Case: Entering the Chinese Market – Tier 2 Industrial Gas Company
📊 Total Reporting UX: Business Assessment Report
🎯 Objective
Assess the viability and risks of market entry into China for a Tier 2 European Industrial Gas company.
🔍 Overview of Key Issues
- Issue A: Market Saturation and Price Pressure
- Issue B: Regulatory and Geopolitical Barriers
- Issue C: Partner & IP Risk in Joint Ventures
🧾 Issue A: Market Saturation and Price Pressure
- 📉 Evidence 1: Top 5 Chinese players control 75% of industrial gas supply
- 📊 Evidence 2: Price erosion in merchant gas segment: –18% margin since 2021
- 📦 Evidence 3: Overcapacity in key coastal regions (East/South China)
🏛️ Issue B: Regulatory and Geopolitical Barriers
- 🧾 Evidence 1: Complex foreign investment approval processes (MIIT, NDRC)
- 🛑 Evidence 2: Local content requirements in state-influenced industries
- ⚠️ Evidence 3: Increasing scrutiny on EU-origin technology transfers
🧠 Issue C: Partner & IP Risk in Joint Ventures
- 🤝 Evidence 1: Joint ventures required in several industrial zones
- 🔐 Evidence 2: Weak IP enforcement and tech leakage cases (2020–2023)
- 🔍 Evidence 3: Alignment risk with SOE (state-owned enterprise) partners
📌 Summary of Conclusions
- A: Entry would be in a commoditized space with weak pricing power
- B: Regulatory alignment requires major local political capital
- C: Partnership risk undermines long-term control & ROI
✅ Final Recommendation
🚫 DON’T PROCEED – Focus instead on ASEAN + India for scalable returns and strategic leverage