Jinfo: Looking East: Chinese Research Sources

Looking East: Chinese Research Sources
Jinfo Blog

30th June 2007

Abstract

Notwithstanding the hype, the endless newspaper articles, the sometimes breathless editorials, China is an economic phenomenon. For a large economy to grow at an average of almost 10% for nearly 30 years is nothing short of remarkable. Yet since 1978 that is exactly what the still ostensibly Communist regime has achieved. It is no wonder that middle class school children are now being 'encouraged' by their parents to stay late and learn Mandarin at after school clubs.

Item

Tim Houghton Notwithstanding the hype, the endless newspaper articles, the sometimes breathless editorials, China is an economic phenomenon. For a large economy to grow at an average of almost 10% for nearly 30 years is nothing short of remarkable. Yet since 1978 that is exactly what the still ostensibly Communist regime has achieved. It is no wonder that middle class school children are now being 'encouraged' by their parents to stay late and learn Mandarin at after school clubs.

So it would be staggering if information professionals were not seeing strong demand for country, sector and company intelligence on this most dynamic of world markets. After 30 years of economic growth and liberalisation China remains something of an enigma and certainly one that presents a real challenge for the research community.

A recent book by Tim Clissold, "Mr China: A Memoir", provides anecdotal evidence of the many pitfalls that await the unwary. Joint ventures may not be what they seem and intellectual property rights are more honoured in the breach. This article provides a brief overview of some of the research sources available to those wishing to learn more about the Chinese market. It is directed particularly at those information professionals helping to advise on foreign direct investment (FDI) and exports rather than portfolio investments.

The sources of data below are grouped in approximate order of depth and specialism and also with a view to the stages of an investment project. That is, initial market evaluation, followed by more detailed market research and in all probability bespoke primary research. It hardly needs adding that an article of this length makes no attempt to be exhaustive. These are only suggestions for sources that may be useful to better understand the Chinese market. There are many others.

And as any good information professional knows, vital intelligence is often 'soft' and implicit. It is held in the minds of experienced practitioners, not within a subscription database or a market research report. Any research reports ought to be supplemented and augmented by these types of knowledge.

Current awareness

As China is such a hot topic currently, media comment is not hard to come by. Any 'global' business title will yield a good crop of China stories. So an archival search through FT.com, The Wall Street Journal, the International Herald Tribune or The Economist may well provide useful material. If you want slightly more local material, then the websites of the South China Morning Post <http://www.scmp.com/> The Hong Kong Standard <http://www.thestandard.com.hk/> or The China Daily <http://www.chinadaily.com.cn/> are all informative sources.

For those who subscribe to a news aggregation service such as Factiva or Lexis-Nexis, these can, of course, provide such media data from a single source. And the hardy perennial for good country overviews is the CIA Factbook <http://digbig.com/4tetg>, as is The Economist Intelligence unit and the dedicated country pages on The Economist website <http://www.economist.com/countries/China/>. Other good sources for country overviews and risk reports include Oxford Analytica <http://www.oxan.com/>.

Statistical data

For those in need of more statistical data the IMF <http://www.imf.org/>, the World Bank <http://www.worldbank.org/> and the OECD <http://www.oecd.org/> all provide a good supply of data on subjects such as GDP per capita, population and the composition of the Chinese economy by sector. However the old computing rule of garbage in, garbage out applies. As much of the source data comes from the Chinese government, it should be treated with some caution and only to provide an overall contextual view.

Credit reference and broker reports

The rather wobbly Shanghai stock market apart, many stock brokers, credit reference agencies and investment analysts are keen on China and do cover it. Standard and Poor's, Fitch and Moodyâ€™s all provide reference reports on various aspects of the Chinese economy. Brokers that cover China include CIBC World Markets, Jeffries and SG Cowen Securities. Bear in mind that the Hong Kong stock market includes many firms with sizeable exposure to China and with many Chinese research specialists.

For those considering exporting to China, the credit rating of many buyers is hard to assess and as a result credit is harder to come by. However Dun and Bradstreet is known to be investing heavily in its Risk Management and Sales and Marketing products for the Chinese market so hopefully this situation will improve.

Market research aggregators

It would be a brave company that decided to invest in, or trade with, China on the basis of media and broker reports. Hence the next step for a firm interested in China will probably be to start to analyse specific sectors.

Rather than trying to identify specific providers directly, it may be faster to utilise one of the Web-based market research aggregators. Firms such as Alacra <http://www.alacra.com/>, Mindbranch <http://www.mindbranch.com/> and Market Research.com <http://www.marketresearch.com/> all provide a portal to multiple research providers. They are an excellent way to survey what research is available in the marketplace.

Specific market research providers

Unsurprisingly, in view of the opportunity presented by the Chinese market, many firms are now offering research reports across a variety of sectors. Some of the providers that offer a good breadth and depth of reports include:

Frost & Sullivan <http://www.frost.com/>, which provide reports on Chinese industrial markets including the Chemicals, Automotive and Healthcare sectors
SnapData publish a wide variety of reports on the Chinese market, covering everything from Alcoholic drinks to Food and Transport <http://www.snapdata.com/>
Another good source for published data is Icon Group International <http://www.icongrouponline.com/>. They provide a large number of market research reports, many specifically tailored to market entry strategies
Access Asia <http://www.accessasia.co.uk/> is a UK firm but with a local office in Shanghai. They currently have around 500 reports available but in addition are happy to provide consulting and bespoke research services.

Other research providers, including Frost & Sullivan, also offer consultancy services. And it may also be worth talking to independent research professionals such as, for example, Jane Macoustra of Tai-Pan Research <http://www.tai-panresearch.com/>, who has significant personal Asian research experience.

Primary research

Dependent on the type of research project, it may also be necessary to commission surveys and other primary research in order to better understand consumer or business customers. Potential providers for such work include China Polling, based in Beijing <http://www.chinapolling.com/>. Although I do not have direct experience of them, they appear to use primarily online-based methods to gather data.

DDMA (Data Driven Marketing Asia) have recently opened a Shanghai office and so can now offer 'on the ground' focus groups and other qualitative studies in 35 Chinese cities. But clearly this type of research will require substantial costs.

Conclusions

China represents an immense opportunity for many businesses, and as a result demands on information professionals for intelligence on China seem certain to increase. But it remains in many senses an opaque market, with the state still controlling many thousands of enterprises. The availability of high quality information is increasing but contacts and experience, or what the Chinese loosely call 'guanxi', remain important. Hence information professionals will need to apply all their rigour, creativity and contacts to successfully deliver on requests in this area.

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