Deloitte 2025 Q1 CFO Express

As emerging technologies deeply integrate into various sectors and the global landscape undergoes significant shifts, the way businesses generate value is experiencing transformative changes like never before. By 2025, China's economy is expected to continue its steady progression towards high-quality development. Yet, amidst external uncertainties, groundbreaking technological advancements, and the pressing need for sustainability, enterprises are faced with ever-greater challenges. To thrive in a fiercely competitive market, companies must critically evaluate their core strengths and proactively adapt to change. In this context, businesses must not only align with broader policy objectives but also stay abreast of technological innovations, efficiently allocate resources, and foster sustainable business practices.

• Under the overarching requirement of ‘balancing quality improvement and quantity growth,’ how can enterprises seize policy guidance to identify new growth opportunities in the wave of high-quality development?
• As AI and cloud computing redefine the business landscape, how should organizations strategize, cultivate talent, structure operations, and manage data to harness the full power of these technologies? For small and medium-sized enterprises, what strategies can be adopted to effectively integrate AI technology?
• With the impetus of policy backing and technological breakthroughs, how can China's life sciences and healthcare sectors capitalize on opportunities, tackle challenges, and experience exponential growth?
• In a tax environment that grows more intricate by the day, what strategies can enterprises employ to bolster tax compliance, refine risk management, and ensure continued sustainability?
• As the philosophy of sustainable development takes deeper root, how can businesses transition from viewing sustainability reporting as a regulatory checkbox to a catalyst for value generation?
• In a complex and uncertain business climate, how can CFOs re-imagine their leadership approach, empower their teams, and steer their companies through volatilities?

This issue of CFO Express focuses on the key issues enterprises will face by 2025. We hope the insights and analyses provided herein will inspire corporate decision-makers and help businesses navigate the wave of transformation.

Chief Economist's View

Interpretation and Industry Outlook of the 2025 Government Work Report

2025 marks a crucial transition period as China concludes the 14th Five-Year Plan (2021-2025) and begins the 15th Five-Year Plan. During this period, China's economy has shifted from high-speed growth to a phase of high-quality development. The government work report (‘report’) continues to emphasize the fundamental requirement of ‘balancing the improvement of quality with the expansion of quantity’.

The quantity target reflects the determination to achieve certainty in self-development amid the uncertainties of the global economy, while the quality target underscores long-term considerations for efficiency, fairness, security, and sustainability. Based on our long-term observation of China's economy, we will analyse future policy priorities and opportunities for key industries from two perspectives: macro policies and industry development.

Table: 2025 Government Work Goals 

Data Source: ‘The Government Work Report 2025’, Wind

This year marks the third consecutive year in which the GDP growth target is set around 5%, reflecting the consistency of policy and demonstrating the nation's firm determination to continuously promote a healthy economy. This target is necessary for stabilizing employment, preventing risks, and benefiting people's lives, and it aligns with the medium and long-term development goals, highlighting a clear orientation of rising to challenges and taking proactive actions.

In terms of fiscal policy, to achieve the growth target, the report has for the first time since 2008 used the term ‘a more proactive fiscal policy’ and set the fiscal deficit ratio at 4%, a historical high. The total of the deficit, special bonds, ultra-long-term special treasury bonds, and special treasury bonds amounts to 11.86 trillion yuan, an increase of 2.9 trillion yuan from last year. On one hand, ensuring the continuity of existing policies, continuously releasing the effects of a package of policies introduced in the fourth quarter of last year; on the other hand, focusing incremental policies on benefiting people's lives and boosting consumption, ensuring that policies are more forceful and targeted, giving enterprises and residents a greater sense of gain.

Regarding monetary policy, the report has, for the first time since 2011, tuned it to ‘appropriately accommodative monetary policy’ implementing a moderately loose supportive monetary policy. It will cut the reserve requirement ratio and interest rates as appropriate based on the domestic and international economic and financial situation and the operation of the financial market. Pan Gongsheng, governor of the People's Bank of China stated at a press conference during this year's National People's Congress that the current average reserve requirement ratio for financial institutions is 6.6%, which still has room for decline. There is also room for the central bank to lower the interest rates on structural monetary policy tools funds provided to commercial banks. At the same time, the central bank can comprehensively use monetary policy tools such as open market operations, medium-term lending facilities, rediscounting, and policy interest rates to maintain ample market liquidity, reduce the cost of bank liabilities, and continuously drive down the overall cost of social financing.

