COOPERS & Lybrand has been picked by Chengdu Cable Plant and China Eastern Airlines as their accountant in their preparation for overseas listing, according to sources. Chengdu Cable and China Eastern are among the second batch of state enterprises approved by the country for listing overseas. The keen competition among international auditing firms for accountancy contracts with mainland companies heading for an overseas listing has raised concern on the profitability of such service. John Stuttard, the newly appointed chairman and chief executive of Coopers & Lybrand China, yesterday said doing accounting for Chinese firms was not necessarily profitable. ''Chinese companies are always very good at negotiating prices,'' he said. ''Most companies [consultancies] in China are not making profit . . . but we're looking at China in a long-term perspective.'' But whether an operation was lucrative also depended on the way it was run, he added. ''The more expatriates you hire, you more costly you become,'' Mr stuttard said, adding Coopers & Lybrand stressed on employing locals. He noted that the main problem auditing firms could expect in auditing Chinese companies would be the discrepancies of the Chinese accounting system from the international one. The mainland system operated on a cash basis instead of value of assets and liabilities, he said. Coopers was the first international accounting firm to have a presence in China, in 1981. It has assisted in the preparation of at least nine Chinese companies for domestic or overseas stock exchange listing. Coopers China was set up in 1992 to oversee the consultancy's operation on the mainland. That includes a joint-venture practice, Coopers & Lybrand CIEC, and representative offices in Shanghai, Tianjin and Guangzhou. The joint venture has the authority to sign official audit report for Chinese companies while representative offices do not. Mr Stuttard, who has also been appointed deputy chairman of the joint venture, said the company would expand its activity in China. It is planning to set up representative offices in Dalian and Shenzhen.
