The Chinese government made an attempt to address the problem with the opening of the Shanghai National Accounting Institute in 2001, and since then sister institutes have been set up in Beijing and Xiamen.

But these institutes can deliver only a limited number of graduates each year. Also, the institute's examinations are notoriously difficult, which does not help with recruitment, according to accountancy firms.

'It's an important qualification, but the pass rate is very low,' said Dave McCann, human resources partner at PwC.

'If I am a talented graduate at university, do I want to join a profession where my statistical chances of passing the qualification are not that high?'

Unable to find enough readily trained accountants, firms are recruiting and training fresh graduates in-house. 'Hiring talented local graduates in significant numbers is essential. China has a lot of talent, and we have put a huge effort into on-campus recruitment,' Mr McCann said.

Firms are not restricting themselves to accountant and business graduates, but are looking across a wide range of disciplines. Peter Bowie, chief executive, Deloitte China, said the company's main focus was on 'hard-working students' who could come from a variety of academic backgrounds.

Firms have found it relatively easy to secure large numbers of fresh graduates by offering attractive remuneration packages and training schemes. What is challenging is retaining these recruits.

A surplus of job openings in the mainland marketplace has had a significantly negative effect on company retention rates. Graduates are in demand and they know it, and they are becoming extra selective about what they want.

Multinationals face an ongoing problem of graduates treating them as training grounds for a couple of years before switching to another firm. In response, the Big Four are paying closer attention to retention. 'It's essential to keep the staff we already have, and we have become more sensitive to doing so,' Mr Bowie said.

Many accountancy firms have introduced incentive schemes. PwC has a compensation, communication, reward and recognition scheme that includes extra perks and a voucher system, as well as greater participation and bottom-top communication designed to get staff more engaged with the firm's direction.

Retention plans are not limited to graduates. Senior staff are also being targeted. Many firms are overcoming the entry-level problem with in-house training, but find hiring higher-level staff with more experience rather more difficult. Expats are still the main solution to senior-level shortages.

Mr Bowie said Deloitte was taking a global approach to the problem and was using its offices around the world to help fill senior-level jobs in China. Remuneration packages for expats entering the China market are hugely attractive, and incoming staff are at an advantage when negotiating. Still, this is only a short-term solution, with staff staying for just a few years in the country .

One rich source of talent is the Chinese overseas community, especially Chinese in Canada, the United States and Australia. PwC is recruiting trainees in the US and Australia specifically for the China market. Before they are brought over to China, the recruits undergo several years of training in their respective countries. These graduates are not only highly skilled, they speak the language, and cultural ties encourage them to stay longer in China than most expats.

To a large extent, Hong Kong is seen in this category. Firms regularly recruit here for China positions. So far, the number of Hong Kong accountants working in the mainland has been relatively small. Meanwhile, the Hong Kong Institute of Certified Public Accountants (HKICPA) has plans to set up an office in Beijing this year, and is seeking further exemptions for HKICPA members taking Chinese Institute of Certified Public Accountant exams, something the big firms believe could help ease recruitment problems.

'It would be advantageous for everybody if staff in Hong Kong did not have to retake and re-register,' said Grainne Sugrue, senior manager, KPMG human resources.