More information: Interpretation and Industry Outlook of the 2025 Government Work Report (Chinese version only)

Trends and Outlook

Deloitte Launches Report ‘Tech Trends 2025’

Deloitte's latest report, ‘Technology Trends 2025,’ themed ‘Ubiquitous AI: Algorithms Weaving Magical Realities,’ highlights that organizations need to coordinate strategy, talent, architecture, and data to unlock AI's full potential. Based on cross-industry experiences and case studies, the report emphasizes that enterprises pursuing breakthroughs in emerging technologies must consider their technology ecosystem layout as key to unlocking growth and achieving technological impact. The report identifies six major trends reshaping enterprise operations, growth, and transformation, which will significantly impact businesses over the next 18 to 24 months:

1. Interaction - Spatial computing takes center stage

Spatial computing is gaining enterprise interest for breaking down information silos and enabling more natural data interactions. Successful use cases, like advanced simulations, help organizations test scenarios and understand operational impacts. Future AI advancements could improve spatial computing experiences and interoperability, allowing AI agents to anticipate and meet user needs proactively.

2. Information - What’s next for AI?

Enterprises previously preferred purchasing ready-made large language models (LLMs) to accelerate AI deployment, but this approach lacked the professionalism and flexibility needed for all scenarios. Driven by security, energy consumption, and intelligent agent collaboration needs, more enterprises are adopting customized small models. These models efficiently handle specific tasks, generate multimodal content, run complex simulations, and provide personalized virtual assistant services, potentially replacing the traditional ‘an app for every need’ with ‘an intelligent agent for every need.’

3. Computation - Hardware is eating the World

AI is entering a new era of hardware innovation. Next-generation AI-specific chips embed AI models into personal computers and edge devices, enabling localized, offline computation, enhancing user experiences, and laying the foundation for future computational infrastructure. In medical devices and robotics, AI-integrated edge computing devices show tremendous potential. These new processors offer robust performance and low energy consumption, helping mitigate global computational energy issues. Enterprises should seize investment opportunities in edge computing hardware but base them on clear strategic planning and business value justification.

4. Business Technology - IT, amplified: AI elevates the reach (and remit) of the tech function

New-generation AI technologies are reshaping enterprise IT departments, driving digital transformation, and embedding intelligent capabilities into business operations. Software engineering becomes a strategic pivot across industries. The proliferation of AI enables traditional IT service models to create greater value through hardware and software integration.

5. Cyber and Trust - The new math: Solving cryptography in an age of quantum.

The rapid development of quantum computing presents both opportunities and challenges. Its powerful decryption capabilities pose significant risks to existing network security systems. Despite the lack of a precise timeline, proactive preparation is crucial. This is an ongoing battle without a clear end date. The U.S. National Institute of Standards and Technology is urgently developing new encryption standards, and organizations must reassess their network security strategies to counter future quantum computing threats.

6. Core Modernization - The Intelligent core: AI changes everything for core modernization

Integrating AI into core enterprise architectures triggers systemic changes aimed at enhancing user interaction experiences. While enterprises still rely on traditional systems, AI can seamlessly integrate, potentially redefining core data and business processes as data sources expand. Balancing the stability of traditional systems with the full release of AI's potential is a major challenge in the enterprise modernization journey.

More information: Tech Trends 2025

Q1 2025 Review and Outlook for Chinese Mainland & HK IPO markets

Amid challenges from the ongoing conflicts between Israel and Hamas and Russia and Ukraine, and the reciprocal tariffs set by the new US President, the global IPO market remained vibrant in Q1 2025, with a near 20% year-on-year increase in funds raised by the top 10 IPOs. A strong US dollar helped Nasdaq and New York Stock Exchange claim the top positions in IPO funds raised globally after India entered a bear market.

