The presence of Chinese brands as part of the global marketplace will increase significantly over the next years, according to the chief executive of one of the world's leading business services firms Ernst & Young.

James Turley, Ernst & Young's chief executive officer, told Xinhua, "I think Chinese companies are increasingly being recognized as world class."

Turley added, "If you think about the Fortune 500 Largest Businesses in the world, over the last seven or eight years the number of Chinese companies on that list has grown five times, from some 15 or 16 to 80. And so, it has been a remarkable growth and I think that is going to continue."

Turley said that part of this growth was attributable to privatization, from the listing of state-owned companies, but part was companies "own growth and their increasing appetite to look outside of China, not just to meet the needs of the dynamic Chinese markets, but to look outside for growth opportunities and acquisitions."

Turley pointed to the acquisition of Smithfield, the well-known United States brand, by Shuanghui International Holdings, as a recent example of such growth.

Turley said that his company did business in three sectors in China -- private Chinese companies, state-owned Chinese companies and non-Chinese companies.

Of these, Turley said the smallest sector was private Chinese companies. However this sector was set for growth. "They will grow rapidly. So, while they are not state-owned, I think what the government does own is the environment in which they operate. And so, the government doing everything to encourage, if you will, an open economy," said Turley.

Open economy and innovation vital for success

An open economy where entrepreneurs were not penalized for trying businesses and failing was essential to growth, Turley said.

"A lot of entrepreneur activity does not work the first time, and so if either tax systems or legal systems or culture make it better not to have tried than to have tried and failed then you won't have as much innovation. And so, I think the government's own role and the tax system and the rule of law are what encourage entrepreneurship," he said.

Turley said he believed China on innovations and brand cultivating in future. "It is just a matter of maturity, it is a matter of time," said Turley, adding that there is every opportunity that the Chinese market will demonstrate more entrepreneurial spirit.

He said, "I think different perspectives coming to issues really amplifies innovation because when we are all looking at in the same way we do not innovate as much as when we are all looking at it differently. So, I think China has a great future."

Global recovery

The global economy was recovering from the effects of recession and the hangover of the global financial crisis, said Turley. He pointed to China as an area where he had great hopes.

"We remain extraordinarily optimistic about China; we remain optimistic about Latin America; Russia has hit a bit of a tougher spot; Europe is challenging to say the least, you have heard often the challenge is there; North America we feel quite good about, slow growth but steady growth and we feel positive. So at the end of the day we feel optimistic," said Turley.

Brazil and the broader South American market, and China and the broader Far East market had been the two fastest growing areas of business for Ernst & Young, said Turley.

Ernst & Young chief operating officer John Ferraro said that global recovery would be on the agenda for national leaders at the G8 Summit to be held in Northern Ireland next week.

The global economic recovery was fragile and sovereign debt remained a big issue, Ferraro said, adding, "Many countries have worked through some programs on debt, but we still have a long way to go. We have unemployment in some parts of the world which is way too high -- and also youth unemployment. These issues have not gone away, we did not create them in a few months and they are not going to be solved in a few months."

He added, "In the long term these issues required fundamental changes to our paradigm and how we have been thinking about them. And I think a big element of that is the globalization... the interconnection between countries."

Ferraro said different regions would recover from the effects of the recession at different rates and that emerging markets, despite some hiccups, still showed healthy growth.

Global Times