China Business Blog and Podcast

Technomic Asia Conducts Research for AmCham Shanghai Report

Shanghai and Raleigh, NC — December 16, 2009 — Technomic Asia jointly released the 2009 China Business Report with the American Chamber of Commerce in Shanghai (AmCham Shanghai) this week which revealed China as one of the few growth areas for US business around the world. Kent Kedl, vice president and general manager of Technomic Asia in Shanghai, said, “This does not surprise me even in the midst of a ‘mostly global’ recession. The survey shows, contrary to the conventional wisdom that China is only a source of low-cost labor, in fact American companies are finding incredible growth opportunities in China.” This year’s survey showed that nearly 60% of American companies are investing in China for the revenue created by the China market. “After 25 years of working with companies on their China growth initiatives, we are seeing these companies realize some big pay-offs,” said Kedl.

“American companies are finding that their performance in China is the bright spot in an otherwise challenging global picture,” said Brenda Foster, president of AmCham Shanghai. “This is creating a level of optimism among American companies investing in China that we have not seen for many years. Even though this is a very difficult time in the global economy, China remains quite strong and our report shows that American companies are poised to take advantage of market opportunities.”

Technomic Asia partnered with AmCham Shanghai to produce the survey, now in its tenth year. “AmCham Shanghai was delighted to work with Technomic Asia, which helped develop and administer the survey and led the analysis,” said Foster. “Their long experience in the market here and their deep knowledge of foreign investment in China brought our survey’s insight and impact to a new level.”

A key finding of the survey is the factors related to a company’s success in China. The following factors were found to be significantly related to a company’s profitability in China:
• Size: especially those with more than US$10 million in revenue
• Experience: especially those with more than five years in China
• China revenue relative to global revenue: companies who derived more than 5% of global revenue from China
• China priority: companies that set China as their #1 priority in global investment plans
• China sales footprint: those companies with sales offices in two or more cities in China

Nearly 45% of the survey respondents have been in China for longer than ten years and, says Kedl, “It is clear from this survey that experience counts – China takes some getting used to and the longer companies are here, the more they learn and the more successful they tend to be.” Kedl sees companies continuing to focus on growth in 2010, expanding their penetration of markets into Tier 2 and Tier 3 cities.

In this survey, more than 64% of companies said in 2009 they were profitable to very profitable, “a phenomenal statistic given the state of the global economy” says Technomic Asia’s Dr. Kim Woodard, one of the leaders of Technomic Asia’s Mergers and Acquisitions practice. “I am encouraged by the five-year outlook from survey respondents,” added Woodard, noting that nearly 90% are optimistic about China’s market. Woodard suggests this number is a supportive indicator of the increase in inquiries Technomic Asia is getting about mergers and acquisitions in China. “We are seeing those players who are confident that their five-year growth strategy must include a major stake in China planning their next move,” says Woodard.

Technomic Asia also produces the award-winning China Business Podcast which will have a series of episodes related to the 2009 China Business Report. Those shows are available on iTunes, and Stitcher Radio as well as the Technomic Asia Blog. The China Business Podcast has been in production since 2005 and was the first podcast about conducting business in China.

About Technomic Asia
Technomic Asia, the Asian arm of Tompkins International, is a strategic consultancy with more than 25 years of experience helping clients plan and execute Asian growth strategies. Technomic Asia assists companies in entering the Asian market or in expanding their business by providing critical market insight, an understanding of business potential and assistance in designing the optimum strategy for success including M & A. Technomic Asia’s Steven Ganster and Kent Kedl are co-authors of “The China Ready Company,” a book that details the formation of a successful China strategy.
Media Contact: Albert Maruggi
612-325-8126
amaruggi@providentpartners.net

This entry was posted on Wednesday, December 16th, 2009 at 2:32 pm and is filed under China, Technomic Asia news, economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.