CPA Australia: Nearly half of Mainland Chinese businesses expect profitable growth in 2022

  • Most businesses expect Mainland China’s GDP to grow by five per cent or more.
  • Eighty-three per cent
    predict their company’s profits will increase or remain stable.
  • Challenges include global economic uncertainty, the pandemic and potential trade barriers.

BEIJING, MAINLAND CHINA
– Media OutReach – 21 January
2022 – Most businesses in Mainland China are confident about the country’s 2022
economic and business outlook, according to a new survey by
one of the world’s largest professional accounting organisations, CPA
Australia. The survey results suggest that Mainland China will continue to play
an important role in driving the global economic recovery this year.

CPA
Australia surveyed 210 accounting and finance professionals in Mainland China about
local economy and business conditions in 2022. Sixty-nine per cent of respondents expect Mainland
China’s GDP to grow by five per cent or more. Eighty-three per cent predict their company’s profit will increase or remain
the same. Forty-seven per cent expect
their company’s profit to increase by two per cent or more. Forty-nine per cent of respondents expect their company’s headcount will increase.

Kevin Ng FCPA (Aust.),
Member of CPA Australia’s North China Committee, said “Respondents are generally
optimistic that the economy will remain stable in 2022. This is mainly due to
positive factors such as an effective control over Covid-19 and a host of
different measures which were implemented to keep the economy stable, including
government interventions.

“The economy is facing
major headwinds such as continued global economic uncertainties, the pandemic
and the possibility of more international trade barriers. These challenges may
impact many businesses, particularly smaller businesses facing financing
difficulties.

“The government’s timely
measures to support small and medium-sized enterprises, such as introducing
targeted tax deduction and fees cuts as well as strengthening financial support,
will help relieve the financial burden of these challenges and lower financing
costs.”

Reflecting efforts to ensure long-term growth and
stay ahead of technological disruptions, 59 per cent of respondents think their company will
increase investment into new technology and 47 per cent expect digital transformation will
be their company’s key strategic focus in 2022. In addition, 88 per cent of
respondents expect their company will undertake an environmental, social and governance
(ESG) initiative this year.

Michael Yu
FCPA (Aust.), President of CPA Australia’s East and Central China Committee,
anticipates that “Trends
in technology and innovation, ESG and consumer business investments will
continue to boom in 2022 in terms of the direction of corporate investments and
mergers and acquisitions.

“Digital transformation
and innovation are key drivers of business growth. The percentage of
respondents who expect their company to increase investment into new technology
has increased by two percentage points from last year. This marks two consecutive
years of rising expectations for technology investment.

“Supported by the 14th Five-Year Plan, the deployment of 5G coverage
network and the proliferation of artificial intelligence, blockchain and cloud technologies,
the strong level of business technology usage and innovation will ensure Mainland
Chinese businesses are well positioned for further development and expansion.

“It’s positive to see most local businesses will be
taking actions related to ESG. This indicates that businesses are accelerating
ESG integration into their business models and aiming to contribute to national
ESG goals such as carbon neutrality.”

Rebecca Wong FCPA (Aust.), Deputy President of CPA Australia’s South
China Committee, noted that 85 per cent of respondents expect their company to
expand business activities within the Greater China region in the next three
years. She says this trend is another positive sign that the local economy
is stabilising.

“Respondents were most likely to expect their
business to expand into the Greater Bay Area (GBA) in the next three years,
with 47 per cent picking this region. The market size, large talent pool and a
strong innovation and technology ecosystem in the GBA are attractive to businesses
seeking growth opportunities.

“We recommend businesses seek to learn more about
the GBA, including preferential government policies and consumer behaviour, and
develop a long-term strategic plan to capitalise on the unique growth
opportunities in the GBA.”

CPA Australia recommends Mainland
Chinese businesses consider the following:

  1. Take advantage of preferential market
    expansion policies, for example, diversifying and expanding businesses into the
    GBA.
  2. Integrate medium and long-term development
    strategies and reasonably allocate resources across short, medium and long-term
    R&D investment in targeted areas.
  3. Establish a long-term ESG strategy or governance
    framework and specify ESG-related responsibilities across different business
    units.
  4. Regularly review and seek to improve internal
    tax compliance and control systems.
  5. Balance market opportunities, capital risks
    and corporate governance risks based on the characteristics of the industry and
    the overall business strategy.
  6. Focus on
    nurturing, upskilling and reskilling talent in innovation and
    technology to enhance the competitiveness of the businesses.

Download the Mainland China Economic and Business
Sentiment Report 2022

 

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