TAKEAWAYS
Having embarked on my professional journey with PwC China in 2004, my career has been a whirlwind of growth and dynamism.
The first decade of my tenure was characterised by the restructuring of Chinese state-owned enterprises (SOEs), and facilitating their overseas initial public offerings (IPOs). Driven by the need of local SOEs to align with global standards and attract international capital, the drastic evolution of the Chinese economy could truly be said to have begun around that time.
Working closely with SOEs, I witnessed firsthand the complexities and challenges of navigating regulatory landscapes, cultural nuances, and market expectations. A classic example is the variable interest entity (VIE) structure adopted by most of the Chinese enterprises, given that there are regulatory restrictions of foreign ownerships in certain industries. The VIE structure warrants extensive disclosures to explain the complexities and risks involved to the stock exchanges and foreign investors. Each successful IPO was a testament to our ability to harmonise Chinese corporate practices with international investor demands, and ultimately contributing to China’s economic ascension.
Transitioning into the next decade, my focus shifted towards the sector of privately owned enterprises (POEs) primarily in the technology, media, and telecommunications (TMT) arena. This was a period of exhilarating growth and rapid innovation as TMT, fintech, and e-commerce companies began to leverage the global capital markets.
Working with these agile and ambitious enterprises was both challenging and rewarding. The pace of technological advancement and the constantly evolving regulatory environment required a deep understanding of both local and international accounting standards. These IPOs were not just financial transactions but pivotal moments that defined the future trajectories of these companies.
Today, despite the economic slowdown in China, there remains numerous opportunities for professional accountants. The appetite for capital among privately owned enterprises is undiminished, driven by their need to scale and innovate. Furthermore, the constantly evolving international accounting standards also present a unique opportunity for accountants to specialise and stay ahead of the curve.
Here are some key pieces of advice for anyone interested in the Chinese market:
1) Stay informed and be ready to adapt
The financial landscape is perpetually changing. Stay ahead of the latest developments in international accounting and regulatory changes. Continuous learning and adaptation are crucial to maintaining relevance and expertise.
2) Cultural competence
Understanding the local Chinese market, including its business culture and methods, is indispensable. Building strong relationships and trust with Chinese clients requires a nuanced appreciation of their business ethos and practices. In fact, I personally believe that no business can be conducted without first building a relationship, especially in the context of Chinese clients.
3) Focus on emerging sectors
The next wave of growth will be and has been driven by technology and, in recent years, by generative AI. Position yourself in sectors like these that are poised for growth and innovation. Understanding these industries’ specific accounting and financial needs will always provide you a competitive edge.
4) Global perspective
While a deep understanding of the local market is essential, maintaining a global perspective is equally important. The ability to navigate international markets, understand cross-border financial practices, and manage multinational clients will significantly enhance and propel your career.
As we look forward to the next decade, the role of professional accountants will continue to be pivotal in guiding this new wave of competitive and resilient enterprises. These companies are set to lead the charge in technological innovation and smart manufacturing. To seize these opportunities, accountants must equip themselves with a robust understanding of both international and local markets, blending technical expertise, cultural awareness, and accurate foresight.
You Der Hua, CA (Singapore), is Assurance Partner, PwC China, and Chairperson, ISCA Beijing Chapter.
© 2024 Institute of Singapore Chartered Accountants