China’s digital economy booms amid tech gap between mainland firms

Nine out of every 10 accounting and financial professionals in Mainland China believe their employer will increase technology use over the next 12 months, but there is a digital divide between large and small businesses, according to CPA Australia’s Business Technology Survey 2022.

Accounting firm CPA Australia surveyed 820 accounting and financial professionals in seven Asia-Pacific markets, including 186 respondents from Mainland China.

Results show that 80% of Mainland Chinese respondents reported that their company has a digital transformation strategy, and 96% expect their businesses will take action to improve digitalisation in the next 12 months. This includes expecting their organisation to start or continue implementing of a digital transformation strategy (41%).

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“The survey results reflect the high-quality growth of the digital economy in Mainland China with many businesses keen on exploring innovative solutions to fuel data-driven growth,” said Tony Chan , deputy president of CPA Australia’s South China Committee.

“Mainland Chinese businesses are stepping into a new milestone of digital transformation by translating vision into action,” said Chan. “I believe businesses will further improve their operational efficiency and profitability by integrating more technologies into all organisational functions in the future.”

When asked what technologies respondents expect their organisation to use more in the next 12 months, data analytics and visualisation software (39%) was the highest ranked. Business intelligence software (34%) and cybersecurity software (29%) were also top priorities.

However, the survey found a technology adoption gap among Mainland Chinese companies of different sizes. Over 30% of respondents from small and medium-sized enterprises (SMEs) do not have a digital transformation strategy, compared to only 11% of respondents from larger companies. 

Among respondents that work in SMEs, 14% said their company will not increase the use of any technologies in the next 12 months compared to only four per cent of respondents from large companies.

Collin Jin, a member of CPA Australia’s East and Central China Committee, recommend that SMEs consider looking at low-hanging technologies in the market, such as intelligent automation and SaaS applications.

Further, the survey shows that complex legacy systems (37%), financial costs and low return on investment (34%) and poor data quality (31%) are the key barriers to technology adoption in Mainland China.

“The percentage of Mainland Chinese respondents identifying complex legacy system and poor data quality as key barriers to technology adoption is noticeably higher than the survey average,” said Jin. “This implies that while many businesses have started their journey of digitalisation, older systems may be a hindrance to the collection of quality data and to the adoption of advanced technologies”

Jin said companies need to ensure they can accumulate and collect relevant data across different departments in an efficient and collaborative manner while meeting compliance requirements. This means companies need to put in place comprehensive and practical data policies and procedures for employees.

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