China Insights

GCiS shares a mix of China economy and business observations, industry articles based on recently published multi-client reports, infographics composed with public statistics and annual reviews of China demographics.

 

Market Trends: China’s Silicone Sealant Market

This article is based on a GCiS multi-client report: China Neutral Silicone Sealants Market Research Report.

In the September 2013 issue of Adhesives and Sealants Industry Magazine, we discuss the position of foreign and domestic suppliers in China's market for neutral silicone sealants. Local suppliers' lower average prices, has allowed them to dominate the low end of the market and take the lion's share of mid-range revenues. Foreign suppliers like Dow Corning are still holding on to a strong fraction of the market for high-end sealants, but domestic companies are improving their quality year on year. 

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At a Glance: The Chinese membrane market

This article is based on a GCiS multi-client report: China Membranes Market Research Report

In the July/August 2013 Edition of Water and Wastewater Magazine, we discuss the market for filtration membranes in China and explain how sales of these membranes will remain robust over the next few years, due to downstream demand and favorable market conditions.

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Why are Foreign Companies Growing Slower in China?

Weakness in One Sector in Particular Provides Part of the Answer

A recent finding from the GCiS Research Data Set shows that over the past 4 years, starting in 2008, domestic Chinese companies have grown significantly faster than foreign-invested companies. This includes both private as well as state owned Chinese firms (SOEs). Heading into 2012, FEI’s (foreign invested companies, including WOFE and JV) were growing significantly slower than Chinese companies.

One reads almost daily how much this or that MNC is having record sales in China, though it bears keeping in mind that in many cases this is not because the company has gained market share in China, but because the economy has grown so fast over the past 10-15 years. Just since the year 2000, China has added over RMB 40 trn in GDP (nominal), or nearly USD 7 trillion at current exchange rates. Certainly some foreign companies have had great success in China above and beyond GDP growth- GM and Apple come to mind. Though in many cases this has been momentum growth, with growth actually below GDP or sector rates. The chart shows that at the start of the period FEI’s were growing at about average (for industrial markets), though this has slowed by 2%, while the rate of Chinese firms has increased.

Figure 1: Real Industrial Growth Rate by Ownership (2008-2011) – RDS Data

Real Industrial Growth Rate by Ownership - GCiS China Market Research
Source: GCiS Research Data Set

A quick note on definitions: this is original data that comes from a pool of original GCiS research with hundreds of companies, including FEI, private and SOE firms. As GCiS is a B to B specialist, the pool of companies is weighed heavily by industrial firms, in markets such as chemicals, oil & gas, building & construction, power, and other industrial.

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China's High-voltage Cable, Wire Market-Domestic Dominance, Foreign Opportunities

This article is based on a GCiS multi-client report: China High Voltage Cables Market Research Report.

An analyst at GCiS China Strategic Research explains how the combination of uneven economic development in China and an uneven distribution of resources has forced the construction of massive high-voltage transmission projects. The cables for these projects are sourced from domestic companies, but there are still opportunities for foreign companies in a more advanced and rapidly growing market segment, submarine cables.  

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Why Can't My Company Do a Billion Dollars in China?

Or $100 Million? Or $100,000?

Most who deal with China strategically have long ago moved past the mindset of “if I could only sell a product to every Chinese person, then I’d have it made…,” realizing that penetrating this market and making sales is not so simple. Unfortunately some still look at China from afar and see a much rosier picture than exists here on the ground- a big market, fast growth rates, low hanging fruit, and with these come expectations that are just as high. Such as for one’s company:

  • To triple sales in China within 5 years
  • To gain 20% market share within 3 years
  • To do $1 billion or $100 min in China within 3-5 years

In some cases these are possible, though in many cases not, especially with a slower market at present. So if your company can’t meet these goals, what’s the problem? We outline here the top factors that will limit growth of your company in China:

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