The A-share market slowed further amid continuous regulatory scrutiny of IPO candidates. Meanwhile, the Hong Kong market continued to pick up further with the support of large and medium-sized deals from Chinese businesses seeking international funds and boosting their brand eminence and globalization, backed by improved market liquidity, turnover and valuations. Amid various market rumours and the new trade policies of the US, we saw more Chinese companies list in the US this year.

In the remaining three quarters of 2025, it is anticipated that listings of high-quality, high technology and innovative companies will remain PRC regulators' priority. This will create a higher quality, healthier capital market in the longer run and is in line with the national government's work priorities for 2025. The country's support and emphasis on technology and innovative sectors will also present good opportunities for companies in these sectors to raise more funds in the capital market, boost their development and thrive.

The Capital Market Services Group maintains its forecast for the Hong Kong IPO market in 2025 at about 80 IPOs raising approximately HKD130 billion to HKD150 billion from large A-share issuers; leading Chinese companies; US-listed China concept stocks; Middle East and ASEAN companies; technology companies, particularly those in AI; and life science and health care businesses.

More information: Q1 2025 Review and Outlook for Chinese Mainland & HK IPO markets (Chinese version only)

China LSHC Industry Survey: 2025 State of Industry in China

Deloitte China Life Sciences & Health Care (LSHC) team has conducted the 6th annual ‘State of industry’ survey for the LSHC market in China during January 2025. This annual survey covers a number of areas and should be read as a ‘State of Industry in China’, as it covers performance, outlook but also business model and other operating processes changes needed to cope with our environment in China. Below we have extracted a few highlights.

1. China LSHC Business Outlook & Considerations

54% of companies had better 2024 business performance than in 2023. 60% met or exceeded plans (same as last year), but 40% underperformed. MedTech firms, compared to biopharma, significantly underperformed expectations. Shortening economic value cycles and pricing were key for stakeholders. Launching innovative drugs and technologies was a priority. The ‘going global’ strategy was important, with firms focusing more on business development.

For the 2025 outlook, just 6% anticipate business decline. However, MedTech firms have a notably different view, with nearly 14% expecting a downturn. Local players are the most optimistic, while foreign companies' expectations remain steady, with 65% forecasting growth above 5%. In detail, overall caution dominates. More foreign firms now see growth capped at 5%, compared to last year when over 10% growth was expected.

2. New Regulatory and technology impact

The survey again shows the regulatory framework is more crucial for local and foreign firms in China. Nearly half of respondents say it tightened in 2024, especially for large and local companies. Data privacy and export restrictions are making ‘China for China’ solutions more important.

Other key factors that impact every player in the value chain are proliferation of AI and smart technology. For SOEs and private firms, new tech use and global partnerships matter more than market access (like R&D funding).

3. Business investment shifts

The development of ‘new channels’ remains crucial for all stakeholders, especially for local players. As we are seeing intensified local competition as domestic innovation capabilities are elevating, we have also seen a wave of investments throughout the value chain. Around two-third of respondents have indicated to have increased R&D localization efforts, and over two-third of respondents have increased overall supply chain localization investment, particularly local players. As China continues to be a favourable investment destination given its market size, yet many are now adopting a more cautious approach.

Local players are seeking for new assets and partners under the ‘going global’ trends and higher commercial pressure. The ROI assessment for investments in China become increasingly crucial for all, ensuring the right R&D investment and import of ‘originally’ innovative assets are the top priorities.

4. Insights in Conclusion

Going forward crafting a more precise value proposition, becomes essential to win in the China market. Companies are exploring new value creation methods and embracing flexible partnerships and deal models, perceived as important to long-term success in China. All industry players in China, will need to reassess their market strategy, to develop a China-tailored approach for managing the lifecycle of innovative assets and ensure to strengthen digital capabilities, to fully utilize local smart technologies. This strategy refresh is critical and essential for presence in China.

More information: China LSHC Industry Survey: 2025 State of Industry in China

Expertise and Practice

Five Major Tax Trends Facing Enterprises in 2025

In the context of profound adjustments in the global economic landscape and intensifying geopolitical uncertainties, the tax environment for enterprises is undergoing dramatic changes. At the head of 2025, Deloitte China outlined five key tax trends of 2025, providing insights for senior executives. Recently, we have been closely monitoring and sharing insights on the dynamics of the U.S. 'reciprocal tariffs' and the latest developments in U.S.-China trade. It is our sincere wish that such sharing could assist with your strategic decisions in the complex and changing environment to achieve sustainable development.

