The story behind Baiguan, and beyond

Dear Subscribers,

In February 2023, Baiguan was launched. Within four months, we have grown to a 1,700-large community across over 80 countries. We have come a long way and we are grateful for your support. Now, we would like to share more about the story behind it and where we are heading.

How Baiguan was born

In late 2022, the team behind this newsletter, BigOne Lab, met the biggest external shock in our business life: the market we know well and serve well, is having the biggest disruption we have ever seen.

For years since our founding in 2016, we have striven to use high-frequency data to help investment funds and businesses around the world to track China's new economy industries with both accuracy and insights. We invested massive resources in tracking the performance of the hottest sectors at the time—sectors that promised trillion-dollar markets with tomorrow's unicorns: education, live-streaming entertainment, and community-group buying, among others. The business was great. We were also proud to believe that we played a positive role in helping the economy and our clients to grow.

Things took an abrupt turn in 2021. As we witnessed many of these industries come to a screeching halt, the value of some of our data products was also wiped out. Just as 2021 came to an end and when we thought things could not get any worse, then 2022 arrived, with it came the Ukraine war, the Covid lockdowns, and ever-rising geopolitical tensions that shook the very foundation of investor confidence in China, and thus our data business.

Clearly, the ground is shifting.

The shift is not just the industries we are in. In hindsight, our first golden period was no more than a by-product of a golden period in China's red-hot new economy sectors. We are but a product of our time, rising with its tide. We, the writers of this newsletter, were caught painfully in between the most unprecedented and largest socio-economic disruptions of our generation: the intensifying Sino-US great power competition, an aging yet over-leveraged population stuck at the middle-income level, a bloated real estate sector that could no longer sustain growth, and a contained ambition to ascend the technology ladder and supply chains. This confluence of historical inevitabilities whirled into disruptions that voided many’s presumptions about how China works, and how the world would evolve, including ours.

The disruptions went beyond borders. In three years, we saw a huge and widening divide between China and the world. Left shivering and confused from the events in 2021 and 2022, our clients, our friends, other China stakeholders and we were unsure about how to understand China anymore. Foreign and local media we relied on were also not reporting information that helps. We ourselves also had an impulse to just stop figuring things out and leave.

But, on the other hand, China's significance to the world economy is unambiguous: it accounts for 18% of the world's total GDP (2022), 14% of global exports (2021), and 11% of global imports (2021), and emits 27% of the world's total carbon emissions (2021); more than 100 companies in the S&P500 have over 30% of their revenue coming from China.

Our guts tell us several things. First, obviously, China still matters. Second, if short-term tensions between China and the world become a long-term divide, no one will benefit. Third, some of the divides we saw are rooted in real issues, but, if you could do as many travels, talk to as many people, have access to as much data, gather as many non-mainstream viewpoints and be immersed in as much context - as we do, you may well find most of the “divides” are just imaginary.

The entrepreneurial souls in us asked: what can we bring to the world during this chaotic time? So, instead of only focusing on helping top-tier funds and corporates, we decided to open ourselves up to a much larger audience— investors, businesspersons, policymakers, or anyone with a genuine interest in China, and to tell the stories of China as we see it.

How Baiguan helps

What has troubled observers is that China looks like a much riskier place than it used to be compared with the three decades between 1990-2010 period. We are constantly asked, is China peaking? Will the economy get better? Will China go downhill from here ever after? Intuitively, we understand for many of the questions it's not a matter of data and facts anymore. It's a matter of belief, a leap of faith, a subjectively binary choice between in and out. And we are not shy about stating some of our core beliefs here:

1. We believe it's too bold a claim that China is peaking. If this were true, it would be the shortest rise of any major power in human history. Historically, the rise and fall of great nations progressed through centuries, and is preconditioned by cultural upbringings of generations of people. In the end, the strength of a nation depends on the self-drive and the vitality of her people, and the Chinese people are still among the hardest-working groups in the world. And, people do not just stop working hard in an instant. So we still believe China's growth story has yet to play out. That is why Baiguan will always look for business and investment opportunities in China for you. This is the main task of our Investment section.

2. Modern China's growth story is too unprecedented for linear thinking to work well. China has evolved from an agricultural to an industrial to a post-industrial cyber society in barely three decades. This implies that there are many vastly different population groups living under the same roof: foreign-educated white-collar workers switching from Starbucks to Luckin Coffee, elders who once experienced war and extreme poverty, middle-aged entrepreneurs who used to work in state-planned jobs before being laid off by the state, Gen-Z who grew up with mobile internet, rural migrant workers who switched from construction to food delivery, super-rich whose lifestyles were barely affected by the economic downturn but became more cultured and low-key... Many of China's contradictions come from the fact that all those pockets of people live in a society at the same time, and all public discourses and policies take this fact into account. To truly understand China, one has to be mindful of differences at these granular levels. This is why Baiguan will continue to tell stories of these different human groups with both data and on-the-ground insights. This is the main task of our Consumer section.

