The number of Mainland Chinese small businesses that expect to grow and hire new employees this year is on the rise, according to a survey by professional accounting organisation CPA Australia.

CPA Australia's annual Asia-Pacific Small Business Survey showed that 59% of Mainland Chinese small businesses expect to grow in 2024, beating the results from the previous two surveys. At the same time, 43% anticipate their company will increase their number of employees.

CPA Australia's North China Committee President Mr Lloyd Peng said, "It's a positive sign that the number of Mainland Chinese small businesses that expect to recruit staff is gradually returning towards pre-pandemic levels. This indicates improving confidence, as typically small business only add to their headcount when they are confident in their prospects.”

Peng said,"Reflecting the improved expectations, Mainland Chinese small businesses are taking actions to transform and enhance their value creation for sustainable growth. Almost 30 per cent of survey respondents reported that their businesses benefited from improved business management in 2023 and 86 per cent will or may innovate through the introduction of new products and services this year. This upgrading of capacity and strong focus on innovation helps to explain why small businesses expect to create more positions.”

Meanwhile, the survey showed increasing costs, increasing competition and rising interest rates are identified as major barriers for Mainland Chinese small businesses. Most other Asia-Pacific markets surveyed experienced the same challenges.

In response, Mainland Chinese small businesses increasingly embrace and invest into cutting-edge technologies to improve efficiency and reduce costs.

Survey results showed that last year, Mainland Chinese small businesses led the Asia-Pacific in investments into advanced technologies like artificial intelligence (30%), enterprise resource planning (ERP) software (29%) and business intelligence software (27%).

To support the levels of technology adoption and innovation by Mainland Chinese small businesses, 90% expect to seek external funds this year. Over half (52%) reported their main reason for seeking such funds is for growth, 6% higher than last year.

Further data from the survey showed 93% of Mainland Chinese small businesses are actively undertaking activities linked to environmental, social, and governance (ESG), the second highest result for the Asia-Pacific. They are also leading Asia-Pacific in the adoption of green and sustainable finance opportunities.