Alan Thometz, director of transaction advisory services for accounting and consulting firm Grant Thornton, spent the last year living in Beijing and traveling in China to stay abreast of changes in the world's second-largest economy behind the United States.

Thometz helps U.S. and foreign buyers study Chinese prospects, kick the tires of potential acquisitions and perform financial and tax due diligence.

QWhere is the Chinese economy headed?

AFor the last 20 years, China GDP growth annually has been about 13 percent. That is a blistering rate of growth. We're growing at less than 2 percent. We have about 325 million people. They have about 1.3 billion. Their economy is $11.4 trillion against our $15.2 trillion, in purchasing power parity in 2011. That washes out exchange-rate issues.

They are the world's largest exporter and the second-largest economy. The growth rate has dropped this year to about 7.5 percent. Their biggest markets are the U.S. and the European Union. As long as there is politically stability, I see significant growth in China.

QHowever, their standard of living is still significantly below ours in terms of wealth, pollution, health and other measures, correct?

ATheir standard living is below us. Our GDP per capita is $49,000. Theirs is about $6,000.

QWhat's your role?

AGrant Thornton does business in 100 different countries. We have 17 offices and 2,500 employees in China. We see an opportunity to do more due diligence with inbound and outbound acquirers. I was there to help [Grant Thornton] capture more of that market. We could have a firm in France or South Africa or Germany who calls us to help us do due diligence on a firm in China. Or a Chinese client could call and ask us due for diligence on a company they want to buy in the U.S. or another country.

To make it real, I just spent the last hour on the phone with a large Chinese company that's looking to spend over $1 billion buying a U.S. company, a manufacturer. These were preliminary discussions about timing and what would be the scope of our work.

QChinese interests own Cirrus, the Duluth-based manufacturer of private airplanes. How's that working? And aren't Chinese interests buying Hawker Beechcraft?

AHawker Beechcraft ... filed bankruptcy in May. A Chinese firm, Superior Aviation, has an agreement to buy Hawker Beechcraft's assets for $1.8 billion. The Chinese bought Cirrus a couple years ago. I'm a pilot. Cirrus produces a high-performance, single-engine plane. In the last year, Cirrus has done well. They are selling to the French, the U.S. Air Force Academy, and 25 to the Chinese Civil Aviation Flight University, the largest pilot training school in the world.

Two things are behind this. One is technology. They are looking to do more value-added manufacturing. Also, there is very little general aviation in China. It's becoming more prosperous ... and general aviation in China will take off. Here in the U.S. we have a pretty mature general aviation industry. Many competitors and they compete hard on price.

QWhat are some of the pitfalls of doing business in China?

AWe tell clients to invest with their eyes open. There are different rules and regulations and licensing requirements. Language and culture are enormous obstacles. English is spoken by many Chinese, but full understanding is long and cumbersome. An hour conversation I had today with Chinese, would have taken 15 minutes with American business people. There are often multiple sets of books. It's certainly common within private companies. And it's the Wild West. One of the challenges is to find out which set is accurate so that we can report that to our client, a buyer. It can take some digging.

QWho are some Minnesota businesses that have benefited from investments in China?

AThere are quite a number, and there will be more. Toro, 3M, Donaldson, Pentair, Valspar and Medtronic are sourcing products and manufacturing in China. These companies don't just look at China for cheap labor but as a market. There are 1 billion cellphones, including iPhones, in China. China is not just a source of cheap labor and goods. China also is the largest buyer of high-end Swiss watches in the world. They buy Buick, Ford, Ferrari and Audi.

A big opportunity for Minnesota companies is food safety. General Mills, Land O'Lakes [for example]. Ecolab is there with its sanitation business. I saw issues in the Chinese newspapers about manufacturers of food accused of selling tainted and unsafe product. Consumerism is growing. I see a significant opportunity for our companies. Law firms as well. Dorsey & Whitney, Faegre Baker Daniels, Fredrikson & Byron. They are there.

QDid you enjoy living in China?

AYes. I lived in a large apartment building, relatively new. Most of my neighbors were Chinese, but not average Chinese. The building met Western standards. I had a single-bedroom apartment. That's not how the average Chinese live.

But there is running water, buses, trains, subways that meet global standards. I often would walk or take the bus to work. I ate in restaurants two or three nights a week. I enjoyed the people, culture and history.

Neal St. Anthony • 612-673-7144