Lavis, on behalf of Praxity
China’s bid to create a third global trade axis could
be good news for accountancy in more ways than one.
and Road (B&R) initiative promises to transform the infrastructure and
economies of more than 60 countries, and accountancy firms will be at the heart
of the transformation.
The hugely ambitious
scheme to increase trade between East and West along key routes across Asia,
Africa and Europe is an attempt to change the global trading landscape based on
regional, international and inter-governmental cooperation.
initiative, also known as One Belt One Road, offers significant business
opportunities for accountancy firms to work in collaboration on cross-border
projects. It could also be a key driver for improvements to global accountancy
practice, including the development of international reporting standards and
more uniform ways of working.
€US1.1 trillion of investment has already been committed and 900 projects are
planned or underway, benefiting 80 countries, according to HSBC. China’s
government expects trade with BRI countries to exceed US$2.5 trillion a year
within the next decade.
project to succeed, it requires inter-governmental and financial cooperation, monetary
stability, investment and financing, and credit construction across Asia, not
to mention the removal of barriers to investment, the development of free trade
opportunities, and the promotion and exchange of talent throughout the B&R
these challenges, companies are keen to tap into the business potential of the project.
This has led to a surge in demand for expertise in international tax services
as companies seek to overcome the challenges of working across borders. In
addition to the opportunities for business growth, it is hoped the B&R will
lead to greater coordination of accounting, taxation and finance policies
throughout the East–West axis.
has already been made on convergence following a meeting between BRICS (Brazil,
Russia, India, China and South Africa) finance ministers and the Central Bank
of Governors in Shanghai in June 2017.
Chinese government has demonstrated its commitment to global tax reform with
the implementation of regulations related to Base
Erosion and Profit Shifting (BEPS), the tax avoidance strategies that exploit
gaps and mismatches in tax rules to artificially shift profits to low or no-tax
While Chinese accounting systems are becoming more
internationalised, many other countries within the B&R have very different
standards. Greater cross-border harmonisation will be one of the key challenges
as businesses seek to exploit the opportunities the B&R offers.
in the China edition of Accounting and Business magazine, Helen Brand, ACCA’s
chief executive said: “Such an ambitious plan will only succeed if the
economies along the Belt and Road cooperate. Our ethos in accountancy has always
been to facilitate links that promote sustainable growth”.
for greater cooperation between economies and greater harmonisation of
accounting standards is global, but given China’s determination to create a
third global trade axis, the B&R initiative may be the catalyst to make it