Seventy-four per cent of respondents expect their company's profit to increase or remain largely the same this year, and 78 per cent anticipate their company will expand business activities in Mainland China in the next three years.
The president of CPA Australia's North China Committee Mr Lloyd Peng said: "Mainland China's economy experienced a steady recovery over the past year, thanks to policy support and structural reform. Encouragingly, our survey results indicate that this growth momentum is expected to carry forward into 2024.
"Despite global economic uncertainties, our survey reveals that 45 per cent of professionals anticipate their company's profit will increase this year. Adding to this positive outlook, a significant number of companies are focusing their mid-term expansion plans on Mainland China. This indicates that Mainland China continues to be an attractive destination for investment, particularly in regions that have prioritised opening-up, establishing strong connections with overseas markets, and fostering innovative cultures, such as the Greater Bay Area and the Yangtze Economic Belt."
Peng emphasised the importance of policy support in driving economic growth: "In the face of economic challenges, a comprehensive set of favourable policies has been implemented to support business recovery. These include stimulating consumer spending, enhancing industry capabilities and reducing barriers to entry. To ensure effective uptake of these policy supports by business, it's crucial that they are implemented in a predictable and consistent way.
"If larger companies in various industries can leverage these measures, it will assist them to inject new impetus into their business and increase support to smaller businesses in their value chain."
Respondents pointed out that increasing competition (41 per cent), weak customer demand (36 per cent) and increasing costs (28 per cent) are the major barriers for Mainland Chinese businesses in 2024.
In response, many businesses are adopting a prudent strategic focus this year, with a focus on cost management (47 per cent), innovation, technology adoption and digitalisation (43 per cent) and improving business efficiency (41 per cent).
Though cost management was a primary focus, 53 per cent of respondents still anticipate their company will increase investment into new technology, innovation and digitalisation this year.
The president of CPA Australia's East and Central China Committee Mr Raymond Zhu highlighted the necessity of innovation and digitalisation. "By adopting a robust innovative culture and embracing technologies like artificial intelligence, companies can more effectively meet customer demand and distinguish themselves in a fiercely competitive market. It is encouraging to witness numerous companies striking a balance between cost control and a visionary investment strategy."
Zhu added: "Our survey highlights the crucial role of government policies in providing essential support. When asked about the measures they anticipate to best aid their businesses this year, 43 per cent of respondents identified tax and fee payment rebates and deductions, including preferential treatment for research and development expenses. An additional 32 per cent emphasised the importance of increased support for innovation, technology adoption, and digitalisation. With an upcoming round of tax reform, we are optimistic these policies will offer targeted support, enabling businesses to embrace emerging opportunities arising from technology adoption and innovation."
Demonstrating a commitment to sustainable development, 91 per cent of respondents indicated that their companies are actively undertaking environmental, social, and governance (ESG) actions. Among these ESG practices, the highest priority is ensuring data security and minimising privacy risks.
Member of CPA Australia's South China Committee Mr William Huang said: "A focus on sustainability and new energy economy will pave the way for long-term success for many businesses. High-quality data assets serve as the foundation for a smooth transition towards a sustainable future. With the increasing global awareness on ESG and technology, we recommend businesses to allocate resources to enhance data governance."
A significant 39 per cent of respondents expect their companies to venture into or expand their existing presence in overseas markets within the next three years. Notably, the preferred destination for expansion are countries in Southeast Asia.
Huang commented: "Expanding into international markets presents an opportunity for Mainland Chinese businesses to navigate the intense local competition and explore new global prospects. To leverage these advantages, we highly recommend that businesses familiarise themselves with the business and regulatory environment of the new markets they are considering expanding into.
"To succeed in new markets, we also recommend companies develop a localised strategy that reflects the specific characteristics of each market. This will increase their chances of success and maximising their return on investment."
CPA Australia collected 209 responses from accounting and finance professionals working in various industries across Mainland China during November to December 2023 for the Mainland China's Economic and Business Sentiment Survey 2024.
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CPA Australia
CPA Australia is one of the largest professional accounting bodies in the world, with more than 172,000 members in over 100 countries and regions, including more than 22,200 members in Greater China. We have offices in Beijing, Shanghai and Guangzhou. CPA Australia provides thought leadership on local, national, and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au
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