Page 226 - 2016_WhitePaper_web
P. 226
6 White Paper on the Business Environment in China
2.9 Services
The service sector, often denoted as tertiary in- the contribution of the Mainland’s service sector to overall
dustry and involving the trade of non-tangible goods such GDP from 43 to 47 percent.7
as accountancy, advertising, financial, legal and information
technology services, is enjoying greater emphasis from both the Reuters observes that “One caveat to development is the
government and the private sector as China moves gradually need for a liberalized financial sector, making it easier for non-
away from the manufacturing that has characterized its first 30 state firms and more small- and medium-enterprises to raise
years since “opening up.” funds via bank loans or the financial markets.”8
Vice Premier Wang Qishan was explicit in this emphasis in According to China’s National Bureau of Statistics (NBS),
his welcome remarks to the International Investment Forum the total added-value achieved by the nation’s service sector in
2008 at the China International Fair for Investment and Trade 2009 surpassed 13 trillion yuan. This estimate was, in fact, a re-
(CIFIT), held annually in Xiamen between September 8 and vision of earlier reports placing the total at approximately 12
11, offering that “FDI will be encouraged to flow into high-tech trillion yuan.9
industry, modern agriculture, energy-saving and environmen-
tal-friendly industry, modern services and service outsourcing Illustrative of the service sector’s continuing progress is the
businesses.”1 recent history of accountancy in China. As related by Vice Min-
ister of Finance Jun Wang in 2006 to the 17th World Congress
Vice Premier Wang’s remarks echoed the 2007 “Opinions of of Accountants, “To meet the demand of reform and opening
the State Council concerning Accelerating the Development of up, China recovered its certified public accountant (CPA) sys-
the Service Sector,” which cited the 11th Five-year Plan’s target tem in the early 1980s. In the early 1990s, China opened its
that “the ratio of the added value of the service sector to the accounting market. And in the new century, the country is ac-
GDP should have exceeded 50 percent” by 2020, among other tively promoting international convergence of accounting and
metrics for the sector’s growth.2 auditing standards in accordance with the development trend
of global economy and international standards.”10
The importance of the service industries to China’s continu-
ing economic growth is often noted by officials. In addressing The Vice Minister further reported that “the number of ac-
the inaugural meeting of China’s Service Trade Association counting professionals has constantly increased. By the end of
in January of 2008, Vice Minister of Commerce Yi Xiaozhun 2005, over 10 million people have got the Accounting Quali-
noted that although the “service trade is an important part of fication Certificate, more than 140,000 people have had CPA
global trade… there is a great gap between service trade and the qualification, and around 5,700 accounting firms have been es-
service industry in China, and there is great potential for devel- tablished in China. The service provided by CPAs in China has
opment.”3 been extended from foreign-invested companies at the begin-
ning of reform and opening-up period to all the areas at present
More recently, the broad official emphasis on the “transfor- including SOEs and listed companies.”10
mation of the mode of development” continues to emphasize
this shift in priorities. In mid-2010 it was estimated that tertiary More recently, it was reported that by 2009 there were in
industry accounted for 43 percent of the nation’s GDP (com- excess of 15 million holders of Accounting Qualification certif-
pared to its 77 percent share of the United States economy).4 icates11 and 155,000 CPAs.12
By 2012, this figure hadn’t budged: a Reuters analysis pegged A more recent account of CPA numbers on the Mainland
services in China as “[accounting] for just 43 percent of output, provided by China Daily shows 80,000 working for accounting
compared with well over 70 percent in Western countries.”5 firms and an additional 80,000 working in government
agencies.13
2013’s figures saw a modest gain of 2 percent to reach 45
percent of output; services moreover “overtook manufacturing Further steps are being taken to bring the Chinese
as the country’s biggest employer in 2011” and “weathered the Accounting Standards (CAS), released in early 2006, more in
global slowdown much better than the factory sector.”6 line with International Financial Reporting Standards (IFRS).
