WITH many foreign-invested power generation deals in China dead in the water, international accounting firm Arthur Andersen has given some top management additional duties and is spending more time training younger employees.
Daniel Tracy, a senior partner who oversees the firm's initiatives in China's power industry, has recently helped Shenzhen North Jianshe Motorcycle Co to prepare its B-share listing for the Shenzhen Stock Exchange.
Arthur Andersen also has been sending more of its Chinese employees to the United States for six months to one year to meet clients, develop their English skills and become accustomed to the firm's international standards.
'We haven't down-sized at all. Experienced human resources are difficult to come by out here,' Mr Tracy said yesterday.
'This provides us more time to gradually develop employees along the traditional path of assignments and growth instead of throwing them into difficult situations.
'It gives us time to take a breath.' Arthur Andersen employs about 450 people on the mainland in offices in Beijing, Shanghai and Shenzhen. About 90 per cent of the staff are mainlanders, and the remaining 10 per cent are expatriate Chinese - except Mr Tracy, who also frequently goes to China.
Mr Tracy said the firm plans to have offices in Guangzhou, Dalian and Wuhan, but none will be set up this year.
'The electric industry is developing much more slowly than we originally anticipated,' he said.
Although China has often declared that foreign investors could provide funding for 20 per cent, or about US$20 billion, of the nation's enormous power needs up to 2000, the government's focus on reducing inflation has slowed the approval process.
China also has yet to satisfactorily resolve foreign investors concerns over rate of return and limited recourse financing.
Leonard Kujawa, Arthur Andersen's international director of electric industry, warned that China could not delay power projects much longer. He estimated that for every US$1 of gross national product growth, an economy needed one kilowatt hour more of electricity.
'If you talk to international players, they are all positioning themselves to be involved in the China market because they know it will open up. The issue is when, but not much is happening now,' Mr Kujawa said.
He added that China's electricity prices, which average about three to four US cents per kilowatt hour, were still lower than the commonly accepted six cents which business required to clear a 'reasonable profit'.
Mr Tracy said Datang Power, which was supposed to list in Hong Kong last year, still was negotiating electricity tariffs with various power bureaus. It expected to have approvals in place for a listing in 1996.