A Chinese firm is seeking to expand
through Asian mergers in order to cement its position among the
nation’s largest domestic firms.

The Reanda Group plans to capitalise on a
government policy to develop 5 to 10 ‘super big’ domestic
accounting firms within the next decade. It is planned that these
super firms will eventually challenge the Big Four for supremacy in
China and grow their operations internationally.

Typically, global mid-tier networks have been
partnering domestic Chinese firms in order to grow, but this is an
example of a Chinese firm branching out.

The Reanda Group’s founding member is Reanda
Beijing, a firm with about 700 staff. Reanda Beijing was a BDO
member firm in China until about three years ago. When the two
organisations split, the Chinese firm decided to follow government
encouragement to grow and become international.

The Reanda Group has been actively looking for
new additions in recent years. The group has about 1,700 people in
16 branch offices, covering most of China’s major cities.

In 2008, the group’s combined fee income was
about CNY310 million ($47.5 million); the Beijing firm contributed
CNY140 million. The 2008 figures would have made the Reanda Group
the ninth-largest mid-tier organisation in the International
Accounting Bulletin’s
China survey. The largest was RSM China
with revenue of CNY601 million.

The Chinese government hopes each ‘super big’
firm will grow to annual fee income of CNY3 billion, which is about
the average size of the Big Four in China at present.

One recent addition to the Reanda Group was a
member firm in Hong Kong, which will help the group develop an
international network.

The Hong Kong member is a joint venture
between Reanda and local firm Lau & Au Yeung CPA. It is called
Reanda Lau and Au Yeung CPA and operates from the same offices as
Lau and Au Yeung CPA.

Lau & Au Yeung CPA has six partners and
about 100 professionals. In 2008, the firm had turnover of HK$33
million ($4.26 million).

The firm is a founding member of the Elite
Federation of Accountants (EFA) Network, which has been morphed out
of loose affiliation between Lau & Au Yeung CPA and firms in
Singapore and Macau, as well as one of Reanda’s branch offices,
Reanda Zhuhai. The arrangement has caught the attention of Reanda
Beijing but it is unclear whether this firm will join.

“Because we have the spirit to go overseas
through this EFA concept, they thought we were the right partners
to help them to develop the Reanda network overseas,” managing
director Franklin Lau explained.

An international name for the new network has
not been finalised, but it will most likely include the prefix

Lau said the new organisation has been in
contact with firms from countries including Vietnam, Malaysia,
Brunei, Indonesia and Thailand. The response has been positive.

“After we complete the Asian region’s
affiliation, we will see whether we can go out and talk with firms
in the Western countries,” Lau said.