Jin Renqing, China’s finance minister, has announced at a glittering ceremony in Beijing, that the country will to bring accounting and auditing practices in line with international financial reporting standards.

In a speech, he said: 'This is a milestone for the accounting and audit industry in China which will move the country towards a more modern economic model and help investors make more sensible decisions.'

In doing so, China will become the 74th country  to adopt IFRS, the FT reported.

Sir David Tweedie, chairman of the International Accounting Standards Board, said the decision would 'encourage investor confidence in China's capital markets and would be an additional spur for investment from both domestic and foreign sources'.

All listed companies in China must comply with IFRS from 1 January 2007.