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KPMG, one of the world's largest five accounting service firms, has mapped out an aggressive plan to expand its businesses in China's growing marketplace.
The two-pronged market expansion plan will be driven by two major features - a growth in the workforce and the opening of more offices in a bid to both meet customer needs and beat off the competition .
"We are confident that KPMG's business in China will grow by at least 20 percent in each of the coming 10 years," said Marvin Cheung, chairman of KPMG's Hong Kong and Chinese mainland operations.
Cheung has good reason to be confident. KPMG has performed well in China over the past two years, during which its headcount grew by over 50 percent. His view was echoed by Mike Rake, chairman of KPMG International, who told China Daily that "I expect that our China practice will continue to grow rapidly in both headcount and geography."
Rake, making his second visit to China, was in Shanghai last week to attend the KPMG international executive committee to undertake a review of its strategic direction and initiatives in the Chinese market. The gathering was also the first of its kind held in the country.
Rake said that KPMG's China-based operations will grow to become one of its largest member firms within the next 10 years. "China is strategically important to the future of our global business."
But the gains generated from Chinese market are still small compared with the firm's global earnings, which are dominated by Europe, the Middle East and Africa.
These regions contributed over half of KPMG's US$10.7 billion annual revenue for the fiscal year ending in September 2002. This represented a year-on-year increase of 3.9 percent, a good result for the ailing sector, which was dealt massive blows from a round of disclosures triggered by the collapse of a number of large US firms.
Cheung told that KPMG's workforce in China will grow from the current 2,500 to 10,000 by 2010, giving it one of the largest local networks of any transnational accounting firm based in China.
Rake added that the company also plans to increase its local network by boosting its presence in a number of cities, from coastal areas across to central and western China.
Cheung said the company is now preparing to file documents with the regulatory authorities which will give the green light for it to open more offices in China, although he declined to reveal which area will be the first to benefit from its expansion plan.
KPMG officially opened its first Chinese mainland office in Beijing in 1983, followed by offices in Shanghai in 1986, Shenzhen in 1993 and Guangzhou in 1996.
And in 1992, international accounting firms were allowed to establish joint venture accounting firms in China to perform statutory audits and other services. KPMG Huazhen, established in October 1992, was the first joint venture accounting firm in China.
Rake said KPMG's business will target two major groups of customers in China - local presence of transnational companies and large Chinese firms aiming for overseas growth.
Financial institutions, the area in which KPMG boasts greatest expertise, are where the firm expects to tap the greatest potential, said Cheung.
Backed by developed expertise in serving international giants, such as Citibank and Deutsche Bank, KPMG is watching out for business opportunities in China's changing financial institutions.
Its current major audit clients include China Merchants Bank, China Mobile and China Telecom.
(China Daily December 16, 2002)
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