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Chinese Mainland small businesses demonstrate resilient growth driven by innovation and market diversification despite international volatility
Amid rising uncertainties in international markets, small businesses in the Chinese Mainland demonstrated strong resilience in 2025, supported by continued innovation and proactive expansion into new markets, according to the most recent Asia-Pacific Small Business Survey of global professional accounting body CPA Australia.
More than half (54 per cent) of surveyed small businesses in the Chinese Mainland reported business growth last year, with innovation and new market expansion identified as the key drivers.
Employment conditions remained stable, with 36 per cent of small businesses increasing their headcount in 2025, remaining broadly flat year on year.
One third identified introducing new products or services as a positive busuiness driver last year, the highest share among the 11 surveyed markets in the Asia Pacific, and the strongest result for the Chinese Mainland in a decade. Innovation momentum is expected to remain strong in 2026, with 85 per cent planning to innovate.
Expansion into new markets is playing a growing role in supporting Chinese Mainland small businesses. In 2025, 32 per cent said entering new markets contributed positively to their business performance, up from 28 per cent previously and the highest result among surveyed markets. Looking ahead, 61 per cent expect their businesses to grow in 2026.
Mr Lloyd Peng FCPA (Aust.), President of CPA Australia’s North China Committee, said: “The 2025 Government Work Report reinforced support for small businesses and private enterprises as core drivers of innovation and economic resilience. Initiatives such as the Wan Fan Yun Hai Action Plan, rolled out in recent years to support SMEs’ global expansion, have lowered barriers to overseas market entry, trade compliance and partnership development. Our survey findings reflect the positive impact of this policy direction and strong support measures.
“With the launch of China’s 15th Five Year Plan this year, SME policy is shifting towards quality growth, capability building and enhanced global competitiveness, with innovation, technology and AI adoption, and green transition as key growth drivers. Building on SMEs’ earlier overseas experience and supported by targeted government subsidies and incentives, Chinese Mainland SMEs are increasingly expected to pursue overseas expansion in a more structured, stable and sophisticated manner, with an increasing focus on ASEAN and Belt & Road markets.”
Rising costs were cited by 28 per cent of respondents as the negative factor most affecting their business in 2025, the lowest proportion among surveyed markets. Transportation and storage costs remained the most frequently cited cost pressure for the third consecutive year.
Mr Peng added, “Rising geopolitical uncertainties are affecting SMEs globally, not just those in the Chinese Mainland. Businesses involved in outbound activity are facing more volatile trading conditions and higher logistics costs. SMEs should strengthen risk management against supply chain disruption, closely monitor cash flow amid fuel price volatility, and, where feasible, consider progressively shifting to renewable energy to support longer term cost resilience.”
Accelerating digitalisation remains a major driver of small business expansion and innovation. In 2025, 59 per cent of Chinese Mainland small businesses said their technology investment had boosted profitability.
Chinese Mainland small businesses continue to rank among the leaders in digital capability, including social media use, e-commerce adoption and digital payment. They are also at the forefront of investment in advanced technologies such as artificial intelligence (AI), business intelligence (BI) software and enterprise resources planning (ERP) software.
Close to half (48 per cent) of Chinese Mainland small businesses reported that AI was the technology they invested in most heavily during 2025, the highest share among surveyed markets and well above the survey average of 32 per cent.
Mr Collin Jin FCPA (Aust.), President of CPA Australia’s East and Central China Committee, said: “SMEs in the Chinese Mainland are increasingly adopting tokenised approaches to support E-commerce. Backed by a range of government initiatives, including the SME Digital Empowerment Action Plan (2025–2027), alongside upgrades to financial infrastructure and the ongoing expansion of the digital renminbi ecosystem, these digital tools are strengthening SMEs competitive advantages in cross border trading and transaction efficiency.
“This increasingly sophisticated ecosystem has also lowered the barriers to business formation, leading to a surge in the number of One-Person Companies (OPC).”
Mr Jin added “Looking ahead, two key trends are set to shape small businesses in the Chinese Mainland. The first is deeper integration of AI into business models to enhance customer experience, drive innovation and improve productivity. The second is a growing number of entrepreneurs starting businesses under the OPC model to explore new markets, supported by the convenience of tokenised and digital tools.
“Entrepreneurs and business owners should make full use of subsidies and incentives provided by the central and local governments to strengthen profitability through enhanced digital capabilities. These can be applied across a wide range of areas, including streamlining operational processes and upgrading customer service.
“At the same time, it is critical for businesses to regularly review and enhance cybersecurity protections, particularly the security of fund accounts and digital payment tools across platforms. As tokenised mechanisms continue to evolve rapidly and AI functions become increasingly embedded in online tools, robust fund accounts and digital payment security is essential to safeguarding business assets.”
Financing conditions and business solvency both improved last year. In 2025, 67 per cent of small businesses reported easy access to external finance, with more than half expecting similar conditions this year. Debt servicing capacity also remained strong, with 56 per cent indicating that paying debts was easy in 2025, while 61 per cent expect this to continue in the year ahead.
Mr William Huang FCPA (Aust.), a member of CPA Australia’s South China Committee said: “From 2025 onwards, China has significantly strengthened both fiscal support and monetary policy tools to ease SMEs’ access to finance. Measures such as interest subsidies, government guarantees and targeted fiscal spending have been complemented by monetary policies that expand credit supply and lower financing costs. Together, these initiatives are supporting SMEs innovation, hiring and digitalisation.
“Despite improving borrowing conditions, many SMEs are cautious about taking on new debt, reflecting a prudent approach amid geopolitical uncertainty and trade fragmentation. Managing cash flow and cost control remains essential in 2026.”
Many small businesses dedicated time or resources to ESG related actions in 2025, with 34 per cent focusing on supply chain sustainability and 33 per cent investing in renewable energy.
Mr Huang commented: “The 15th Five-Year Plan period is key for green transformation and reaching carbon peak goals. For SMEs, the green transition is increasingly a source of productivity improvement, cost optimisation and competitiveness upgrading, especially amid fuel price volatility. SMEs that meet recognised green or low carbon criteria are also more likely to benefit from supportive green finance channels, faster project approval processes, and capture procurement opportunities from larger enterprises.”
CPA Australia collected 4,166 responses from small businesses in various industries across 11 markets in Asia-Pacific including Chinese Mainland, Chinese Hong Kong, Malaysia, India and Australia. This included 751 responses from Chinese Mainland small businesses.
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