THE era of public relations companies remaining in Hong Kong - while attempting to serve clients in China - is over, according to Dian Terry, general manager of Hill and Knowlton in Beijing. Ms Terry said China's PR market was becoming increasingly sophisticated and corporate clients were less likely to accept firms that did not have a strong exposure and experience in the mainland. Ms Terry was in Hong Kong during a brief visit from Beijing. If Hong Kong PR companies wanted to join in China's economic boom, they would need ''at least'' offices in Beijing, Shanghai and Shenzhen, Ms Terry said. ''Edelman Public Relations bought a company and came to Beijing last year, Fleishman-Hillard have said they will open in China, and Burson-Marsteller opened in 1985,'' Ms Terry said. Hill and Knowlton, which made PR history when it opened Worldwide, China's first publicity operation in Beijing on October 15, 1984, had the advantage in China with its years of experience, excellent relations with authorities and good contacts, she said. Competition among international PR firms operating in Beijing and the rest of China was intense. ''Fierce? Sure it is. We are also finding that local firms are growing,'' Ms Terry said. ''But it creates a healthy environment and is good for the industry.'' Hill and Knowlton's Beijing office is at 22 Jianguomenwai Dajie, where Ms Terry has been hanging her corporate hat for the past two years. She said China continued to fascinate her. The lure remained, as it was when she caught the China bug while launching a McDonald's outlet in southern China. She said Hong Kong PR firms needed to be in China if they intended to succeed there. ''My advice is to get into China proper: Beijing and Shanghai. Certainly, you really need a presence in Beijing for a lot of reasons,'' she said. ''The most frequently asked question of us is, 'Can you service business in Beijing, Shanghai and Guangdong?' ''We are now beginning to hear Chengdu and elsewhere. ''But it is still mainly those three.'' To meet client needs, Hill and Knowlton has expanded. Last year, it opened its office in Shanghai. In the past two years, the group has ''more than doubled'' staff and has seen revenue almost quadruple. It also has an affiliate in Guangzhou. She would not reveal billings, but Ms Terry said there were 20 employees in their office, three of them foreigners. ''Our interest in China is to be the quality firm and we take it seriously,'' she said. ''We are more interested in training our staff and giving clients quality service than in size for its own sake. ''But, as more businesses move from coastal areas into China, we will grow with our clients.'' She said most public relations operations in Beijing were international concerns. Only one or two firms had headquarters in Hong Kong. She said the firm had a broad mix of clients - two local Chinese operations, the rest spread among British, Swiss, German and US clients. The firm's core activity was representing foreign companies. Increasingly, sophisticated Chinese companies - including those listing in Chinese and overseas stock markets - also sought the help of publicity firms. ''What a lot of Chinese companies and entrepreneurs are realising is that communications is an asset to be nurtured,'' Ms Terry said. ''They are beginning to realise it is not just putting out press releases; it is important on a strategic front. ''On the multinational front, companies are realising that knowledge of the company behind a product or service is a key to virtually every decision China makes and with Government communications. ''We have had companies come to us and say, 'We need you to tell them we are a huge company, one of the world leaders in our field'.'' Ms Terry said increasing numbers of foreign firms were moving into Beijing and the type of company setting up there was different. Earlier, it would only be the huge international companies who wanted a presence in Beijing. ''Now the multinationals are already there, the Fortune 100 to 200 companies,'' Ms Terry said. ''What is happening is that the rest of the Fortune 500 are now beginning to come in.''