"Hong Kong is most likely the best place to launch operations. You get more leverage and have much greater ability to extract profits than you do from mainland China," said Mark Harding, VP-business development at Putman Media. "The Web has also been slower to develop in China than Hong Kong."
Putman marketed a Chinese version of its Chemical Processing until the 1989 crackdown on Tiananmen Square protestors led the company to exit China, Harding said. Now, Putman wants to re-enter the market.
"There's a huge manufacturing base in China," Harding said, "but not a lot of expertise on how to make it all work, and that's where we come in." Putnam titles include Food Processing, Industrial Networking and Pharmaceutical Manufacturing.
Harding was part of an American Business Media-led contingent that visited Beijing last month. ABM organized the trip to put senior b-to-b media executives in front of Chinese government officials and potential media partners. It was also an opportunity for executives to learn firsthand about best practices in penetrating Chinese markets.
The three-day excursion included meetings with Zhang Bohai, president of the China Periodical Association, and Hugo Shong, president of IDG Asia. There was a networking breakfast with Barry Friedman, senior commercial attache at the U.S. Embassy in Beijing, and David Gossack, commercial attache for the U.S. Embassy Commerce Department.
"We met with a lot of different China hands," said Gordon Hughes II, president-CEO of ABM. "If you're going to do business in China you really have to get to Beijing and get approval from the government and the CCPIT [China Council for the Promotion of International Trade]."
Even though the Chinese government demands 51% control of any print-media deal, Hughes said ABM was encouraged by the meetings. Trade shows and Web sites do not require U.S. companies to partner with state-owned news agencies.
Harding stressed that a "CN" number?a sort of medallion a foreign publication must have to operate in China?is tough to get.
Despite serious obstacles, a burgeoning market of 1.3 billion people is difficult for publishers to ignore. The fourth-largest economy in the world, China has sustained average economic growth of more than 9.5% for the past 26 years, according to the U.S. State Department.
Since China began its economic reforms in the 1980s, the number of b-to-b magazines published in the country has risen steadily. Among roughly 9,000 magazines currently published in China, almost 3,000 are b-to-b, according to ABM.
Marketing in China requires patience and nuance, said Peter May, senior VP at Prism Business Media, who was also part of the ABM contingent. "You really have to drill down to find an economic presence," he said. "The more technical-oriented the product, the less controversial and the more value you're going to bring for partners on the other side."