Steven W. Alesio, Chairman and Chief Executive Officer of D&B announced on November 3rd 2006 during the Q3 2006 Earnings Conference Call, the creation of a joint venture in China with Huaxia Credit International. The joint venture is expected to create the largest commercial credit information company in China in terms of revenue and the size of the China database. By leveraging its DUNSRight process, D&B is expecting to generate more value added from an expanded China data base. To have a local partner with good ‘Guanxi’ is an excellent move, which will provide D&B with a considerable competitive edge over local and foreign competition.
China is beginning to recognize the importance of consumer and trade credit and is working vigorously on a ‘Social Credit System’, the Chinese term for credit culture and credit system. The ‘social credit system’ embraces all components of a modern credit system: a legal and regulatory framework, borrowers, lenders, credit management, credit information and decision systems as well as accounts receivables management services. The market for credit information in China is embryonic and is estimated to be in the range of US$30 to US$50 million. Nevertheless the market potential is huge, given the increasing role of credit in China’s economy and the reliance on accurate, reliable and timely information. What is remarkable about the deal is the fact that Huaxia Credit was the partner of the COFACE Information Alliance. The industry is now wondering what made Huaxia Credit switch camp.
BIIA Newsletter October – 2006 Issue