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BEIJING, CHINA - Media OutReach - 10 April 2019 -China's small businesses are cautiouslyoptimistic amid anticipated global economic downtrend in 2019, according to asurvey conducted by CPA Australia, one of the world's largest accounting bodies.
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CPA Australia Asia Pacific Small BusinessSurvey 2018 Beijing media gathering from left Derek Chan President of Nortch China Committee and Kevin Ng Member of North China Committee
The findings from CPA Australia's10th annual Asia-Pacific Small Business Survey, follow extensivesurveying of more than 3,600 small business operators in ten markets, includingAustralia, Mainland China, Indonesia, Malaysia and the Philippines.
Over 70 per cent of smallbusinesses from China expect to grow in 2019 and over 50 per cent of thebusinesses expect to increase their workforce this year. With global economicuncertainty and slowing global growth, this result reflects positively on thecapabilities and resilience of China's small business sector.
Derek Chan, President of CPA AustraliaNorth China Committee says that conditions for small businesses were slightlyweaker across the Asia Pacific in 2018.
"Overall, 2 per cent fewerrespondents reported that they grew in 2018 than 2017. For Mainland China, theresult bettered the survey average, with 74 per cent of Mainland China's smallbusinesses stating that they grew in 2018 compared to the survey average of 66per cent.
"The positive small business conditions look set to continue into 2019,with 71 per cent of small businesses from Mainland China expecting to grow,however expectations are down from 2018, when 78 per cent expected to grow.
"Global trade tensions appear to be the primary reason for ageneral weakening in confidence. The survey average for the Asia-Pacific showsthat small businesses are more likely to expect that trade tensions will have anegative impact on their business than a positive impact.
"However, there are many positivesto take from the survey results. For example, small business confidence is thestrongest in the Philippines, Vietnam, and Indonesia. With fast growinglocal economies, it is not surprising that small business confidence in thosemarkets is relatively higher. There are many opportunities for small businessesin mainland China to diversify their markets and reduce their risks bycollaborating with these emerging markets along the Belt and Road, where thereis growing interest in developing innovation-driven and knowledge-basedeconomies.
"Another positive factor is thedigital capability and innovative culture of mainland China's small businesssector, with the survey showing that there is a solid link between developmentof digital tools and strong business growth. Driven by the Government'sinnovation development strategy, small businesses in mainland China are moremotivated to innovate than their counterparts in other surveyed markets. Over30 per cent of small businesses from mainland China found that the introductionof a new product or service is a key driver of their growth."
In addition, China has introduced aseries of tax reforms since 2018 and a further reduction in taxes and otherlevies will be implemented in 2019 in order to encourage further small businessgrowth.
Kevin Ng, member of CPA AustraliaNorth China Committee, highlights the importance of tax reforms to smallbusinesses in mainland China.
"Increasing costs are one of themost significant barriers to small business in mainland China, with over 33 percent of businesses identifying it as the key challenge for them in 2018. We believethe government's further tax cut, together with other measures that will beimplemented this year, will help to reduce their cost burden and sharpen theircompetitiveness in the region. This will stimulate the growth of the broaderbusiness sector. The deeper VAT reforms commencing on April 1, will furtherrelieve the pressure on small businesses and boost economic activity," Mr Ngsays.
The survey also found that among ten surveyed markets in theAsia-Pacific, Mainland China's small businesses expect easy access to finance in 2019, with 34 per cent ofbusinesses expecting that access to finance will be "easy" or "very easy". Thispercentage is higher than the Asia-Pacific average of 23 per cent.
"The recent announcements in the "TwoSessions" on increasing the availability of finance for small businesses istimely and will further improve small business access the financing they needto support growth and make further investments in technology.
"In addition, considering the high proportion of small businesses frommainland China that sell online and utilise other digital technologies, thereare opportunities for reputable financial institutions to apply FinTech and bigdata analysis to make it easier for small business to access finance," Mr Chanstated.
"Along with the global trend towardsimproving tax compliance and information exchange, we suggest that smallbusinesses seeking finance undertake a strategic review of their books andrecords, including their tax returns, which may help build theircreditworthiness," Mr Ng says.
CPA Australia has six tips for China's small businesses in2019:
- Lookfor government incentives that are supportive of innovation
- Seekadvice on which technologies are best suited for your business before investingin those technologies
- Usebig data analytics to analyze your customers in order to further improvecustomer satisfaction
- Exploreopportunities in Xiong An New Area, emerging economies on the Belt and Road,and other fast growing markets in the Asia-Pacific region and Africa
- Investin improving strategic and managerial skills
- Undertakea strategic review of your cost structure and potential business risks
About CPA Australia
CPAAustralia is one of the world's largest accounting bodies with more than163,000 members working in 125 countries and regions around the world, and withmore than 25,000 members working in senior leadership positions. It hasestablished a strong membership base of more than 18,000 in the Greater Chinaregion.
About CPAAustralia Asia-Pacific Small Business Survey
The CPA Australia Asia-PacificSmall Business Survey provides annual insights into the views of smallbusinesses across the region and forms part of a longitudinal study that beganin 2009. The 10th CPA Australia annual survey comprised extensivesurveying of 3607 small business operators in ten markets, including Hong Kong,Mainland China (Beijing, Guangzhou, Shanghai, Shenzhen and Chongqing), Taiwan, Malaysia,Vietnam, Indonesia, Singapore, the Philippines, Australia and New Zealand.
Market Summary -- China
Asia-Pacific Small Business Survey
