The largest mainland China professional services firm outside
the Big Four has joined the RSM International network. Zhongrui
Yuehua Certified Public Accountants (Zhongrui Yuehua) reported
annual revenues of about CYN500 million ($70.7 million) in 2007.
The firm has 2,600 staff, including more than 1,000 CPAs and 51
partners.

Zhongrui Yuehua has 19 offices across mainland China and is
headquartered in Beijing, where it has 900 staff.

The addition means RSM International now has the largest coverage
of any mid-tier network in Greater China, which includes Hong Kong
and Taiwan, according to IAB’s recent China survey
(see issue 423). The combined fee income for RSM firms is
about CYN647.6 million and the total work force includes 3,018
staff and 74 partners.

RSM International chief executive Jean Stephens told IAB
discussions with Zhongrui Yuehua began six months ago. “We have
been quite thorough going into China to make sure we find the right
partners and the right firm for us. We are delighted to be
welcoming this firm,” Stephens said.

“In the past, RSM has been serving mainland China clients through
our Singapore and Hong Kong offices but this brings us a whole
different level of resources. It brings full national coverage in a
market that is absolutely critical for us. It increases our ability
to serve those larger clients coming out of China, which is quite
interesting as we grow and develop. It also gives us the national
coverage and level of quality to be able to serve our clients as
they have needs in China.”

Zhongrui Yuehua chairman Gu Renrong described RSM membership as a
“major development” for the firm. “Joining RSM ensures we are well
placed to continue growing our international client base and expand
the proportion of listed and foreign investment enterprises,” he
said.

China’s fifth-largest firm is the result of a merger between China
Rightson and Yue Hua in December 2007. Prior to that, Horwath
International member firm Shulun Pan CPAs was acknowledged as the
largest firm outside the Big Four.

RSM International chairman of the Asia-Pacific region Poh Weng Wong
told IAB Zhongrui Yuehua is strong in the aviation, energy
and steel sectors, and has a client base that includes more than
100 public companies and several enormous state-owned enterprises.
Among the firm’s clientele are China Aviation, military supplier
China North Industries, the Chinese power grid group and several
steel mills. Wong explained that the sheer size of some of Zhongrui
Yuehua’s clients means that inward referral work is less likely to
impact on the firm’s revenue stream then outward investment.

He predicts RSM membership should also help to protect the firm’s
Chinese client base. “The clients are very large companies and when
they go overseas to be listed in Hong Kong or elsewhere they tend
to lose out to the Big Four. So they reckon [entry into RSM] will
help to retain their client base and as result will also help them
to continue to grow.”

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As part of the recruitment process, Stephens and Wong have been in
discussions with the Chinese government and the Chinese Institute
of Certified Public Accountants about RSM’s plans in the country.
Both said they were encouraged by the official support shown
towards these ambitions. The addition of Zhongrui Yuehua is a sign
that RSM plans to become one of China’s Big Ten.

Over the next three to five years, Zhongrui Yuehua plans to double
revenue by growing at least 20 percent each year. It also plans to
boost its tax and consulting arms to 40 percent of the total fee
split.

Arvind Hickman