Trend 1: Tax Inspection/Audit Becoming More Efficient and Increasingly Stringent

Tax authorities leverage big data and risk early warning mechanisms to enhance the efficiency of inspections and audits. Enterprises need to identify potential tax risks, establish a tax risk assessment and monitoring system, and conduct regular self-examinations. At the same time, they should make full use of digital platforms such as the Electronic Tax Bureau to promptly respond to data requests from tax authorities and reduce risks caused by information asymmetry.

Trend 2: Tax Advance Rulings May Serve as New Opportunities

For matters with significant tax impacts, enterprises can plan in advance and apply for tax advance rulings, especially in cities like Shanghai and Beijing where there are clear regulations. It is essential to communicate fully with tax authorities and formulate strategies. After obtaining the written ruling result, use it as the basis for tax planning, adjust the tax structure and transaction models, and pay attention to scenarios where the ruling may become invalid to reduce tax burdens and risks.

Trend 3: Tax Digitization and the Reform of Tax Collection and Administration Bring Challenges

With the in-depth promotion of digital tax collection and administration, associated indicators, micro or quantitative indicators are receiving more attention. Technical support such as big data and cloud applications is becoming more robust, and information interaction has become an important supplement to the evidence chain. Along with the changes in tax collection and administration methods and processes, the organizational structure of tax authorities is constantly being adjusted. Enterprises should take data as the foundation, models as the core, experts as the guide, mechanisms as the guarantee, and communication as the means to strengthen internal controls and processes, self-examine tax risks, use digital tax tools, and establish a good communication mechanism with tax authorities.

Trend 4: The First Peak of the Pillar Two Compliance Wave is Imminent

In the field of international taxation, Pillar Two is progressing rapidly. Most European countries and some Asia-Pacific countries implemented the Income Inclusion Rule (IIR) and the Qualified Domestic Minimum Top-up Tax (QDMTT) in 2024. Hong Kong and Singapore will also implement relevant rules in 2025. Some Chinese enterprises will face challenges in compliance, financial reporting, and tax planning. June 30, 2026 is the deadline for the first batch of Pillar Two tax declarations. Due to difficulties in data collection, system setup, etc., enterprises need to plan as soon as possible. 2025 is a crucial year for large multinational enterprises to prepare for declarations and planning. Enterprise managers should respond early and seek professional support if necessary.

Trend 5: The Resurgence of Tariff Turbulence

It is expected that tariff pressure will increase, affecting both international Chinese-funded enterprises and multinational enterprises that export back to overseas markets. In this environment, tax and finance professionals need to comprehensively understand the enterprise's supply chain, including products, place of origin, suppliers, etc.; conduct scenario-based calculations, track changes in trade policies and regulatory environments based on sand tables, and quickly adjust strategies; and make strategic adjustments to the global supply chain from a preventive, forward-looking, and holistic perspective.

More information: Five Major Tax Trends Facing Enterprises in 2025 (Chinese version only)

China’s Nine Ministries and commissions, Including MOF, Jointly Release Corporate Sustainability Disclosure Standards – Basic Standards

In December 2024, the Ministry of Finance, the Ministry of Foreign Affairs, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Ecological Environment, the Ministry of Commerce, the People's Bank of China, the State owned Assets Supervision and Administration Commission of the State Council, and the National Financial Regulatory Administration jointly issued the Corporate Sustainability Disclosure Standards – Basic Standards (Trial)  (hereinafter referred to as the ‘Basic Standards’). The basic principles are based on the actual situation in China, including the scope of application, disclosure objectives, materiality, and some technical requirements. On the other hand, it maintains overall alignment with the IFRS S1  in terms of information quality characteristics, disclosure elements, and related disclosure requirements. This indicates that China's sustainable disclosure standards are converging with international standards.

