Firm sets its sights on international markets after linking up with European counterpart

Chinese accounting firm Zhongshen Zhonghuan is looking to explore the international markets in a big way after linking up with its European counterpart Mazars Group recently, according to a senior member of the firm.

Mazars has established a global presence, including 290 offices and 18,000 employees in 79 countries and regions, and its proficiency in international financial law and tax policies will help Zhongshen Zhonghuan provide better services to Chinese companies planning outbound investment, says Zhang Liwen, a member of the firm's management board.

"Tax policies between each country differ a lot, and tax services are one of the most sought-after services when companies look for global expansion," says Zhang.

"Now we can provide Chinese companies with localized tax services through Mazars' offices in 79 countries and regions. We are positioning ourselves not only as a domestic audit firm but as an international player. We can use Mazars' advantage in the banking and insurance sectors to help Chinese companies with overseas expansion," she says.

The linkup follows the Ministry of Finance's recent statement urging Chinese audit firms to embrace global practices.

"The Chinese audit industry needs to catch up while Chinese companies are actively involved in outbound investment," Zhao Mingji, an assistant minister of finance, said during a recent seminar. "The industry needs to make its voice heard on the global stage."

Outbound investment has been upgrading from energy and infrastructure to new energy, high-tech and other services, according to Zhongshen Zhonghuan.

"State-owned enterprises have been leading in outbound investment, especially after the Belt and Road Initiative was initiated," Zhang says. "The country has called for further opening-up, and the private sector will follow the same path as SOEs. We have already seen companies like Huawei and Xiaomi mapping out their international expansion strategy," she adds.

Zhang says there are many investment opportunities in the economies involved in the initiative, especially in Africa and Southeast Asia. Apart from infrastructure projects that mainly concern SOEs, there is tremendous investment potential for the private sector in service industries, she says.

Shi Wenxian, chief partner of Zhongshen Zhonghuan, says, "The private sector is looking for more mergers and acquisitions and green investment in international markets."

Shi adds that the opportunity for growth comes not only from companies going global, but also from the transfer of government functions.

"The Chinese government has shifted its focus to provide better social services and administration and it is more than willing to hire third parties, including audit firms, to do financial tasks such as budgeting," he says.

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(China Daily European Weekly 11/17/2017 page27)