ARTHUR Andersen & Co is employing an innovative benchmarking system to help restructure state-run enterprises in China. David Ng, a partner at the firm of accountants, said benchmarking was a popular device in Western countries for improving company operations and management. He said Arthur Andersen, in conjunction with some top international firms, had recently developed a Process Classification Scheme (PCS), which allows different businesses to compare their operations by a common standard and learn from one another. PCS, which sub-divides business activities into a series of common processes, is designed as a common framework to make parallel benchmarking practices possible in different industries. Arthur Andersen has also built up a data-base, collecting what are recognised as the best practices of company operations in the world, to support its service. Mr Ng said Hong Kong companies, which were increasingly ''quality conscious'', were getting more and more interested in using benchmarking to upgrade their operating efficiency. At the same time, he said there would be growing demand for benchmarking in China, and it was now appropriate to introduce such a service to the mainland. ''It is particularly relevant to increasing numbers of mainland Chinese enterprises, which attempt to measure themselves against international practices in their transformation into more market-driven organisation,'' said Mr Ng. ''Benchmarking will be an effective tool to upgrade the mainland firms' operation and management to international standards,'' he said. Mr Ng said several state-run enterprises had appointed Arthur Andersen to provide benchmarking services to help improve their operations. Arthur Andersen, together with Swiss Bank Corp, is currently engaged in a project to help prepare Laiwu Iron and Steel Co of Shandong province for a shareholding system, according to Mr Ng. He said the new benchmarking system was being used to facilitate the restructuring of Laiwu Iron and Steel. If the project proves successful, the Laiwu pilot scheme will be applied to the entire iron and steel industry in China.