Cocoon Global Editor’s Pick: Economic News

August 8, 2017


According to official data (July 2017), China's economy grew at an annual rate of 6.9% between April and June, slightly above expectations.



1. China's second quarter growth beats expectations at 6.9%



Many specialists expected China’s economy to slow down due to Beijing’s stringent policies on debt and due to regulations introduced to tame China’s real estate bubble. As many experts expected, domestic investment in real estate fell as a consequence of such governmental directives.


The manufacturing sector was one of the industries driving economic growth in China in the second quarter of 2017. This was the result of intensive investment in both information and communications technologies and in the electronic equipment manufacturing industry. Data shows that manufacturing investment increased by 5.5% from January to July. In addition, the growth in manufacturing investment is likely to follow the general upward trend until the end August.


Car consumption is another factor driving the increase. Because of the now customary mid-year online shopping boom, car consumption saw a 10.4% increase. Data shows that new energy vehicle and SUV sales have respectively increased from 13.6 million to 19.5 million and from 3.785 million to 4.527 million. These appeared to be the most popular cars in China during the period in question.


Investment is still the primary growth driver in a context where public-private investment partnerships are increasingly encouraged. The growth in infrastructure investment is expected to offset the decline in real estate investment; for this reason one could remain optimistic by predicting that general investment will increase steadily over the next 6-12 months. With the economy growing steadily, an increasing number of institutions are likely to gain more and more confidence. This could result into the rise of industrial prices and into an expansion of medium-/long-term credit.



2. China’s Didi invests in Taxify, an Uber rival operating in Europe and Africa



According to TechCrunch, Didi Chuxing - the ride-sharing corporation that forced rival Uber out of the Chinese market - has expanded its international empire by investing in Taxify, another Uber-like company that runs in Europe and in Africa. Didi Chuxing plans to launch in London later this year.



3. London Just Broke a Property Price-Tag Record



On the 27th of July, Hong Kong-based LKK Health Products Group Ltd. bought London ‘Walkie Talkie’ for £1.28 billion ($1.7 billion).


It seems London has lost its attractiveness to international property investors after the Brexit vote; data shows that investment in commercial property is at least 50% lower than in the same period last year. However, Chinese buyers appear to have confidence in the London property market; the LKK Group buy-in proved Chinese investors’ confidence in London once again. The decrease in the value of the British Pound brought by Brexit – potentially resulting into 15- 20% lower entry prices - might be the main factor driving optimism in China.


4. China’s Got a Huge Artificial Intelligence Plan



According to a development plan issued by the State Council, the Chinese government desires to make the artificial intelligence industry a "new, important" driver of economic expansion by 2020. Intelligent robotics, vehicles and virtual reality will be Beijing’s main priorities. By 2030, AI will contribute $15.7 trillion to the worldwide economy.








Edited by Marco Certini



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