PEAT Marwick is to withdraw from the office of Dongfeng Motor Corporation after the decision by China's securities watchdog to limit the number of listing candidates that an accountant is allowed to deal with. Dai Xinhui, deputy director of Dongfeng Motor's office of share restructuring, said the Chinese company had to opt for another accountancy firm because the China Securities Regulatory Commission had asked every accountant to take care of only four companies at the most among the latest batch of H-share issues. ''We have yet to decide which firm will be our accountants after Peak Marwick,'' said Mr Dai. But Dongfeng Motor seems to be left with limited choice. Ernst and Young has been appointed as an accountant for four companies, as is the case with Arthur Anderson. Deloitte Touche Tohmatsu has also secured two jobs for Qingling Automobiles and Harbin Power Equipment Plant. Mr Dai said Dongfeng Motor had initially appointed United States-based J P Morgan as the sponsor. This would be subject to the final approval of the regulatory body. He said the company intended to have an international offering for its Hong Kong flotation scheduled at the end of the year, but the final timing would hinge on stock market performance. Mr Dai said the proceeds would be used in three major aspects, with the bulk for its 70 per cent-owned, car-making venture with Citroen of France. Sedans will become one of the major production lines of Dongfeng Motor which, formerly known as Number Two Automobile Corp, specialises in the making of trucks. Mr Dai said the company signed the agreement with Citroen in 1991, with total investment of more than seven billion yuan at that time. But he expected the actual investment would far exceed that figure due to the rising inflation rate in China. The first phase of the joint venture will be in operation in 1996, with annual production capacity of 150,000 cars. The second phase will boost the total capacity to 300,000 units. Mr Dai said the money would also be used for developing the third generation of its ''Dongfeng'' trucks. An agreement was also sealed with a US engine-maker which would help the company develop the C series motor engines.