This article was first published in the January 2016 international edition of Accounting and Business magazine.

The US and China, the world’s two largest economies, are rivals as well as important partners. But while politicians occasionally bicker about currency policy or intellectual property, Sandy Chu FCCA, head of Grant Thornton’s China Business Group, sees her role as helping to bridge the gap between these two global titans.

‘In some ways we function as business ambassadors,’ she explains. ‘We are giving Chinese businesses insight into how to expand or buy businesses in the US and vice versa.’

Appropriately enough, Chu’s office at Grant Thornton is based on the east side of midtown Manhattan, just a stone’s throw away from the United Nations, a focal point of global diplomacy. Born in Hong Kong, she has witnessed at first hand the rise of China from a recipient of international development aid to an economic colossus second only to the US. ‘It was always said that when the US sneezes, the world catches a cold,’ she observes. ‘The same can now be said of China.’

When Chu started her career in 1995, few people imagined that the country would make such dramatic economic strides, she admits. In that year China had a GDP of just US$756.9bn, in current prices, about half the size of the French economy, according to the International Monetary Fund. Around 455 million people, or 37% of the population, lived on less than $1.25 a day. Now it is about 13 times larger with a GDP of $10 trillion. Its annual output has overtaken that of Japan, Germany, France and the UK. Meanwhile the poverty rate declined to 6% as of 2011 and continues to fall fast. ‘What China has achieved has been truly remarkable,’ says Chu.

The locomotive of Chinese growth has not only been good news for its own citizens, says Chu. ‘It has also contributed to getting the world economy through a dangerous period after the 2008 financial crisis,’ she says. Over the past 10 years China alone has accounted for 61% of global growth.

Career origins

Chu’s own career has been international from the start. She chose to leave her home base in Hong Kong to study in London, graduating in accounting and finance from the University of North London. She also became an ACCA fellow, a qualification that she says helped launch her career when she returned to Hong Kong after her studies. ‘The ACCA Qualification had the huge benefit of being flexible, so I could study full time to finish the qualification without the need to work at the same time,’ she says. ‘As long ago as the early 1990s it offered a truly international training, and was viewed as a highly prestigious qualification in Hong Kong and around the world.’

In contrast to many top accountants, Chu did not focus on climbing the greasy pole as a young woman. ‘Much of my career has been based on good fortune,’ she says. ‘I was partly attracted to accountancy because it seemed like a steady and stable job that would not force me to travel too frequently away from home.’ This was at least one career goal that has not been realised. Instead Chu now flies enough to qualify as a United Premier 1K elite traveller – clocking up at least 100,000 miles a year. About half of her time is now spent travelling either within the US or to China – she usually goes two or three times a year to China.

Her first appointment was at PwC in the China tax and business advisory practice, where she rose to become a senior manager. Chu then considered taking a career break after her husband decided to move back to the US. But, after a brief period out of the workplace, she was tempted by a job at EY in New York. Again the focus was » 
on China, advising companies on corporate tax, restructuring, mergers and acquisitions, investment and other general business matters. She rose to lead the China desk.

In 2013 she was poached by Grant Thornton to set up and run its China group, where she now leads a team of 18 specialists. The main focus of China practices at major accounting firms has shifted profoundly over recent years, Chu explains. ‘A decade or so ago the main task was to help US companies set up in China, which was seen largely as an export hub and a source of cheap labour,’ she says. ‘Now we are doing ever more work with Chinese companies that are wanting to set up or buy overseas. That is a trend that is being encouraged by the Chinese government, which wants firms to look outwards and learn from the best in the world.’

The focus on international expansion has also been fostered, she says, by a sense that the Chinese real estate market, which has been booming for years, will not offer such attractive returns in the near future. Investors have thus become more willing to extend their search for opportunities beyond China.

Alongside this change, foreign companies that develop operations in China no longer typically view the nation merely as a production centre, Chu believes. ‘More companies are attracted to China as a source of internal demand in its own right as the number of affluent and middle-class citizens has exploded,’ Chu says. What’s more, the investment rules have become far more friendly to business and increasingly aligned with global business standards.

Improving reliability

Meanwhile, the standard of accounting at domestic firms has improved in leaps and bounds over the past few decades. ‘In the early days we would often go in and see multiple sets of books,’ she says. ‘That is now far less frequent. The authorities have taken huge steps towards improving the reliability of accounts.’

But part of the reason Chu has retained a focus on China is that much of the complexity of dealing with the country remains. ‘This is a vast country with many markets,’ she says. ‘Despite modernisation, tax rules are written very broadly and still leave a lot of room for interpretation, and a lot of discretion is maintained by the local authorities.

What works in one city may not function in another. The rules can also change very fast.’ As a result, she says, accountants have to look at the same systems again and again. This lack of clarity is partly deliberate, she believes, and was designed to permit local areas to tailor the system to suit their own needs.

‘For example, a rule might talk about the treatment of assets without being precise about whether it is referring to tangible or intangible assets,’ she explains. The upshot for a China-focused accountant, she says, is that ‘life never gets boring’.

For outside companies investing in the country there are still many tax rules that can trip up companies, unless they are advised properly by local experts. ‘For US companies, the demand remains high to understand the nuances of China’s tax rules and capital controls,’ Chu says. ‘China still has foreign exchange controls that can make it tricky to extract money from the country. We can help with that. US companies can take over a Chinese firm that has a lot of cash and will need assistance taking some of it back to the US.’

Having spent much of her career at Big Four firms, Chu believes that a mid-tier accounting firm like Grant Thornton has a potential edge in this environment.

‘Since we are not so large it is easier to keep overheads lower, which translates into better value for clients,’ she says. ‘Grant Thornton can offer a more hands-on approach, with partners and other more senior staff more available for clients. A frequent complaint about the Big Four is that clients often end up dealing with somewhat less seasoned staff, who are still acquiring experience,’ she adds. For the audit practice, Grant Thornton focuses mostly on mid-tier companies, since a giant multinational can demand too many people. But it competes head-to-head with the big guys on tax consulting and advisory.

Chu’s job now is to foster the development of this growing business in China. That task requires a hands-on approach, she argues. ‘It is important for me to travel here and to be physically present, to feel the mood on the ground,’ she says. ‘I have to act as a bridge between these two business cultures. Technology is great. Still, you need more than FaceTime and Skype to keep in touch with what is going on over there.’

With two children who have grown up in the US and a husband who also travels internationally, Chu has no immediate plans to live permanently in China. But over the long term she says she feels equally at home in New York, London or Hong Kong. ‘These are really very similar cities in that they are all international business hubs with a lot to offer.’

While worries over the outlook for Chinese growth have been grabbing headlines in recent months, Chu remains upbeat for the long run. ‘Every economy faces setbacks and challenges,’ she says. ‘I believe, however, that China will continue to modernise and grow. The country’s importance in the global economy will continue to increase over the long run.’

Christopher Fitzgerald and Fernando Florez, journalists