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Small Businesses in South China Leading Asia Pacific

South China experienced positive business conditions in 2018. Especially, small businesses from Guangzhou from Mainland China grew considerably.

CPA Australia

According to a survey conducted by CPA Australia, one of the world’s largest accounting bodies, stated positive conditions are expected to continue in 2019 with Guangzhou’s small businesses also being the most likely from Mainland China to expect to grow.

Key to this is the very strong focus on innovation and technology. Not just small businesses from China mainland but other Asia Pacific countries also on a positive market growth drive.

77 per cent reported that their business grew in 2018 and 46 per cent increase the size of their workforce.

Guangzhou’s small businesses experienced the most positive conditions in Mainland China among the surveyed cities.

The positive sentiment in Guangzhou is likely to continue, with nearly 80 per cent of small businesses expecting their business to grow in 2019 and over half expecting to increase their headcount.

William Huang, President of CPA Australia South China Committee said, ‘Under a challenging environment caused by trade tensions and other issues, these businesses in South China generally performed strongly last year and show confidence in both the local economy and their business growth in 2019. I believe this confidence is built on their leading position on the utilisation of digital technologies in their business and their innovative culture.

Huang Continues, both Shenzhen and Guangzhou are the top performers in the Asia Pacific for online sales and are also leaders in the adoption of new digital or mobile payment methods in transactions. Over 80 per cent of businesses in both cities are earning over 10 per cent of their revenue from online sales, and nearly nine in ten businesses generate more than 10 per cent of their sales through new payment technologies.

“Further, we are delighted to find those small businesses from South China are quite sophisticated in the technologies they are investing in and adopting in their business. The survey findings show that they not only have a strong capability to identify the suitable technologies to invest for their short-term returns but also have an eye on the future and their customers, with respondents in South China being the most likely to have invested in Artificial Intelligence (AI) and customer relationship management (CRM) software among all markets surveyed in the Asia-Pacific,” Huang added.

Increasing cost, especially staff costs, is the factor that is most likely to have had a negative impact on businesses in South China in 2018, with nearly 60 per cent of respondents in Guangzhou stating that staff costs was the cost most detrimental to their business, ranking top in the surveyed markets.

“On the one hand, these business owners are facing increasing costs such as staff costs, on the other hand, they are having difficulty recruiting suitable staff to support their business growth, Huang says.

To solve this dilemma, CPA Australia suggests that these businesses revisit their company structure and cost structure and seek to improve their business strategy and operating model.

“The slowing global economy and economic uncertainties are making 2019 a challenging year for small businesses in South China, however, CPA Australia remains positive. Strong domestic consumption in South China supported by recent tax cuts, the region’s leading capabilities in innovation and technology, government policies to improve SME access to finance, and emerging opportunities from the Greater Bay Area plan, make us confident that South China’s small businesses will continue to grow and stay vibrant,” Huang noted.

CPA Australia Has Six Tips for China’s Small Businesses in 2019:

  • Look for government incentives that are supportive of innovation
  • Seek advice on which technologies are best suited for your business before investing in those technologies
  • Use big data analytics to analyse your customers to further improve customer satisfaction
  • Explore opportunities in Greater Bay Area, emerging economies on the Belt and Road, and other fast-growing markets in the Asia Pacific region and Africa
  • Invest in improving strategic and managerial skills
  • Undertake a strategic review of your cost structure and potential business risks.


Niloy Banerjee

A generic movie-buff, passionate and professional with print journalism, serving editorial verticals on Technical and B2B segments, crude rover and writer on business happenings, spare time playing physical and digital forms of games; a love with philosophy is perennial as trying to archive pebbles from the ocean of literature. Lastly, a connoisseur in making and eating palatable cuisines.

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