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.


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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The Road Ahead A Look at China’s Automotive Coatings Market

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

Repair and OEM coatings markets are fundamentally very different, as one shadows automotive production and the other follows more closely with customer preferences. Luke Johnson, senior analyst at GCiS China Strategic Research, discusses some of the findings from their recent market study on automotive coatings with Coatings World.

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The China LED wafer market: A story of commoditization

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

In the September 2012 edition of LEDs Magazine, an analyst from GCiS examines China's quest to develop the domestic LED industry, and how the high and medium-power LEDs have been resilient to the traditional commoditization model whereas declining prices and overcapacity witnessed in the low-power LED market suggests overinvestment. The article also explains how the value chain will congregate around three distinct steps over the course of the next decade steps. Presently, by comparison, the market sees four or more process layers in the value chain which strip the industry of efficiency and profits.

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Importance of China to Western Multi-Nationals

5 Years ago, Now, and Going Forward
Just How Important is China to Western MNCs?

Just how important is China to western multi-nationals? For years we have been hearing talk of how important China is going to be to western business, and how China as well as other BRIC and developing countries would drive growth for these companies. One of the best ways to measure this is to look at the total contribution of China to the total revenues of leading multi-nationals in China- now compared to several years ago. So is this potential now being realized?

The short answer is, with exceptions, yes. The average China revenue of 20 large multinational corporates increased from USD 2.8 Bn in 2006 to USD 6.1 Bn in 2011- thus more than doubling in this five year period. Just as important, for this sample of 20 MNCs China now accounts for nearly 11% of their global revenues as of 2011.

One big reason for this is that China's market itself has increased substantially, both in absolute terms as well as a percent of the world economy. In 2006 China accounted for 5.6% of the world economy (nominal), and last year this was 10.4%- an increase of nearly 90%. At the same time, for these MNCs, sales to China increased by 88%- almost an exact correlation- as noted in the table. So at an important level, MNCs sales to China have increased less because they are gaining market share, and more to the fact that China has grown so fast.

Figure 1: Importance of China to Western MNCs- an Overview

Source: Company Info, Secondary Sources, GCiS *Nominal

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