The number of foreign firms in mainland China has dropped for the first time since the country opened its door to non-domestic firms in the early 1990s.

The dip in numbers was revealed in The Lawyer’s China Elite 2015 report, which was released last week.

There were 170 foreign firms with 225 representative offices in China in 2014/15, according to the latest official list published by China’s Ministry of Justice.

Both figures were down on the previous year, which recorded 178 firms and 232 offices. It is the first time the number has shrunk since foreign firms were officially allowed to open representative offices in China in 1992.

The change is partly due to a number of global mergers and the collapse of some international firms in recent years.

Australian firms Allens and legacy Mallesons Stephen Jaques both closed their China offices due to tie-ups, for example. Allens formed an alliance with Linklaters and Mallesons merged with Chinese firm King & Wood. The now defunct Bingham McCutchen closed its Beijing office last year with its lawyers moving to Morgan Lewis.

However a number of foreign firms have pulled out of China for reasons not related to tie-ups or financial pressures, such as the US firms Fried Frank Harris Shriver & Jacobson and Chadbourne & Parke, Brazilian firm Duarte Garcia Caselli Guimarães e Terra Advogados and Swedish firm Advokatfirman Vinge.

Some firms decided to reduce their presence on the ground. UK firm Stephenson Harwood closed its Guangzhou office last year, instead entering into an alliance with Guangzhou firm Wei Tu in order to continue servicing its local clients. Prior to the closure, the firm was one of the few foreign firms with three offices in mainland China.

A number of international firms in China are also abandoning old strategies of opening bases in favour of better serving their clients through local associations or alliances.

UK insurance firm Kennedys and Italian firm Gianni Origoni Grippo Cappelli & Partners, which earlier this year entered into an alliance with Beijing-based Anjie and Han Kun respectively, is one such example.

However, many other firms continue to seek growth in China. Most recently, Spanish firm Garrigues opened its second office in Beijing 10 years after launching its first office in Shanghai. Last month, US firm Alston & Bird chose Beijing as its first Asia base.

According to official statistics, Shanghai remains the most popular destination for foreign firms, as the city plays host to 124 representative offices compared to 87 in Beijing.

Of the 170 firms, 54 have two offices, mostly in Beijing and Shanghai, while 115 keep a single base in the country. Only one firm on the list, Paris-based DS Avocats, has three offices, in Beijing, Shanghai and Guangzhou.

Clyde & Co also claims to have three bases in China too, made up of its representative offices in Beijing and Shanghai and its joint venture in Chongqing, which it set up in 2013 with local firm West Link.

US firms account for the largest group among foreign firms in China, with 87 firms making up 51 per cent of the total 170. Continental European firms form the second largest group with 31, and UK firms come third with 19.

To find out more about China’s leading local and international firms and the latest market trends, read the executive summary here or contact Richard Edwards (richard.edwards@centaurmedia.com) to purchase the full report.