The basic principles specify that China's unified sustainable disclosure standards system consists of basic standards, specific standards, and application guidance. Among them, the basic standards mainly regulate the basic requirements for sustainability information disclosure of enterprises and govern the formulation of specific standards, and application guidance; Specific standards provide specific requirements for companies to disclose information on sustainability topics related to the environment, society, and governance; The application guidance provide sector-specific guidance to navigate enterprises in specific industry to identify and disclose material sustainability information, as well as interpretations and examples to basic standards, specific standards. Regarding the implementation of the basic standards, a phased-in approach will be applied, taking into account the development stage and disclosure capabilities of Chinese enterprises, expanding from listed companies to non-listed companies, from large enterprises to small and medium-sized enterprises, from qualitative requirements to quantitative requirements, and from voluntary disclosure to mandatory disclosure. Before the scope and requirements of implementation are specified, the basic principles are voluntarily implemented by the enterprise.

Deloitte's interpretation of the key points of the basic standards is as follows.

• The scope and connectivity of sustainability information. Sustainability information disclosure involves the upstream and downstream value chain of enterprises, covering the current and future short-term, medium-term, and long-term periods. In addition, companies should pay attention to the connectivity between sustainability information, sustainability information and financial statement information, and sustainability information and other information disclosed together with financial statements.
• Materiality. The basic standards require that sustainability information disclosure should be subject to the principle of materiality. Among them, the materiality assessment of sustainability risk and opportunity information should be based on the information needs of the basic users of sustainability information; sustainability impact information , for which the basic standards provide guidelines of impacts assessment, and should be disclosed based on specific standards and application guidance.
• Disclosure elements. For information on sustainability risks and opportunities, four core elements commonly used internationally are introduced: governance, strategy, risk and opportunity management, metrics and targets. For information on sustainability impacts, companies should disclose material sustainability impact information in accordance with specific standards and application guidance.

More information: China’s Nine Ministries and commissions, Including MOF, Jointly Release Corporate Sustainability Disclosure Standards – Basic Standards (Chinese version only)

Gen AI Digital Intelligence Frontier

Best Practices for SMEs to Integrate DeepSeek

With the rapid development of large model technology, numerous small and medium-sized enterprises are seeking practical AI application paths. DeepSeek, leveraging its cost-effective advantage and open-source inclusive strategy, is bringing AI technology into the homes of ordinary people. Based on continuous observation of the market, Deloitte issued the ‘Best Practices for SMEs to Expedite Implementation of DeepSeek’ (hereinafter referred to as the ‘report’), attempting to start from the actual needs of small and medium-sized enterprises, deeply analyze DeepSeek's innovative breakthroughs in reducing usage barriers, optimizing deployment solutions, and enhancing application efficiency, and provide practical application suggestions for enterprises by combining typical scenarios.

Innovations in inclusive deployment models and accelerated in-depth development of application scenarios are two significant trends currently in the application of DeepSeek. The report analyzes the current state of enterprise application, pointing out that domestic enterprises' application of large models is at a critical turning point: traditional large model applications are often limited by high deployment costs and complex technical thresholds, causing many small and medium-sized enterprises to hesitate. The emergence of DeepSeek has brought accessible AI application opportunities to a wider range of enterprises – the private deployment solution allows large enterprises to achieve scenario customization through open-source features, while the API quick access mode also benefits a broader range of small and medium-sized enterprises; from early general-purpose applications (such as intelligent customer service, document processing) to in-depth cultivation in professional fields, DeepSeek helps small and medium-sized enterprises establish differentiated advantages in their respective professional fields, forming a new paradigm of application with industry characteristics – specifically in representative industries such as finance, healthcare, and intelligent manufacturing, the report summarizes the three core advantages of DeepSeek in enterprise application: an open ecosystem, cost-effectiveness, and flexible deployment, based on some typical cases.

Figure: The Application Value of DeepSeek

Source: Deloitte AI Analytics

In terms of basic setup layout and multidimensional strategic deployment, the report points out that with the continuous evolution of DeepSeek technology, its deployment ecosystem is presenting an unprecedentedly open pattern. Particularly in February 2025, the widespread adaptation of national-level computing power support and mainstream cloud platforms formed a joint force, accelerating the promotion of DeepSeek's large-scale models in various industry scenarios, providing more robust technical support for enterprise intelligent upgrading. This multi-level infrastructure system has successfully built a complete technical chain from national computing centers to enterprise private deployment. Through technological innovation and resource integration, DeepSeek is creating an open, efficient, and inclusive artificial intelligence infrastructure ecosystem, laying a solid foundation for the next stage of industrial intelligence upgrade.

