KPMG will continue to concentrate on helping domestic Chinese companies expand internationally, said the global chairman of the accounting giant.

Michael Andrew was in Beijing to introduce the firm's new special general partnership, which is being put in place before its previous joint venture license expires. He said the firm will now be investing in building its research capacities in China, and striving to build a knowledge-exporting base in the country.

KPMG used to serve multinational corporations when it first came to China in 1992 and has worked closely with the State-owned enterprises on their listing processes, he said.

But as the world's second-largest economy restructures itself, and more Chinese companies look overseas to expand, Andrew said "the priority is to offer professional advisory services for Chinese enterprises, specially small businesses, in their overseas investment and mergers".

KPMG is the first of the Big Four accounting firms - the other three being Deloitte Touche Tohmatsu, Ernst & Young and PricewaterhouseCoopers - to convert itself into a local partnership.

The Finance Ministry has also approved another transitional program by Ernst & Young on Tuesday, according to a PR release of Ernst & Young.

In its new partnership format, KPMG has selected 25 partners, 15 of which have qualifications from the Chinese Institute of Certified Public Accountants.

That 60 percent ratio of locally qualified partners will have to increase to 80 percent within the next five years.

"It is a very important strategic goal and the best result for KPMG in China and globally," Andrew said.

Stephen Yiu, chairman of KPMG China, added: "The transformation will not affect our clients, staff, business and service quality, as we continue to contribute our part to the development of the Chinese economy.

"If there is going to be any change, it'll be an increase in service quality because we'll have more partners with better knowledge of local businesses and risks," he said.

Andrew said that KPMG will also invest more in building its research capacities in China and strive to build a knowledge-exporting base that benefits from the abundance of local talent that is available. "It will be like our research centers in India, where we bring in business from other countries and export to a global market," he said.

The shift in KPMG's business model comes as the Big Four face an increasing challenge from fast-growing domestic firms.

According to the latest table of the top 100 accounting firms in China, ranked by the CICPA, the revenues of the Big Four only increased by 6 percent in China year-on-year in 2011. By comparison, Chinese companies reported faster growth last year, as the revenues of the top 10 domestic firms increasing 38 percent.

Chen Yugui, secretary-general of the CICPA, said there had been considerable merger activity within the industry locally, and he expected continued consolidation, as had happened at various stages in its history.

Scott Univer, WeiserMazars' general counsel, who was also a former general counsel for BDO Seidman, added: "After World War II, top level firms were often US headquartered in the US, taking advantage of the post-war dominant American economic position.

"But as local economies recovered and prospered, the shares of global firms eventually fell as they were not as well positioned as locally-based networks to benefit from the expansion of the local economy, in particular working with startups and other growing businesses and entrepreneurs," he said.

weitian@chinadaily.com.cn