020 had a strong positive influence on many small businesses. This highlights the important role governments can play in supporting small businesses in difficult times," said Kevin Ng, member of CPA Australia's North China Committee.
Although 'increasing costs', 'cash flow difficulties' and 'increasing competition' were identified as key barriers to growth, 48 per cent of Mainland Chinese small businesses expect to seek external finance for business growth this year, up from the 43 per cent last year. These results reflect strong expectations for a rebound in 2021.
"The measures and incentives recently announced in the Government Work Report 2021 should provide further support to businesses facing challenges such as financing constraints, and position them for future expansion," Ng said.
"These measures, including tax cuts, fees reduction, raising the VAT threshold for small businesses, and increasing the tax deduction on research and development expenses, will not only help reduce the financial burden on small businesses but also spur additional investment into innovation and technology.
"Together with the resilient nature of small businesses in Mainland China, these measures are likely to lead to a rebound in business growth in 2021," Ng said.
CPA Australia recommends the following key measures for small businesses in Mainland China:
- Keep up to date with government announcements on support and incentives for business.
- Identify, review and implement digital technologies to improve performance and save costs.
- Strike a balance between short-term cash flow management and longer-term investment in new technologies and upskilling employees.
- Review and utilise existing business data to seek innovations in areas such as products and services, customer experience and business operations.
- Seek professional advice to maximise success, including in obtaining external finance.
- Explore opportunities to diversify and expand into new markets, especially into Tier 2 and Tier 3 cities in mainland China and ASEAN countries.
DownloadCPA Australia Asia-Pacific Small Business Survey 2020-21(English only)
About CPA Australia
CPA Australia is one of the largest professional accounting bodies in the world, with more than 168,000 members in over 100 countries and regions, including more than 20,000 members in Greater China. We have offices in Beijing, Shanghai and Guangzhou. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au