American corporations recently paid particular attention to the development of the Chinese economy. Will the economy have a "soft landing"? Should investment in China be slowed down or kept up? What are the points for attention while investing in China now? What are the prospects of the Chinese economy? Bearing these questions in mind, People's Daily correspondent in the United Nations interviewed Mr. Joe O'Mara, a partner of KPMG, the first international accounting firm that entered China.

No one doubts investment opportunities in China

Mr. O'Mara speaks standard Chinese fluently. A native of America, he can be counted as a half-Beijinger after living in the Chinese capital for more than a decade.

China is developing too fast, said O'Mara, and one simply can't know the tremendous changes of today compared with even two or three years ago if he is not a long-term worker there. In its recent survey on investing in China, KPMG sent detailed questionnaires to 100-odd European and American big corporations investing in China, and talked with them face-to-face. The result showed that these investors held almost the same opinion on the Chinese market��after China's WTO accession, foreign direct investment will keep rising and coming to China for investment has become an international trend; China is still a huge market with its economy full of vigor, and no one doubts about business opportunities in the country.

Mr. O'Mara believes that the economic environment in China is unique and changing rapidly, so his biggest advice to those who want to invest in China is to learn modestly. For example, one needs to know China's special culture and inter-personal relationships. However, along with the development of marketization of China's economy and the gradual perfection of the legal system resulted from the country's enactment of many economic laws, one cannot rely completely on relations in making investment in China. O' Nara told many people who came to the firm for advice that American companies investing in China usually make two mistakes: One is because they don't understand the vastness of the Chinese market and regional differences, they focus their attention only on several big cities and thus often miss good opportunities for investing in other regions; second is they underestimate the competitiveness of local Chinese companies. Chinese entrepreneurs are noted for their spirit, which has been given full play since the start of reform and opening up two decades ago and has won praises even from Bill Gates. However, there are still big chances for investors to make money in China, that's why the country can attract so many foreign corporations.

From 50 to 4,000 working staff

O'Mara takes his personal experience in Beijing and KPMG's development in China as an example of the success of foreign firms. He came to China in 1992 when KPMG entered China with 50 staff members, the first of its kind in the country. At that time they could only serve foreign companies since China had not established its modern accounting system and laws in line with international standards. Later they helped the Ministry of Finance to formulate accounting laws and train personnel, as well as a modern accounting system in big banks and enterprise��such as the Industrial and Commercial Bank of China, China Construction Bank and China Power Corporation. KPMG's own business also expanded when it set up offices in Shanghai, Guangzhou, Shenzhen and Foshan and its services also extended to accounting, taxation, consultation and auditing. Now half of KPMG's clients are Chinese firms. The success of KPMG is also a success of China, said O'Mara, adding it's a keen feeling of his after working many years here.

O'Mara thinks that KPMG has a promising future for its development in China. On one hand, the prospect for China' economic development is bright, he said, it is estimated that in the coming five years many large Chinese companies will enter the international market and become transnational corporations in petroleum, telecom and other high-tech fields. They need services from KPMG. On the other hand, China's resources of talents are getting richer and richer. He spoke highly of the quality of China's university graduates. He said that present graduates are able to start work after three-week training, whereas in 1995 they needed to receive three-month training, this helps his firm greatly reduce investment cost in the country. Currently KPMG has a total staff of 4,000 in Chinese inland and Hong Kong, 1,000 of them being enrolled this year. Furthermore, most KPMG's partners and managers in China are Chinese, with the number of partners alone approaching a hundred.

By People's Daily Online