The performance of small business in the Chinese mainland hit a five-year high in 2024, largely driven by technology and innovation, according to a new survey by CPA Australia, one of the world's largest accounting bodies.

According to CPA Australia's annual Asia-Pacific Small Business Survey released on Thursday, 66 percent of small businesses in the Chinese mainland reported growth in 2024 while 71 percent project expansion this year. Both results are at their highest level since 2019.

Innovation, improved business management and venturing into new markets have been crucial in shaping their positive business sentiment, as shown by the survey.

Meanwhile, the survey found that 74 percent of small businesses in the Chinese mainland anticipate local economic growth this year, exceeding the Asia-Pacific average of 67 percent, further boosting their business confidence.

"The Chinese government's supportive measures for private enterprises bolstered many small businesses to grow stronger and better last year," said Lloyd Peng, CPA Australia's North China Committee president.

"Policies such as pretax super deduction for R&D expenditure and VAT exemptions for small-scale taxpayers have helped to foster a stable business environment and encourage businesses to continuously uplift their innovation capabilities," Peng said.

The survey also reveals that as high as 88 percent of respondents from Chinese mainland expect to introduce new products or services this year, 16 percentage points above the Asia-Pacific average. Additionally, 51 per cent forecast that their overseas sales will grow this year.

"Innovation is a core competency among China's small businesses. They are good at turning insights on customer needs and emerging trends into new products or services swiftly," Peng said.

Their strong capability to provide value-for-money products or services will continue to win customers at home and abroad despite international trade uncertainties, Peng added.

CPA Australia collected 4,236 responses from small businesses in various industries across 11 markets in Asia-Pacific during November to December last year for this annual survey, including 757 respondents from Chinese mainland.