In recent years, The development of China’s real economy has been confronted with many challenges, including serious overcapacity, rising production costs, prominent resource and environmental constraints and obstacles in technology introduction. Enterprises need to find a new development path, digital transformation is one of the effective paths.
The digital transformation of Chinese enterprises has been the general trend. According to a new survey of companies conducted by CPA Australia, one of the world’s largest professional accounting bodies, nearly 60% of Chinese companies surveyed expect to increase their investment in new technology in 2022. “Digital transformation, technology development and innovation” is the main strategic focus of 47% of respondents for 2022.
Wu Jiayuan, CPA Australia north China committee member and Senior CPA in Australia, said digital transformation and innovation are key drivers of business growth. The percentage of respondents who expect their companies to invest more in new technologies increased by two percentage points from last year, marking the second straight year of growth. “Under the guidance of the 14th Five-Year Plan and driven by technologies such as large-scale 5G signal coverage, artificial intelligence, blockchain and the rapid development of cloud technologies, the strong level of commercial technology application and innovation will enable Chinese enterprises to make adequate preparations for further development and expansion.” Wu jiayuan said.
The year 2022 will be a big year for enterprise technology investment
How do companies see their development priorities in 2022? “To maintain the long-term growth and stay ahead in the technology of iterative, nearly half of the respondents said the digital transformation, development and innovation of science and technology is a major strategic focus in 2022 in the enterprise, the strategy is also the highest proportion in 2021 respondents choose strategic focus, last year, 33% this year compared with last year, the proportion rose by nearly 15%.” Wu jiayuan said. He believes the focus on digital transformation and innovation shows that many businesses are optimistic about the long-term positive trend of The Chinese economy, despite a series of uncertainties in the short term.
“The most important growth drivers for companies are innovation and digital transformation, so I believe companies will increase investment in technology.” Yu Zheng, chairman of CPA Australia east and Central China Committee and senior CPA in Australia, said. In CPA Australia’s survey of 210 Chinese finance, accounting and finance professionals, the proportion of respondents who said they would increase their investment in technology in 2022 was 57% in 2021, up 2 percentage points this year, achieving positive growth for two consecutive years. On the other hand, the percentage of companies that reduced investment in new technologies fell to 3 percent from 8 percent last year.
YuZheng believes that 2022 will be a great year of enterprise technology, emerging industries and traditional industries, the enterprise will be faced with the complicated market environment and fierce competition, will inevitably increase the input of science and technology, technology investment, in order to obtain more high quality products and services provided to the market, maintain and consolidate and develop, and improve their own market position, This is inevitably determined by the enterprise’s domestic demand. “In the outline of the 14th Five-year Plan, The guidelines and a series of preferential policies for China’s technological transformation and investment are clear, which also creates a good external policy environment for enterprises to carry out technological transformation and investment.” Danger just then.
ESG and the consumer sector will be hot spots for corporate investment and m&a
Yu said that while enterprises are investing in technology, they are turning more attention to the environment, social responsibility and corporate governance, also known as ESG. Yu zheng predicted that ESG and the consumer sector will be the hot direction of enterprise investment and m&a this year, and the outlook will continue to be good. The CPA Australia survey found that 88 per cent of respondents said their companies would implement ESG initiatives. “We are seeing a number of ESG-oriented actions by most Chinese companies, indicating that companies are accelerating the integration of ESG into their business models, which will help achieve the national carbon neutrality goal.” Danger just then. Yu zheng believes that the popularization and promotion of 5G technology, cloud computing, artificial intelligence and block chain in China also set up a very good technology platform for enterprises to apply these technologies in their own scenarios.
According to the survey, nearly a quarter of companies said that they have developed or will soon develop long-term strategic plans for ESG. “This figure fully demonstrates the importance companies attach to the emerging field of ESG, which is closely linked to China’s push to achieve peak carbon neutrality.” Yu said that in addition to clarifying mid – and long-term development strategies and rationally allocating resources for short -, medium – and long-term R&D investments in target areas, companies should also establish long-term ESG strategies or frameworks to clarify esG-related rights and responsibilities of different business units. He said that the implementation and implementation of ESG policy is not a matter of one department, one field or one business plate, but will have a profound impact on the investment field, strategic planning, talent pool and management concept of enterprises. Speaking of ESG in enterprise how to fall to the ground, YuZheng think, first of all should be in the company’s board level set ESG committee, for strategic planning and making, at the same time at the practice level, according to their respective business module make the ESG with solid exercise plan, and these programs can accordingly as the change of time or the policy environment, Finally, ESG education and training should be popularized for all employees in the company, so that THE concept of ESG can be more integrated into the daily work of each employee. In this way, a complete, planned and systematic set of ESG implementation regulations and rules will be formed from top to bottom, so as to promote and guarantee the perfect integration of existing business and ESG requirements.
Yu zheng stressed that the investment in ESG cannot be separated from talents, and the first requirement for talents is creativity and innovation ability. “Creativity and innovation are the foundation of future-oriented enterprise development, and only employees with such thinking and thinking can lead the enterprise to the future. However, innovation ability alone is not enough, but also need to put innovation ability into practice digital implementation and application ability. In addition, as companies operate globally, they will inevitably encounter different working environments, different teams, and different geographical locations, so adaptability and flexibility of employees becomes very important.” He thinks, the enterprise to possess the ability of the above three kinds of compound talent demand is bound to be on the transfer of talents in universities and colleges, enterprises recruitment, internal training a big challenge, “for a period of time such high foreseeable inter-disciplinary talent inevitable gap, how to develop good talent reserve program is the enterprise will face the challenge.” He said.
Under the guidance of the dual carbon target, ESG investment and ESG-driven mergers and acquisitions among enterprises have become an important part of leading China’s economic trend. When it comes to the future in the field of ESG investment opportunities, runs the risk of just ESG investment is very hot, that “from the energy structure is now continue to reduce fossil energy in the proportion of primary energy sources, step by step backward and inefficient coal-fired capacity, promote clean energy alternative, including the development and utilization of the increasing hydrogen more measures and the low carbon transition of energy structure. On the other hand, in addition to ensuring a stable supply of electricity, increasing access to renewable energy, high level utilization of energy storage technology and new power systems will be further built, which are all the investment activities in the ESG sector.” He said that the supporting aspects of green finance, such as green credit, green bonds, green equity investment and other green financial innovation products are gradually introduced, which will form an effective and positive incentive for ESG investment and m&a. Furthermore, the investment philosophy of today’s industrial and financial investors is no longer limited to the traditional financial measures of equity value per se or equity cash flow. More and more attention will be paid to non-financial indicators such as environmental social responsibility and corporate governance, and the social environment, long-term value and sustainable development ability of enterprises will become the trend of consideration and evaluation. Domestic regulatory requirements, changes in the financing environment and increased consumer awareness of environmental protection will also prompt changes in various industries.
“We’re seeing more and more, by means of the implementation of strategic change, ESG, invest in new materials research and development innovation, the new craft, new technology promotion, electrification technology upgrade, and improve production efficiency and energy utilization ratio and improve the proportion of renewable energy, promote green architecture, advocate green travel of staff, And focus on carbon reduction in production links to produce more high-tech value-added green products, so as to build sustainable development competitiveness. So, from the energy sector in the past, to consumer products and technology, investment is all around ESG.”
