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Small firms cautiously optimistic on 2019 outlook

By Jing Shuiyu | China Daily | Updated: 2019-04-10 08:56
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China's small businesses are cautiously optimistic amid the anticipated global economic downtrend in 2019, with over 70 percent of those surveyed expecting growth this year. [Photo/IC]

China's small businesses are cautiously optimistic amid the anticipated global economic downtrend in 2019, with over 70 percent of those surveyed expecting growth this year, a survey said.

More than 50 percent of the respondents expect to increase their workforce this year, according to CPA Australia's 10th annual Asia-Pacific Small Business Survey, which was released on Tuesday. With global economic uncertainty and slowing global growth, this result reflects positively on the capabilities and resilience of China's small business sector, the survey said.

Derek Chan, president of CPA Australia North China Committee, said that the conditions for small businesses were slightly weaker across the Asia-Pacific region in 2018, with fewer respondents reporting that they grew compared to the previous survey.

"For the Chinese mainland, the result bettered the survey average. 74 percent of small businesses from the Chinese mainland state that they grew in 2018, higher than the survey average of 66 percent," Chan told reporters. "The positive small business conditions look set to continue into 2019."

The findings follow extensive surveying of more than 3,600 small business operators in 10 markets, including Australia, China, Indonesia, Malaysia and the Philippines. It was conducted by CPA Australia, one of the world's largest accounting bodies.

The findings showed increasing costs are one of the most significant barriers to small business in the Chinese mainland. Over 33 percent of the surveyed businesses identified it as a "key challenge".

To help ease companies' burden, China introduced a series of tax reforms since last year, and it plans to reduce the tax burdens and social insurance contributions of enterprises by nearly 2 trillion yuan ($298 billion) this year.

Kevin Ng, member of CPA Australia North China Committee, said: "We believe the government's further tax cut, together with other measures that will be implemented this year, will help to reduce their cost burden and sharpen their competitiveness in the region. This will stimulate the growth of the broader business sector."

"Deeper reforms on value added tax, commencing on April 1, will further relieve the pressure on small businesses and boost economic activity," Ng said.

The survey also found that 34 percent of Chinese mainland's businesses expect easy access to finance, higher than the Asia-Pacific average of 23 percent.

Chan considered the government's announcement during this year's two sessions on increasing the availability of finance for small businesses as "timely" measure, which will further improve small businesses' access to finance.

"Considering the high proportion of small businesses from the Chinese mainland that sell online and utilize other digital technologies, there are opportunities for reputable financial institutions to apply financial technologies and big data analysis to make it easier for small business to access finance," Chan added.

Li Zibin, president of China Association of Small and Medium Enterprises agreed, citing supply-chain financing as an important tool to improve the access of small companies to raise capital.

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