KPMG CHINA Assist state-owned enterprises to enter the international capital market

As the first international accounting firm in China’s mainlandto be approved to operate as a joint venture, KPMG China provides professional services in auditing, taxation and consulting. During the reform and opening-up, KPMG has helped a large number of outstanding state-owned enterprises to establish a modern corporate system in line with the operation of the market economy, in order to enhance their international competitiveness. On November 8, 1993, KPMG made Shanghai Petrochemical the first international listed company in China to be listed in Shanghai, Hong Kong and New York, and the first H-share company to be listed on the New York Stock Exchange, proving that state-owned enterprises are also able to comply with the strictest disclosure and application requirements of the global capital market.

The story of listing goes back to 1992 when Deng Xiaoping, the chief designer of reform and opening-up, delivered a speech during his inspection tour of South China. In such a context, KPMG’s Chinese pioneers learned that the country had first listed 35 companies, of which nine would be picked up to go public overseas. Shanghai Petrochemical, with the numerous categories of business and the most complex capital restructuring, came to KPMG. However, the audit team encountered a big problem: the accounting system of the state-owned enterprises in China was completely different from that of the countries and regions they are familiar with. The accounting systems of planned economy and market economy are different. To resolve that problem, the team invited three senior accountants from a Chinese firm to participate in the project. The three accountants previously worked in the Ministry of Finance and were familiar with the accounting system of planned economy. During that process, KPMG learned the complete accounting system adopted by China at that time. For a long time afterwards, the blueprints of the prospectus needed for Chinese companies to list overseas came from the Shanghai Petrochemical Project.

In addition to helping Chinese companies go global, KPMG has also introduced many outstanding foreign companies into China, such as GilletteandMotorola.