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.

Download CPA Australia
Asia-Pacific Small Business Survey 2020-21 (English
only)