US data company to buy stake of CEInet
By Zheng Lifei (China Daily)
Updated: 2005-11-17 06:19

Joseph E. Kasputys

A US information company is to buy a "substantial" stake of China Economic Information Network (CEInet), the country's primary economic data provider, China Daily has learned.

Global Insight, a leading US economic data and analysis provider, and CEInet has agreed "in principle" to form a co-operation partnership.

The Boston-headquartered economic data company and CEInet have confirmed the deal, but said it is yet to get the go-ahead from the government.

"Yes we have agreed in principle to co-operate with CEInet," Joseph E. Kasputys, chairman and chief executive of Global Insight, told China Daily.

"But we will still await the necessary government approval for the deal to proceed. Hopefully, this will come by the end of this year or early next year," said Kasputys, who once served as Assistant Secretary of the US Department of Commerce from 1975 to 1977.

Li Kai, vice-president and chief executive of CEInet, acknowledged the deal, saying it is now in the "final stage."

Information on the exact proportion of the stake to be taken is not available, with both sides refusing to disclose the figure.

But according to a person who has been involved in their two-year long negotiations and who declined to be identified, the share value to be bought by Global Insight will amount to "several millions of US dollars."

"As China's economy grows rapidly, so does investors' demand for more accurate and precise information from it, so to team up with CEInet, which has reliable economic data about China, is an important step," said Kasputys.

Set up in 1996 by the State Information Centre, a body that is affiliated to the National Development and Reform Commission (NDRC), nine-year-old CEInet has become a prominent economic data and analysis provider in the country.

Besides providing macro economic data and forecasts, it also provides data and analysis of 60 industries, making it one of the country's most comprehensive economic data suppliers.

It is also considered as the most authoritative economic data provider in the country, with many major government agencies such as the finance ministry, central bank and multinational companies, such as the Bank of Japan and the Thomson Financial, as its customers.

"We have been looking for potential partners for a while in China, and we found CEInet to be the most suitable one for us. Its model is quiet similar to ours, which, I believe, will facilitate our co-operation," said Kasputys, who founded his firm in 2000.

"By co-operating with Global Insight, we could market our data products more effectively in overseas markets, especially in the US and European markets where it has strong presence, through our partner's existing sales network and client base," said Li Kai, CEO of CEInet.

CEInet's revenue has grown 30 per cent annually in the past three years, Li said, but he did not reveal the exact figures.

Global Insight, which is still privately owned, last year achieved US$80 million in revenue, a figure that is expected to reach US$100 million this year, Kasputys disclosed.

Some analysts say the alliance between CEInet and Global Insight marks the beginning in consolidation of the country's economic data and analysis industry, which, they say, will grow faster than the overall economy and become more competitive in the years to come.

"The entry of foreign players into the industry will help elevate home-grown data and analysis providers' service and product quality," said Chen Naihui, Director of the Research Institute of HC International Inc, a Hong Kong-listed business information service provider and a competitor of CEInet.

"It will also help them better market their products overseas," he added.

But he refused to predict any likely impact CEInet's move would have on his company.

(China Daily 11/17/2005 page11)