The Chinese standards, which became effective January 1,
This lack of movement on a critical metric suggests only 2007, for companies listed on exchanges, are encouraged for
limited success for an earlier strategy of tax increases for manu- private firms also, according to Director General Liu Yuting
facturing enterprises being offset with tax breaks for the service of the Accounting Regulatory Department of the Ministry of
industry in order to further promote a shift in the Mainland Finance, and ongoing efforts are being made to achieve greater
economy’s composition.4 equivalence between the CASs and United States and European
Union standard practices.14
A stated goal for the 12th Five-Year Plan period is to increase
226
2.9 Services
The service sector, often denoted as tertiary in- the contribution of the Mainland’s service sector to overall
dustry and involving the trade of non-tangible goods such GDP from 43 to 47 percent.7
as accountancy, advertising, financial, legal and information
technology services, is enjoying greater emphasis from both the Reuters observes that “One caveat to development is the
government and the private sector as China moves gradually need for a liberalized financial sector, making it easier for non-
away from the manufacturing that has characterized its first 30 state firms and more small- and medium-enterprises to raise
years since “opening up.” funds via bank loans or the financial markets.”8
Vice Premier Wang Qishan was explicit in this emphasis in According to China’s National Bureau of Statistics (NBS),
his welcome remarks to the International Investment Forum the total added-value achieved by the nation’s service sector in
2008 at the China International Fair for Investment and Trade 2009 surpassed 13 trillion yuan. This estimate was, in fact, a re-
(CIFIT), held annually in Xiamen between September 8 and vision of earlier reports placing the total at approximately 12
11, offering that “FDI will be encouraged to flow into high-tech trillion yuan.9
industry, modern agriculture, energy-saving and environmen-
tal-friendly industry, modern services and service outsourcing Illustrative of the service sector’s continuing progress is the
businesses.”1 recent history of accountancy in China. As related by Vice Min-
ister of Finance Jun Wang in 2006 to the 17th World Congress
Vice Premier Wang’s remarks echoed the 2007 “Opinions of of Accountants, “To meet the demand of reform and opening
the State Council concerning Accelerating the Development of up, China recovered its certified public accountant (CPA) sys-
the Service Sector,” which cited the 11th Five-year Plan’s target tem in the early 1980s. In the early 1990s, China opened its
that “the ratio of the added value of the service sector to the accounting market. And in the new century, the country is ac-
GDP should have exceeded 50 percent” by 2020, among other tively promoting international convergence of accounting and
metrics for the sector’s growth.2 auditing standards in accordance with the development trend
of global economy and international standards.”10
The importance of the service industries to China’s continu-
ing economic growth is often noted by officials. In addressing The Vice Minister further reported that “the number of ac-
the inaugural meeting of China’s Service Trade Association counting professionals has constantly increased. By the end of
in January of 2008, Vice Minister of Commerce Yi Xiaozhun 2005, over 10 million people have got the Accounting Quali-
noted that although the “service trade is an important part of fication Certificate, more than 140,000 people have had CPA
global trade… there is a great gap between service trade and the qualification, and around 5,700 accounting firms have been es-
service industry in China, and there is great potential for devel- tablished in China. The service provided by CPAs in China has
opment.”3 been extended from foreign-invested companies at the begin-
ning of reform and opening-up period to all the areas at present
More recently, the broad official emphasis on the “transfor- including SOEs and listed companies.”10
mation of the mode of development” continues to emphasize
this shift in priorities. In mid-2010 it was estimated that tertiary More recently, it was reported that by 2009 there were in
industry accounted for 43 percent of the nation’s GDP (com- excess of 15 million holders of Accounting Qualification certif-
pared to its 77 percent share of the United States economy).4 icates11 and 155,000 CPAs.12
By 2012, this figure hadn’t budged: a Reuters analysis pegged A more recent account of CPA numbers on the Mainland
services in China as “[accounting] for just 43 percent of output, provided by China Daily shows 80,000 working for accounting
compared with well over 70 percent in Western countries.”5 firms and an additional 80,000 working in government
agencies.13
2013’s figures saw a modest gain of 2 percent to reach 45
percent of output; services moreover “overtook manufacturing Further steps are being taken to bring the Chinese
as the country’s biggest employer in 2011” and “weathered the Accounting Standards (CAS), released in early 2006, more in
global slowdown much better than the factory sector.”6 line with International Financial Reporting Standards (IFRS).
The Chinese standards, which became effective January 1,
This lack of movement on a critical metric suggests only 2007, for companies listed on exchanges, are encouraged for
limited success for an earlier strategy of tax increases for manu- private firms also, according to Director General Liu Yuting
facturing enterprises being offset with tax breaks for the service of the Accounting Regulatory Department of the Ministry of
industry in order to further promote a shift in the Mainland Finance, and ongoing efforts are being made to achieve greater
economy’s composition.4 equivalence between the CASs and United States and European
Union standard practices.14
A stated goal for the 12th Five-Year Plan period is to increase
226
