KPMG set to double workforce in China

Updated: 2012-04-17 14:11

By Hu Yuanyuan in Shanghai (China Daily)

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KPMG International Cooperative, one of the world's four biggest accounting firms, plans to double the size of its Chinese workforce to 18,000 employees within four years, the global chairman of the company said on Monday.

"China is probably the country we've made the biggest investment in," said Michael Andrew, global chairman of KPMG International. He is attending the firm's global board meeting in Shanghai this week.

KPMG set to double workforce in China

"We will continue to increase our headcount and set up new offices in emerging cities this year."

According to Andrew, KPMG invested more than $200 million in China in the past decade.

The company's revenues in China increased by 12.9 percent in 2011, slightly more than the 10.1 percent recorded for KPMG's global operations.

"While in the past six months, our China business grew at 12 percent, compared with 8 percent globally," Andrew added.

Despite current forecasts that say China's economy will slow, Andrew said KPMG's China business will continue to grow at a pace that is consistent with what it has seen in recent years. He also said Chinese businesses' expansion overseas will be a driver in that growth.

Last week in a quarterly report, the World Bank lowered its forecast for China's 2012 economic growth rate, saying it may dip to a 13-year low. The organization now predicts that the country's GDP will grow by 8.2 percent this year, rather than the 8.4 percent rate it had predicted in January.

To meet the demand arising from Chinese businesses' overseas expansion, KPMG introduced its Global China Practice in September 2011. The organization, Andrew said, helped the firm achieve 18 percent growth in revenues in the past half year.

So far, KPMG has introduced its Local China Practice - a team consisting of Chinese staff workers - into 43 countries. Their mission will be to offer better services to Chinese businesses that are going overseas.

Two decades ago, KPMG established a similar Global Japan Practice to support Japanese companies' overseas expansion and saw success.

Although KPMG is seeking merger and acquisition opportunities globally, the company now has no plans to buy local companies in China, Andrew said.

"We usually prefer to expand our business via M&As in mature markets," he said. "But in China, we have had plenty of opportunities to grow organically."

KPMG last year acquired EquaTerra, a US-based advisory firm which has strength in outsourcing services. It is also in negotiations about acquiring other international accounting firms, potential deals that Andrew declined to discuss in detail.

Besides adding to its workforce, Andrew said, KPMG plans to open three offices this year in China. He declined to say where they will be.

Last year, the firm opened no new branches in the country.

Stephen Yiu, chairman of KPMG China, said the company will concentrate on auditing, tax and advisory services in the next five years.

Auditing and tax services now make up about 70 percent of KPMG's business, and advisory services, a rapidly growing unit, has undergone double-digit percentage growth annually in recent years.

"We are expecting to see soaring revenues from our advisory services, such as consulting for M&A, outsourcing, cost minimizations and business transformation," Yiu said.

Meanwhile, KPMG is striving to become a local firm and has a goal of having 80 percent of its business partners being local in the next three or four years, Andrew said.

To further strengthen its commitment to the Asia-Pacific region, KPMG set up its international chairman's office in Hong Kong in October.

It was the first accounting firm among the "Big Four" to move a company chairman into the region.

About 20 percent of KPMG's revenue now comes from the Asia-Pacific region.