In addition to development opportunities, based on Deloitte's experience accumulated in helping numerous enterprises implement AI transformation, the report also focuses on potential security risks and challenges, reminding enterprises that they need to consider multiple dimensions such as data governance, model security, and talent development in a comprehensive manner. Enterprises should formulate contingency plans and ensure the safety of process projects through technical means to minimize risks during the application process.

More information: Best Practices for SMEs to Integrate DeepSeek (Chinese version only)

Talent and Development

Power to the people: Why CFOs may want to dramatically rethink their management style

Faced with continuous external risk challenges and internal growth pressures, many CFOs have increasingly become the collaborative leaders and initiators of strategic transformation within companies. The expansion of the boundary of this role presents new challenges to the leadership style of CFOs and the power structure of the company. In this context, Deloitte attempts to answer in its CFO Insights report ‘Power to the people: Why CFOs may want to dramatically rethink their management style’ (hereinafter referred to as the ‘report’) why it is the right time for CFOs to reshape their leadership style, adjust team power boundaries, and reshape internal organizational structures. This can better enable enterprises to adapt to the rapid changes in technology and society and provide guidance for releasing employee initiative and creativity.

Breaking away from the traditional leadership paradigm of command and control. The report first points out that many companies are stuck in traditional thinking patterns, focusing on extracting value from employees rather than empowering them to create value. Intricate reporting procedures and process arrangements hinder employees from making timely and correct decisions in response to market changes. Moreover, this mindset leads companies to neglect the personal growth of employees, thereby suppressing their future growth potential. According to Deloitte's 2024 survey, 76% of respondents recognize the importance of sustainable human capital, but only 46% have acted, and only 10% have achieved significant results. For CFOs, to adapt to the various changes in the external macro environment, it is necessary to break away from the traditional leadership paradigm of command and control, empower different teams, and provide resource guarantees to truly unleash growth vitality.

Starting with modular transformation. Modular settings can disperse decision-making to fully leverage information advantages, improve team collaboration efficiency, and lay the foundation for further structural transformation of the enterprise. To achieve this, the report proposes three actionable strategies that can be implemented first:

1. Create a common action framework: Replace mandatory bureaucratic management with a framework of principles and guidelines to enhance the initiative and creativity of front-line teams
2. Share key information: Establish a consensus on goals, standards, strategies, and backgrounds to truly achieve team collaboration
3. Redefine power boundaries: Empower teams to stimulate organizational vitality

The transformation of the management model depends on the personal transformation of the CFO. The report uses ‘love,’ ‘empathy,’ and ‘soul’ as keywords, indicating that CFOs need to focus not only on efficiency and control but also integrate more humanistic care. The new leadership model emphasizes challenging traditional thinking and encourages CFOs to pay more attention to interpersonal connections besides technical management. Inspire employees through real interaction and a sense of belonging. This transformation not only helps break the traditional ‘power control’ model but also balances employee autonomy and team cohesion. Although data analysis, scenario planning, and other technologies are still important responsibilities of CFOs, they also need to focus on team collaboration and interpersonal relationships, inspire shared values among employees, and promote corporate cultural transformation.

More information: Power to the people: Why CFOs may want to dramatically rethink their management style

If you have any enquiry, please contact:

Norman Sze
Vice Chair
Deloitte China
Phone: +86 10 8512 5888
Email: normansze@deloittecn.com.cn

Maggie Yang
Partner
Deloitte China Consulting Businesses
Phone: +86 10 8520 7822
Email: megyang@deloittecn.com.cn

Michael Jin
Partner
Deloitte China Consulting Businesses
Phone: +86 21 2316 6317
Email: mijin@deloittecn.com.cn

Bo Sun
Senior Manager
Deloitte China CXO Program
Phone: +86 10 8512 4866
Email: bsun@deloittecn.com.cn