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