EY Counts on Quick Mainland ExpansionErnst & Young, one of the top international accountancy firms, will merge its operation in Shanghai with the mainland's biggest domestic accountancy firm to fuel its ambitious expansion plan on the mainland, in view of the hunger for professional services upon the market's further opening-up.EY is expecting to get the green light for forming a joint venture with a Shanghai-based firm in the first quarter next year, said Anthony T.Y. Wu, chairman of the Ernst & Young China. EY's Shanghai business is a branch of its Beijing-based joint venture, the Ernst & Young Huaming CPA. The merger will help solve the No 1 concern of EY in its expansion on the mainland by bringing in a few hundred staff members, Wu said. "It takes too long to enrol your own staff," he said. The same kind of merger in some other major mainland cities is being considered, he said, adding, "As long as we can find satisfactory partners, this kind of model will prove a quick way for expansion." Another move for expansion would be to upgrade the representative offices on the mainland into branches. EY has representative offices in Guangzhou, Shenzhen and Chengdu. Foreign accountancy firms will be allowed to have multiple branches on the mainland after China joins the World Trade Organization (WTO), Wu said. The present restriction has brought much inconvenience since representative offices are not allowed to conduct commercial business. China's entry into the WTO will create more demand for auditing, tax and corporate advisory services, with multinationals increasing their business on the mainland, domestic companies seeking larger presence overseas and more mergers and acquisitions in consolidation of large State-owned enterprises. EY launched a corporate finance venture early this month before obtaining licence for sponsoring from the Securities and Futures Commissions of Hong Kong. The venture covers mergers and acquisitions, listing work in Hong Kong and transaction execution. The market, still unfamiliar with professional services, would also grow with increasing adoption of international standards by local accountancy firms, whose niche would be small and medium-sized companies, Wu said. Wu estimated that the market, mainly driven by multinationals at present, is worth several billion Hong Kong dollars per year. EY's staff on the mainland is soon expected to equal that in Hong Kong, its regional headquarters. EY employs about 1,500 in Hong Kong and 600 on the mainland. The company has recruited 110 on the mainland and 170 in Hong Kong this year. Though handsome returns are expected, the cost at this stage of expansion will also be high, Wu said. Besides input for technology and research, investment in staff training will account for half of the total investment on the mainland, which has been tens of millions of Hong Kong dollars per year in recent years, or about 5 per cent of the annual turnover on the mainland market. "Ernst & Young sees its business on the mainland as long-term investment," Wu said. It will carry on its continuous training policy in its localization strategy. About 95 per cent of its mainland staff are local. Souce: chindaily.com.cn |
| People's Daily Online --- http://english.peopledaily.com.cn/ |