CPA Australia Survey: Tax Reform And Technology Adoption To Bolster China’s Stable Economic Growth In 2020

BEIJING, CHINA -�Media OutReach - 17 January 2020 – Bolstered by the adoption of emerging technologies and the
government’s tax and financial sector reforms, most accounting and finance
professionals expect China’s economy to maintain a stable growth rate of above 5.5 per
cent in 2020. In addition, three-quarters expect their company’s profit will
remain the same or increase, according
to the China Economic and Business Sentiment Survey 2020 conducted by CPA
Australia, one of the world’s largest accounting bodies.

From left to right: Mr. Kevin Ng Member of CPA Australia North China Committee ,  Mr. Derek Chan President of CPA Australia North China Committee, Mr. Michael Yu President of CPA Australia East & Central China Committee and Mr. William Huang President of CPA Australia South China Committee

Stable and
high-quality economic growth

Despite short-term
headwinds, the survey findings show that accounting and finance professionals are
cautiously optimistic in China’s economic conditions in 2020, with 76 per cent
of respondents forecasting GDP growth of 5.5 per cent or above.

The results
indicate that a combination of the adoption of emerging technologies and tax
and financial sector reforms are helping to boost the economy. Further , over one-third of respondents
believe improved China-US relations will also help to improve China’s economy,
with the easing of trade tensions expected to improve confidence in trade and
investment, and make doing business easier.

A stable growth rate around 6 per cent in 2020 and high-quality growth
driven by investments in emerging technologies will see China remain a key
driver, if not the most important driver of global growth in 2020 and beyond.

Business resilience

Respondents are generally confident in China’s business outlook for 2020,
with 75 per cent expecting that their company’s profit will remain the same or
increase , of which 64 per cent believe that their company’s profit will grow by
2 per cent or more. Consistent with robust profit expectations, respondents are
generally confident with in the labour market in 2020, with 66 per cent
expecting their company’s headcount to remain the same or increase.

CPA Australia members were most likely to select
attracting,
retaining, and developing talent (27 per cent), followed by cost management (26
per cent), and investing into innovation and technology (25 per cent) as their
company’s key strategic focuses for 2020. This reflects a proactive
short and long-term strategic focus of many Chinese firms.

Technology will
continue to boost economic growth

Supported by measures to encourage investment in research and
development, and adoption of emerging technologies, 42 per cent of respondents
chose the adoption of emerging technologies such as artificial intelligence,
blockchain technology, cloud computing, and robotic processing automation, as
the top driver of domestic economic growth in 2020. This indicates that many
accounting professionals are optimistic in the potential that these
technologies may provide to the economy, labour productivity and business
profitability.

The focus on innovation and technology by Chinese firms remains strong,
with 69 per cent of respondents expecting their business to introduce a new
product, service, or process in 2020, and half expect their business to
increase investment in new technology.

The focus on innovation and technology represents a long-term strategy
to continually move up the value chain. Targeted investments in innovation,
technology and talent by businesses should be them boost efficiency and stay
ahead of competitors.

Stimulating the
economy through tax financial structural reforms

The survey findings show that accounting and finance professionals
support policies to reform the financial sector and reform the tax system to
promote economic growth.

It therefore comes as no surprise that 77 per cent of respondents
indicated that tax reforms and reduced fees positively impacted their business
in 2019, with 53 per cent stating it has reduced their business tax burden.

91 per cent of accounting and finance professionals are confident that tax
reforms and fee reductions will provide a stimulus to the economy in 2020 through
decreasing business operating costs and further encouraging China’s economic
transformation. The areas members would most like to see tax reforms in are
corporate income tax (67 per cent), individual income tax (65 per cent) and
value-added tax (55 per cent).

Seizing the
opportunities from the Belt and Road Initiative

The Belt and Road Initiative (BRI) is progressively
attracting more companies to engage in activities related to it, with 60 per
cent of respondents stating that their company will engage in BRI-related
activities over the next three years, up 5 percentage points from 2019.

6 1 per cent of respondents believe that the BRI will create more
trade and investment opportunities for Chinese businesses in 2020, suggesting
that accounting professionals are confident that the country’s ambitious global
infrastructure and investment plan will help increase bilateral trade and
investment deals.    

In
conclusion, businesses should take full advantage of the various strategies the
government has announced to lift productivity, lower operating costs, and
expand globally in 2020.

About the survey

The
survey was conducted from 20 November to 9 December 2019 with 242 of CPA
Australia’s Greater China members participating, including finance and
accounting professionals from listed companies, multinational corporations,
private enterprise and the government.

About CPA Australia

CPA Australia is one
of the world’s largest accounting bodies with more than 164,000 members working in 150 countries and regions
around the world, with more than 25,000 members working in senior leadership
positions. It has established a strong membership base of more than 19,000 in the Greater China region.