Global consulting firms operating in China are increasingly adopting complex and higher-risk business approaches as they navigate mounting geopolitical tensions, evolving Western sanctions, and tighter Chinese restrictions on foreign participation in sensitive sectors, according to industry and legal experts.
Since 2023, the China divisions of several major consulting firms have explored or undertaken work linked to clients facing international sanctions. Company documents and sources familiar with internal decisions indicate that KPMG’s China unit carried out work for a Russian state-owned bank under sanctions, whilst Bain & Co’s China arm pitched for a related project but did not secure the engagement. Separately, staff linked to EY reportedly used a Chinese intermediary to pursue a project for a state-owned financial institution.
Western sanctions, expanded following Russia’s 2022 invasion of Ukraine, have significantly broadened compliance requirements for global firms. At the same time, China has tightened oversight of foreign consultants working with state-owned enterprises and introduced sweeping data-security rules in early 2025 that restrict cross-border data transfers.
Documents and industry sources suggest that some of the world’s largest consulting firms are attempting to adapt to these changing conditions while managing slowing economic growth and strained relations between China and Western nations. One example involved KPMG China assisting Russia’s Sberbank in setting up a representative office in China, including support with licensing, government inspections, IT assessments, and tax matters. The project reportedly carried fees exceeding $400,000. KPMG said the work complied with applicable laws and sanctions checks.
Sberbank has faced extensive sanctions from the United States, European Union, and the United Kingdom, which restrict various financial and professional services. Legal and sanctions specialists note that working with sanctioned entities can expose firms to reputational and regulatory risks, particularly where secondary sanctions could apply to non-U.S. entities providing material support.
Another instance involved Bain & Co’s China unit proposing a market-analysis project for Sberbank focused on China’s electric vehicle sector. The consultancy reportedly proposed fees exceeding $400,000 for a short-term assignment but ultimately did not secure the contract. Discussions reportedly included concerns about receiving payments from a sanctioned entity.
Experts say navigating sanctions can depend heavily on transaction details, payment structures, and currencies used. However, they caution that firms must avoid any arrangement that could be interpreted by authorities as sanctions circumvention.
Meanwhile, China’s policy environment has grown more restrictive toward foreign consultancies. Beginning in 2025, new data security regulations introduced mandatory security reviews for companies handling sensitive data and further limited overseas data transfers. These measures were partly aimed at strengthening national security.
Foreign consultancies expanded rapidly in China following the country’s entry into the World Trade Organization in 2001, helping multinational companies and domestic firms operate in new markets. However, local competitors have since gained ground by offering lower costs and stronger familiarity with domestic regulations and business culture. Growth for major accounting and consulting firms has slowed noticeably in recent years.
Industry figures say some global firms are now using intermediaries to pursue projects that may otherwise face regulatory or internal compliance barriers. In one example, staff connected to EY in China reportedly worked through a third-party firm to pitch for a strategy project for a Chinese state-owned bank. The contract was signed between the intermediary and the bank, although individuals listed on the project team were reportedly affiliated with EY-related entities. The intermediary said it collaborated with foreign experts but did not secure the project.
Analysts say global consulting firms are increasingly balancing regulatory pressures from both Western governments and Chinese authorities, leaving them to navigate a challenging and complex operating environment as geopolitical tensions intensify.
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