International investors into China are set to benefit after Shanghai Orient Appraisal Company joins IVSC and embraces International Valuation Standards (IVS).
As the Chinese economy continues to grow rapidly, more and more international businesses and investors are looking for opportunities to build and acquire assets in the country. According to the Ministry of Commerce, Foreign Direct Investment into China was up 4.6% over the first six months of 2018 to $68.3 billion.
China’s ambition to grow inward investment is connected to its longer-term effort, formulated in 2012 through its 12th Foreign Capital Five Year Plan, which aims to gradually open up Chinese markets to foreign investment and to more closely conform with international standards.
Historically, highly localised standards which differ from one market to the next have acted as a brake on flows of investment around the world. Incompatibilities in the financial data used to inform business and investment decisions, including valuation data has fostered a lack of transparency and heightened risk for those operating across national borders.
Increasingly, however, international standards such as IVS for valuation and IFRS for financial reporting are ensuring consistency and comparability in the way financial data is produced and reported. The result has been greater assurance for cross-border business and investors who are able to interpret and compare data on a like-for-like basis.
China is no stranger to international standards and the Chinese Appraisal Society (CAS) has been a leader and pioneer in the evolution of a valuation profession which embraces global best practice. Working in collaboration with Valuation Professional Organisations around the world and under the umbrella of the International Valuation Standards Council (IVSC), CAS has ensured that China is not just adopting but also influencing global valuation practices.
This week, one of the foremost domestic appraisal service providers in China, the Shanghai Orient Appraisal Company, has become the first in mainland China to join the IVSC. Signalling their commitment to a growing international client base, Shanghai Orient Appraisal becomes a flagbearer for IVS and the global valuation profession.
Commenting on the news, Chairman of the IVSC Board of Trustees and former Chairman of the International Accounting Standards Board (IASB), Sir David Tweedie said:
“We know that China continues to be seen as an attractive destination for global business and investment. Having confidence in the valuation data which underpins business decisions is vital in order to turn that image into genuine inflows of foreign investment. It is important that leading businesses in China show the way when it comes to embracing international standards and professionalism and it is therefore hugely significant that Shanghai Orient Appraisal has become the first to join the IVSC’s network of members which spans more than 100 countries. Shanghai Orient acknowledges the importance of International Valuation Standards to China and this is great news for the global valuation profession and for the Chinese marketplace. It is even better news for international clients who are seeking assurance and consistency in the processes underpinning financial data.”
The China Appraisal Society (CAS) is the body appointed to oversee the valuation profession in China. Reflecting on the news, CAS Secretary General, Dr Zhang Guochun, added:
“The valuation profession in China began during the 1980s, mainly aimed at the reform of State-owned Assets (SOEs) and the building of capital markets in China. Over the following 30 years, China’s valuation profession has developed steadily and has been playing a critical role in China’s economic and social construction. Shanghai Orient is one of the top Chinese appraisal firms. During the last decade, Shanghai Orient has grown its business in many regions and countries, including Southeast Asia, America and Europe, Africa, Oceania and more. I am glad to see Shanghai Orient embrace the IVSC’s mission. It is the first Chinese appraisal company to join the IVSC and sets an example to others. We hope this will benefit both sides, and that more and more Chinese appraisal companies come forward to support the IVSC, working together to enhance the valuation profession globally.”
Chairman of the Shanghai Orient Appraisal Company, Mr Wang Xiaomin commented:
“With the rapid implementation of China's "Belt and Road initiative", asset evaluation, as the common language of pricing in the market economy, is vital in order to facilitate flows of capital across borders. As one of China’s top 10 evaluation institutions, Shanghai Orient Appraisal Company has built an expert team with the international vision required to support global clients. The company aims to build an international professional service brand, "Orient Appraisal" and adhere to the core values of "Integrity, Diligence, Objectivity and Professionalism". We are honoured and proud to be the first appraisal firm in mainland China to join the IVSC as a Corporate Member. There is an old Chinese saying that "If people have the same heart, Mount Tai can move". We look forward to building our cooperation with the IVSC and its members in more than 100 countries, opening a new era of international communication and cooperation in China’s appraisal industry and advancing the global valuation profession.”
Notes to editors:
About Shanghai Orient Appraisal Company:
Shanghai Orient Appraisal Company has engaged in cross-border assessment services for many years, covering North America, South America, Europe, Africa, Asia, Australia and New Zealand as well as other markets. It is one of the Top 10 appraisal companies in China and Top 3 in China based on headquarter revenues, with a strong reputation not only as a highly competent valuation service provider, but also for its research into the valuation profession.
The appraisers devote to bridging the gap between China related supervision department and overseas market, such as GAAP difference, standard difference and etc.
Shanghai Orient Appraisal Company makes a long-term commitment to promote training in International Valuation Standard and looks forward a convergence of Chinese Appraisal Standard and International Valuation Standard in order to seek common ground while reserving differences.
About the China Appraisal Society:
CAS is the national, non-profit organisation which is formed from valuation firms and qualified valuation professionals in China. It is overseen by the Ministry of Civil Affairs and Ministry of Finance of the People’s Republic of China.
Over the last thirty years, China’s valuation industry has been working to build a profession that supports our market economy. Today, there is a well-established body of knowledge and a set of practical valuation standards which support business and empower future generations of professionals.
CAS has an institutional membership of 3,800 firms, a practicing appraiser membership of 35,000 at the end of June 2018, making it the largest asset-valuation professional organization in the country.