China's status prominent at 'Big Four' firm Ernst & Young
Updated: 2014-10-09 13:00
By Zhang Yuwei in New York(China Daily USA)
When Stephen Howe talks about a trip he made as a college student at Colgate University 30 years ago, he still describes it as "fascinating".
"It was in January 1983, the study group visited 10 cities in China," recalled Howe, who now serves as the Americas' managing partner for Ernst & Young LLP, one of the world's largest "Big Four" auditing firms, headquartered in London.
"It was really exciting to be there," said Howe, who will receive an international leadership award by the China General Chamber of Commerce-USA on Thursday.
During Howe's 30-plus year career at the firm, the China connection that he forged as a student has helped him understand the world's No 2 market from a "different perspective".
"It has given me more perspective on just how far China has come, and it gives me some pride to remember being there so many years ago," Howe said.
Like many multinational firms, Ernst & Young's China story is expanding as the company focuses more on the rapidly growing market.
"You need to have a sustained focus on China. Companies should not just go visit; they need to make sure they are going to have the investment, the consistent focus to watch China continue to change and to build relationships," said Howe.
China's economic growth has boosted Chinese companies' confidence to tap into the overseas markets. Chinese investment in the US totaled $6.7 billion in 2012, according to Rhodium Group, a consulting firm that tracks overseas Chinese investment. That has made Ernst & Young put more efforts - including building talent at its own firm - to better serve the growing number of Chinese customers in China and in the US.
"We are very focused on this because we see that as a trend that will continue," Howe said. "What we are doing about it is trying to be investors in China in all industry sectors, in relationships with Chinese companies' headquartered there, and then we are investing in talent here in people who can continue to help here with inbound Chinese investments."
Among the several thousand staff members whom Howe oversees, he remembers his Chinese colleagues' names by heart and could pronounce them in perfect Mandarin pinyin.
Shau Zhang, a tax partner with the firm, is one of those employees. With 10 years of service at Ernst & Young in the US, she has helped build a good number of Chinese clients for the firm. "The client base is growing," she noted.
"Over the next five to 10 years, Chinese investment in the US is going to be growing dramatically," Zhang said.
"Chinese companies want to become global players in the global economy, so it comes as a natural movement for them," Zhang added.
Chinese investment in the US doubled last year, driven by large-scale acquisitions in food, energy and real estate, according to the Rhodium Group. Among those deals, private firms started to take off in investment - accounting for more than 80 percent of transactions and more than 70 percent of total value.
"Clearly, we are seeing the investments in multiple industry sectors, so I think the visibility of the companies and brand-building probably needs some more focus," Howe said.
Zhang said investment is only the first step; it takes time for a foreign company to become a "local corporate citizen in the US and truly become a US company and compete with local peers".
To reduce this gap with local firms and well-established Western brands, the Chinese companies should spend more time with local communities and get involved in community service and become "truly local", Zhang noted.
Howe said gaining local trust is key for the Chinese firms to be successful in the US.
"Many of them have been here for a short period of time, but they are making good progress in terms of winning business opportunities and making investment," Howe said.
(China Daily USA 10/09/2014 page2)