3. Now comes the part that sets us apart from typical business and finance newsletters: we believe that to truly understand China, you can't avoid talking about politics. Unlike Western societies, the government is a fundamental driving force in China. In fact, a lot of anxiety comes from not being able to anticipate the Chinese government's next move. There are many causes for this anxiety, and we will only name a few here:

   1. Picking the wrong narrative. In the West, much of the narrative is about the government vs. the people, and about checks and balances on government powers to protect civil liberties. But we believe there is a more fitting narrative for an East Asian society: that of a family, of parents versus children. Sure, parents are authority figures who cannot be solely decided by electoral results, but likewise, there are also certain expectations for parents to take good care of their children. Public opinions also matter a lot in China, in the same way parents care about how their children evaluate them. Provided the intention is not to destroy the family, there is also diversity in both public and non-public debates, in the same way parents and children can interact and debate over dinner tables. (For more on this, we highly recommend this YouTube video explaining different narratives.)

   2. A lack of understanding of history. As the civilization with the longest continuous history, China cannot be interpreted without reference to its past. Any child born in this country is imbued with a volume of history too dense to forget, and so the past stories will inform decisions today. And this is what our most popular post to date is all about.

   3. Imagining the Chinese government as a single, unthinking monolith. When people think of China, they often visualize uniformity, such as armies goose-stepping with exact precision, or yes-men clapping hands and rubber-stamping pre-decided decisions. However, it's important to understand that these gestures are mere choreography, primarily intended to project an image of unity for a domestic audience. We, the serious readers of this newsletter with a real stake, should know better that the absence of presented individuality doesn't negate the existence of individual agency. Within the layers of bureaucracy, party committees, ministries, bureaus, offices, provinces, prefectures, counties, townships, and villages, real people exist, with diverse and potentially conflicting aims and interests. In fact, there is no shortage of open debates if you know where to look. (One of the best examples is the acclaimed 2007 Chinese TV classic, Ming Dynasty 1566 (IMDb, full series on Youtube). It illustrates how even ancient China’s imperial monarchies weren't simple top-down structures but complex webs of actions and reactions from all stakeholders.)

   Our job, in this regard, is to help you appreciate an alternative narrative that may be more effective, the long and winding history, as well as the nuances in policy deliberation and decision-making. This will enable you to more quickly put unexpected changes into context the next time they occur. This is the main task of the China Context section.

Baiguan’s pledge to quality and goal to re-invent news stories

With our mission, we have no intention of becoming a traditional ad-supported news agency or being funded as mouthpieces for any ideology.

In this sense, we are also re-inventing how news stories are produced. We strive to be a no-bullshit, data-native news organization. Our commitment lies in delivering actionable and fact-based content, which requires the sustained effort of a dedicated hybrid team comprising top researchers, writers, analysts and engineers.

Therefore, our content operates on a paid model that enables us to support this remarkable team, fund the extensive data collection and curation process, and maintain the integrity of our analysis

For existing institutional clients of BigOne Lab, you are entitled to 1 complimentary professional-tier subscription for each $10,000 spent annually at BigOne Lab. Please contact your sales representative for complimentary access if you meet this criteria.

For readers who have the option of having the subscription expensed by the company, we have put together an email template that will hopefully save you time:

Email Template for Baiguan Reimbursement

Let's not, in the words of Sir Winston Churchill, waste a good crisis.

Covid, war, de-globalization, regional conflicts, great power competition—what we are experiencing reflects the shared concerns of the world we live in. Countless corporations, investors, and individuals are enduring this challenging period together with us, grappling with varying degrees of pain and anxiety.

However, the disruption of old orders gives rise to innovative business ventures and for the brave ones, promises a brighter future. Seizing these opportunities requires us all to develop new ways of seeing the holistic picture and thinking critically when making judgments. In understanding China in the digital era, employing data and technology becomes even more crucial to grasp the multifaceted nature of the country.

So welcome to Baiguan—the gateway to China context, data and insights.

Let’s not, let a good crisis go to waste, and we wish you discover your next triumph along the way.

Amber, Mu, Robert, and the Baiguan Team,

2023