An expansion of integrated consulting services in China is being plotted by global accounting giant Andersen in a pre-emptive move to snap up market share.
Joe F Berardino, managing partner and chief executive officer (CEO) of Andersen, said the firm was turning its business focus to China for the foreseeable future.
During a visit to Beijing this week he said Andersen's business in China has seen rapid progress in recent years with chances for further development now the nation has been admitted to the World Trade Organization (WTO).
Andersen has been active in the Chinese mainland since 1979.
It has set up six representative offices in the Chinese mainland, which has become its second large market following Japan in the Asia-Pacific Region, and more than half its mainland clients are local enterprises.
Its reputation in China stems from its batch of professionals and rich experience in accounting, tax, assurance and corporate finance which formed the basis for Andersen's business expansion into the counsultancy field.
During this fiscal year (from September 1, 2000 to August 31, 2001), global revenue for Andersen totalled US$9.3 billion with 15 per cent to 20 per cent from its consulting business. The growth rate for consulting sector has exceeded the average rate of Andersen.
On the Chinese mainland, Andersen rendered an estimated US$68.217 million in this fiscal year -- up US$51.412 million on the last fiscal year.
"After China's entry into the WTO, the need for a high-quality consulting service is expected to surge," Berardino said.
"This will help Chinese companies stay in line with international practices, upgrade their performances in the global market and enhance their operational efficiency."
He predicted demand for capital, human resources and structure improvement solutions will merge.
"China's accounting system is not fully in accordance with world rules to date, which is a challenge for the country after its accession to the WTO," Berardino said.
Lack of transparency and uncompleted supervision mechanisms were listed as top problems for China's current system.
"It should adopt international practices, such as board members and powerful supervision mechanisms to strengthen investor confidence in the market," Berardino said.
The CEO also warned that WTO entry will be good for China, "but not good for everybody in China."
(China Daily November 14, 2001)
