Tom Liu, founder and CEO of Chinascope, shares invaluable insights into the Chinese market and alternative data landscape. He discusses the evolution of data attitudes in China and challenges investors face in navigating a complex market. Tom highlights advancements in AI and machine learning that are reshaping financial strategies. He also addresses the impact of changing geopolitical views on investment and the significance of smart cities in enhancing urban governance, showcasing the shifting dynamics of China’s data ecosystem.
Tom Liu's journey in founding Chinascope highlights the critical need for improved data infrastructure to support foreign investment in China.
The increasing governmental focus on big data and AI post-pandemic indicates a shift toward more accessible data for businesses and investors.
The expanding alternative data ecosystem in China presents new opportunities for both domestic and international players amidst evolving regulations and market demands.
Deep dives
Tom Liu's Journey and Chinascope's Foundation
Tom Liu, the founder of Chinascope, shares his journey from Shanghai to establishing a data-focused venture aimed at bridging the gap in China's data infrastructure. After spending significant time in Australia and the United States, he returned to Shanghai to tackle the challenges faced by international investors navigating the Chinese market. Recognizing the inadequate data support for Chinese businesses seeking to attract international capital, Liu established Chinascope in 2009. The company aimed to create a comprehensive database and provide tailored data solutions that would facilitate understanding of Chinese companies for foreign investors.
Adapting to the Evolving Data Landscape
Chinascope began with a focus on making Chinese companies more accessible to international investors, but quickly adapted to the rapidly evolving data landscape. With the rise of big data and machine learning technologies, the company shifted its approach to encompass broader datasets and advanced technological tools, including natural language processing (NLP). This transformation allowed Chinascope to capture various data types beyond traditional financial statements, enhancing the depth and accessibility of information available to clients. By doing so, the company positioned itself to meet the evolving needs of the investment community both domestically and internationally.
The Chinese Market and Government's Role in Data
The Chinese government has increasingly recognized the importance of data and its role in fostering economic competitiveness and innovation. Over the last few years, particularly following the trade war and COVID-19 pandemic, government interest in big data and AI technologies has surged, leading to initiatives aimed at liberalizing data access. This shift aims to enhance the availability of public utility data for businesses and investors alike. The government’s commitment to incorporating data into urban planning and economic strategies is likely to create new opportunities for alternative data providers as they seek to navigate this evolving landscape.
The Diverse Buyer Landscape in China Today
The buyer landscape for alternative data in China comprises various stakeholders, including financial institutions, government agencies, and corporates. Financial institutions, especially commercial banks, have increasingly leveraged data to drive retail and corporate banking, transforming their operations through the availability of public company information. Government agencies have utilized data for effective city planning and smart urban initiatives, seeking to optimize resource distribution and attract talent. Furthermore, corporations are developing data-driven applications to enhance their internal processes and decision-making, highlighting a growing appetite for alternative data solutions.
Future Directions for Alternative Data in China
The alternative data ecosystem in China is expanding and becoming more competitive, driven by growing demand among both domestic and international clients. Although the market remains fragmented, the liberalization of data and the emergence of alternative data sources signal promising growth potential. Western data providers looking to enter the Chinese market may find opportunities due to local firms' willingness to consume foreign data as they aim to expand their operations globally. As regulations evolve to protect intellectual property and promote data-sharing initiatives, the landscape for alternative data is expected to mature, enhancing its value across various sectors.
In this episode I speak to Tom Liu, founder of ChinaScope and invaluable guide to the Chinese market.
In our conversation, Tom and I discuss his data offering and the development of China’s attitudes towards data, as well as the buyers and sellers of alternative data in China today.
In other news, I will be moderating the New Provider Showcase at Battlefin London on November 21st. If you are a new data provider and would like to enter, please do get in touch with me.
DISCLAIMER
This podcast is an edited recording of an interview with Tom Liu recorded in November 2024. The views and opinions expressed in this interview are those of Tom Liu and Mark Fleming-Williams and do not necessarily reflect the official policy or position of either CFM or any of its affiliates. The information provided herein is general information only and does not constitute investment or other advice. Any statements regarding market events, future events or other similar statements constitute only subjective views, are based upon expectations or beliefs, involve inherent risks and uncertainties and should therefore not be relied on. Future evidence and actual results could differ materially from those set forth, contemplated by or underlying these statements. In light of these risks and uncertainties, there can be no assurance that these statements are or will prove to be accurate or complete in any way.