Businesses in China are cautiously optimistic for 2019 despite facing global and domestic uncertainties and challenges, said CPA Australia recently.
The accounting body did a survey of its Greater China members from Dec 14, 2018 to Jan 10, 2019, having collected responses from 220 members including finance and accounting professionals of listed companies, multinational corporations, private enterprises and government.
More than 60% of respondents forecast that China will maintain stable economic growth above 6% in 2019, despite rising global economic uncertainties created by trade tensions, Brexit, and rising US interest rates, said CPA Australia.
This confidence is reflected in profit forecasts for 2019, with 56.8% of respondents expecting their employer's profit to increase by more than 2%, the organization added.
In addition, 71.3% believe that their company will maintain or increase its headcount in 2019, the accounting body pointed out.
2019 strategies: Managing cost and talent
Given rising global uncertainties, most respondents said their organizations have chosen cost management as their key strategic focus in 2019, survey results indicate.
However, under the transformation to an intelligence-led environment in China, a very high number of respondents stated that their employer's strategic focus for 2019 is to attract, retain and develop talent as well, CPA Australia noted.
When asked which skills were most valued by employers, respondents identified teamwork capability, technical skills and communication skills, according to survey results.
Tax reforms, tech, and Belt & Road to drive growth
Top factors influencing this positive sentiment are tax reform, policies guiding the transformation of China to an innovative and intelligence-led economy and the Belt and Road Initiative, according to survey results.
Benefits of tax reform according to respondents
As part of an ongoing agenda to improve living standards, the Chinese government introduced a series of tax reforms in 2018, while some policies, such as individual income tax reform, came into effect on 1 Jan 2019.
The survey findings reveal that the market has reacted positively to these reforms, with over half of the respondents stating that tax reform will be one of the key drivers boosting economic growth this year, CPA Australia said.
Respondents believe the main benefits from tax reform include decreasing business operating costs, further encouraging China's economic transformation, increasing domestic consumption and making the tax system more robust, the organization said.
Individual income tax reform is also expected to help businesses, with almost one third of respondents expecting that this reform alone will increase their sales volume in 2019, the accounting body added.
Investing in tech
More than half of respondents reported that their business's investment in technology in the past 12 months has already improved their profitability, survey results indicate.
Businesses in China invest heavily in innovation, with 75.5% of respondents expecting their company will or may introduce a totally new product, service or process in 2019, which is an increase of 10% compared with the survey result in 2017, CPA Australia observed.
Response to B&R in the next three years
When asked the business's plan in response to the Belt & Road Initiative over the next three years, over half of the respondents reported an expectation that their business will take some form of action to take advantage of the initiative, including exploring new business opportunities and increasing business activities in the countries along the Belt and Road, according to survey results.