BearingPoint Inc., the computer services company formerly known as KPMG Consulting Inc., said it plans to boost its China workforce fivefold to 6,500 by 2008, betting that restructuring in the financial-services industry will boost technology spending in Asia's second-biggest economy.
BearingPoint Chairman Roderick C. McGeary visited China twice in the past six weeks to underscore the company's commitment to growth there, Shanghai-based spokeswoman Vivien Wu said. The company's sales have doubled each of the past three years, she said, declining to give figures.
The McLean-based company competes with International Business Machines Corp., Accenture Ltd. and Deloitte Touche Tohmatsu in China, where banks and insurers are upgrading technology and improving services. China has pledged to fully deregulate its banking and insurance market by the end of 2006, removing restrictions on companies including Citigroup Inc. and American International Group Inc.
"Chinese banks will continue to spend a lot in technology to improve their competitiveness," said Judy Ou, Beijing-based analyst at International Data Corp., a technology research company. "Insurers' spending will grow very rapidly as the industry is still in its infantry in China."
Chinese banks spent 2.6 billion yuan ($313 million) on computer services in 2003, while brokerages invested 579 million yuan ($70 million), according to IDC. China's total spending on information technology reached $3.7 billion, 23 percent more than a year earlier, and is expected to grow 26 percent annually through 2008, IDC said.
BearingPoint's clients include China Mobile Communications Corp. and Industrial & Commercial Bank of China.
Chief executive Harry L. You said last month when he took over the job that fixing errors in the company's financial reports, which led to a delay in announcing 2004 and first-quarter 2005 earnings, is his top priority.