PwC is bullish on investing in China
By Zhang Fengming |
October 31, 2011, Monday
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Print Edition
Print Edition
PWC will continue to invest in China and won't cut its exposure to Chinese companies seeking overseas listing despite the dilemma that "have caught auditors in the middle" between United States and Chinese regulators over allegations of fraud at US-listed Chinese corporations.
The world's biggest accounting firm by revenue will open five new offices in China in five years to bring its total to 20 and also expand its employee numbers to ride on the country's growth, Dennis M. Nally, chairman of PricewaterhouseCoopers International Ltd told Shanghai Daily in an interview in the city on Saturday.
"To deal with what we consider to be the opportunities here reflecting clients' base, we are adding our investment in China significantly," he said.
The London-headquartered firm will hire another 3,000-plus employees in China in the fiscal year ending June 30, 2012, including 2,000 new university graduates and 1,000 experienced personnel.
That was more than 10 percent of the firm's global recruitment plan of 20,000 new graduates and 5,000 experienced staff.
Its plan is in contrast with the chilly winter the "Big Four" firms faced in the financial crisis of 2008 when layoffs, salary freezes, and no-pay holidays were common in China despite the country's economic growth. The firm has a 16 percent turnover rate globally.
Indeed PwC's confidence to keep investing in China comes when suspected frauds at US-listed Chinese companies have raised questions about corporate governance in China.
A US federal court has already ordered Deloitte Touche Tohmatsu, another Big Four auditing firm, to hand over records on software company Longtop Financial Technologies, a former client.
Deloitte said it could not produce the requested documents without approval from the Chinese regulatory authorities. Auditors were caught in the middle as both US and Chinese regulators have their own policy regarding scrutiny of documents.
Last week, Reuters reported that China's financial regulators have reportedly asked the world's biggest audit firms, including PwC, to urgently review their work on US-listed Chinese companies and provide detailed information they may have provided to overseas regulators.
Despite the crossfire Nally said PwC won't scale back its exposure in China.
"It's not a matter of cutting down exposure," Nally said. "It's a strategy who we do business with, how we deliver our quality services into the marketplace. These are the choices we make every single day. We are working with clients who share the same value with us."
Nally said that ''we respect and welcome regulators' moves that are aimed to protect investors.
He hoped that in due course ''we are going to see collaboration or cooperation among regulators that will be good for all capital markets. That's a real challenge."
Nally didn't forecast when PwC will see its global revenue rebound to the years before the 2008 global financial crisis.
He said the emerging markets may account for 42 percent of the firm's revenue in five years, from 21 percent now, amid the "West-to-East" global economic rebalancing.
He cited opportunities offered to provide takeover services and consultancy from the growing mergers and acquisitions inside and outside of China.
The firm's revenue from advisory services jumped 20 percent to US$7.5 billion in the last fiscal year ended June 30, 2011, while income from its accounting services rose 7 percent to US$14.1 billion. The company's global gross revenue gained 10 percent to US$29.2 billion.
The world's biggest accounting firm by revenue will open five new offices in China in five years to bring its total to 20 and also expand its employee numbers to ride on the country's growth, Dennis M. Nally, chairman of PricewaterhouseCoopers International Ltd told Shanghai Daily in an interview in the city on Saturday.
"To deal with what we consider to be the opportunities here reflecting clients' base, we are adding our investment in China significantly," he said.
The London-headquartered firm will hire another 3,000-plus employees in China in the fiscal year ending June 30, 2012, including 2,000 new university graduates and 1,000 experienced personnel.
That was more than 10 percent of the firm's global recruitment plan of 20,000 new graduates and 5,000 experienced staff.
Its plan is in contrast with the chilly winter the "Big Four" firms faced in the financial crisis of 2008 when layoffs, salary freezes, and no-pay holidays were common in China despite the country's economic growth. The firm has a 16 percent turnover rate globally.
Indeed PwC's confidence to keep investing in China comes when suspected frauds at US-listed Chinese companies have raised questions about corporate governance in China.
A US federal court has already ordered Deloitte Touche Tohmatsu, another Big Four auditing firm, to hand over records on software company Longtop Financial Technologies, a former client.
Deloitte said it could not produce the requested documents without approval from the Chinese regulatory authorities. Auditors were caught in the middle as both US and Chinese regulators have their own policy regarding scrutiny of documents.
Last week, Reuters reported that China's financial regulators have reportedly asked the world's biggest audit firms, including PwC, to urgently review their work on US-listed Chinese companies and provide detailed information they may have provided to overseas regulators.
Despite the crossfire Nally said PwC won't scale back its exposure in China.
"It's not a matter of cutting down exposure," Nally said. "It's a strategy who we do business with, how we deliver our quality services into the marketplace. These are the choices we make every single day. We are working with clients who share the same value with us."
Nally said that ''we respect and welcome regulators' moves that are aimed to protect investors.
He hoped that in due course ''we are going to see collaboration or cooperation among regulators that will be good for all capital markets. That's a real challenge."
Nally didn't forecast when PwC will see its global revenue rebound to the years before the 2008 global financial crisis.
He said the emerging markets may account for 42 percent of the firm's revenue in five years, from 21 percent now, amid the "West-to-East" global economic rebalancing.
He cited opportunities offered to provide takeover services and consultancy from the growing mergers and acquisitions inside and outside of China.
The firm's revenue from advisory services jumped 20 percent to US$7.5 billion in the last fiscal year ended June 30, 2011, while income from its accounting services rose 7 percent to US$14.1 billion. The company's global gross revenue gained 10 percent to US$29.2 billion.
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