China's race for finance expertise.
What does the People’s Republic of China need most – the Olympic Games or many thousands of accountants? The answer is probably both, although the accountants will need to arrive before the games. The target is 300,000 of them.
The drive to transform the Chinese economy and join the World Trade Organisation is creating a growing demand for financial reporting to international standards. China will not be a place for quick profits, but the concept of the market is well established and recent research shows that companies there have a strong record in complying with international accounting standards. Indeed, in terms of presentation, measurement and disclosure, China achieves the highest level of compliance of all the 32 countries (apart from Switzerland) that have adopted the standards.
The proper adoption of IAS is a good yardstick of progress. Once issues like over-manning, out of date IT, unstable stock markets and an inadequate road system have been resolved, the Chinese economy will be as dynamic and market-oriented as any in the West.
The whole economy will not pull up to the same standard at the same time – the coastal cities are much more developed than the interior – but the opportunities for inward investment will be there. Notwithstanding economic downturns in the US, China’s main export market, and in a number of China’s neighbours, we are likely to see a great deal of investment in the country by companies of all sizes, not just multinationals.
A major source of the accounting expertise necessary to support this investment is clearly the Hong Kong Special Administrative Region – where ACCA now has 40,000 members and students. This is because accountants who want to work in China must be people who understand the Chinese languages, culture and business environment. There is growing enthusiasm among Hong Kong accountants for working in mainland China.
Hong Kong cannot, however, meet the demand all on its own. Mainland China must ‘grow’ its own expertise. ACCA has nine training centres around the country and the quality of the Chinese students is such that in the last few years China has produced several of our world prizewinners.
When we first began to run training courses in Beijing, Guilin and Jinan in 1991, relatively few people who had worked as accountants in the period before the Cultural Revolution had been exposed to commercial accounting and auditing techniques. There was a huge amount of ground to make up. When you go to the new National Accounting Institutes now and look at their facilities and their plans, you can only be impressed by what has been achieved in a relatively short period of time.