Business Solutions

Chinese crisis behind the mist

 4-MINUTE READ

Chinese downturn and stock market crisis development is hard to forecast, nevertheless the possibility of repetition of the World Economic Crisis 2008 shakes up the global society. There is no time to sit back and observe, what opportunities might be hidden behind Chinese economic wall?

Growth is
still there

It is impossible to emphasise too much the importance that Chinese economic growth is still there regardless the speculations. There is the number of the sectors to expect the progress from. Building up the digital economy in order to cut the costs, boost transparency, reduce money laundering and tax evasion is on the agenda. Chinese central bank has announced speeding up the process of establishing the digital currency, building new financial infrastructure and complete payment system. Regarding the renewable energy source development, China has been ranked first worldwide in PV power capacity overtaking Germany. According to McKinsey, China's life insurance market steps up on the third position becoming one of the largest in the world. KPMG reports that automakers will continue to gain larger market share globally. Moreover, despite all the odds, China's outsourcing services show the growth for both onshore and offshore contracts. And let's not forget the global Industry 4.0, which is being achieved with the robotics. And who is more advanced in robotics and technological advanced than China? Subdued economic growth is not the best piece of news, however, it does not close the doors of opportunities.

Real estate
free of carbon

The development of the eco-solutions is not going to stop. Exactly opposite: China is aiming to become worldwide benchmarks. Besides, the environmental track records have already nudged to expand the efforts and investments towards green technologies and Eco Cities constructions. 2018 will stand out as the10th anniversary for Tianjin Eco City, the Chinese natural zero-carbon project carried by Ramboll Group. It is being developed by the Sino-Singapore Tianjin Eco-city Investment and Development Company Ltd (SSTEC) which the Singapore Consortium (led by Keppel Corporation) and the Chinese Consortium (led by Tianjin TEDA Investment Holdings) both have 50% equity in. The city is carbon free with lots of gardens, green terraces and facades. The architectures solved the possible overheating problems having facades that offer sun protection in the summertime and buildings that let in sunlight during cooler times.

High-speed
investments
into hight-tech

Recognising the short-coming megacities which will rise the buildings up in the sky, KONE Corporation has opened the world's tallest elevator test towers in Eastern China. The company is committed to developing the R&D in mid- and high-rise elevator technology. The tower reaches 235,6 meters and contains 12 shafts which can be modified for the research purposes. The permanent function of the tower is to test a high-speed elevator which speed exceeds up to 10m/s. Moreover, under R&D responsibilities is the world's first double-decker elevator with KONE UltraRope(TM) super-light rope technology.

"The new test tower demonstrates our strong commitment to developing R&D in mid- and high-rise elevator technology. We are the industry leader in China, and this investment will further strengthen our position in a rapidly changing market. Now that we have additional capacity and capability to test our innovations, we will be able to deliver new products faster than ever before," says Henrik Ehrnrooth, CEO and President at KONE.

Is the oil
behind?

On January 19th, China announced its official annual GDP growth in 2015 was 6,9%, which is only 0,4% lower than in previous year. That is some accomplishment, given the Chinese stockmarket crisis, the currency fluctuation and the global commodity collapse. The downward trending might be even worse than reported by governmental officials, argue experts and analytics. "The two main concerns are that growth is weaker than the government says and that much worse lies ahead", states the Economist. The uncertainty makes investors panicking exacerbating the situation while economists call to keep calm.

China's GDP 2015

Brad McMillan argues that oil is to be blamed for the China's market plunge. The instability of relationship between Saudi Arabia and Iran led to the Chinese market drop along with reasons mentioned before, according to McMillan. The effect of the crisis touches the global economy, especially countries which are highly dependent on the import of oil. In the better scenario, latest events should boost the sustainable development and renewable energy production faster than environmental carbon problems. Businesses in Europe should recognise the bright side and put stakes in the ground developing renewable energy sector.

Insight Box

Unstability of the Chinese economic growth, uncertainty with the numbers given by the government, and worldwide speculations on the topic cause near-panic fears for investors all over the world. On the other hand, while one some sit and observe others get ready to take actions. The slowdown in the economic growth might only give an extra manoeuvre place for its growth.

#Chinese economic crisis #opportunity #stockmarket #oil #futuretrends

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