Global consulting firms are increasingly using complex workarounds to continue operating in China, as Western sanctions and Beijing’s tighter controls on foreign involvement squeeze opportunities. A Reuters investigation found that the China arms of firms including KPMG, Bain & Co and EY have pursued or undertaken work linked to sanctioned Russian entities or Chinese state-owned banks, sometimes using intermediaries to sidestep regulatory and compliance barriers. Examples include KPMG China assisting Russia’s sanctioned Sberbank with setting up a China branch, Bain pitching for market analysis work for the same bank, and EY staff using a third-party firm to bid for a project with a Chinese state-owned lender. While companies say they complied with applicable laws, legal and sanctions experts warn such arrangements carry significant reputational and regulatory risks. The cases highlight how consultancies are walking a geopolitical tightrope as sanctions expand, China tightens data-security rules, and growth in the world’s second-largest economy slows.
