What is happening in the world economic pattern in the post-crisis era? Countries in the United States and Europe frequently introduce economic stimulus measures and even sacrifice the banner of trade protection. The boosting effect is still not obvious enough. What are the reasons? Will the world economy become more turbulent and the light of emerging markets will continue? Recently, the annual meeting of the China World Economic Association was held at the Antai College of Economics and Management of Shanghai Jiaotong University. The topic focused on topics such as global economic imbalances and governance, international trade and capital flows, and China's economic relations with major powers.
During the meeting, Zhang Yuyan, president of the China World Economics Association and director of the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, accepted an interview with reporters around the hotspot. He believes that global economic growth continues to slow down, and the pace of economic and trade recovery is more difficult. The specific performance is that the “Japaneseization†of developed economies is obvious. As an important driving force for globalization, the Chinese economy needs to pay close attention to the new trend of the world economy, especially the economic and trade cooperation between emerging economies and developing countries, and be wary of liquidity spillovers and commodity price trends.
The global economy is at the edge of the decline of 3% growth
Reporter: The International Monetary Fund and the World Bank, which just closed recently, have given the "global slowdown" to the world economic trend. What kind of "uncertainty" and "downside risk" does the world economy face? Will the situation continue to deteriorate?
Zhang Yuyan: To grasp the situation of the world economy, we can analyze it based on five indicators.
The first is the growth rate of the global economy. Due to the long-delayed European debt crisis, the nearing of the US fiscal cliff, and the difficult transition of emerging economies, the global output growth rate this year is only 3.3%. In general, if the global economy grows at an annual rate of less than 3%, there is a recession. It can be seen that it is not an exaggeration to say that the world economy is on the verge of recession this year. Specifically, the US growth rate is about 2.2% this year, and the euro zone may be -0.4%; the economic growth rate of emerging economies and developing countries will also decline, about 5 percent this year.
The second is inflation. Global inflation this year is generally stable and declining. However, it should be noted that the lower the inflation rate, the better, because it is linked to the decline in the overall economic growth rate. On the other hand, with the introduction of the third quantitative easing monetary policy in the United States and the introduction of the OMT, which is the direct currency transaction, by the European Central Bank, the liquidity is bound to increase substantially, and the future trend of the inflation rate is not optimistic.
The third is the unemployment rate. Over the years, especially since the outbreak of the international financial crisis, the unemployment rate in developed economies has remained high. The unemployment rate in the United States is about 8.2% on average this year. Although it has declined from last year and the previous year, it is still at a historical high. If the labor participation rate declines, the actual unemployment rate in the United States should be around 14%. The situation in the Eurozone is even worse, with unemployment rates above 10% for three consecutive years.
The fourth is trade. In the past three years, the slowdown in global trade growth has been very clear: 12.8% in 2010 and 5.9% in 2011. The WTO originally predicted that trade growth may reach double digits this year, but the latest forecast is significantly reduced to 3.2%. In addition to the decline in growth rate, there is another phenomenon in international trade that deserves attention. Although the globalization process is accelerating, global trade is showing a trend of group development. For example, Japan’s exports to ASEAN and China and South Korea account for 50% of its total exports, Germany’s exports to the EU account for 67% of its total exports, and more than half of US exports are concentrated in neighboring regions such as Canada, Mexico and Latin America.
The fifth is the proportion of government debt to GDP. In this regard, we immediately think of the European debt crisis. But the data shows that the euro zone's debt-to-GDP ratio in the year was 6.3% in 2010, 4.1% last year, and only 3.2% this year. How much is the United States? In 2010, it was 10.5%, in 2011 it was 9.6%, and in 2012 it was 8.1%. Japan is similar to the United States. For three consecutive years, debt has accounted for more than 9% of GDP, and this year is likely to exceed 10%. It can be seen that not only is there a problem in Europe, but the debt problems of the entire developed economies are very serious and difficult to solve in the short term.
As for the situation of the world economy next year, my view is that it will be slightly better than this year. It is more likely that the economic growth rate will be half to one percentage point higher.
The economy of developed countries as a whole is "Japanese"
Reporter: The European debt crisis, which continues to ferment, is a major risk factor affecting global financial stability. Some people have pointed out that people who are "lazy" but still spend a lot of money are the main reason for the spread of the European debt crisis.
Zhang Yuyan: After the impact of the financial crisis, European and American countries have been trying to put the economy on the right track through policy adjustments, but the effect is not obvious. At present, the situation faced by developed countries is ostensibly a financial problem, but it is actually caused by problems at various levels, such as economic, social and political. In addition to the laborer issues you mentioned, there are also reasons why the currency union does not match the fiscal union. Looking further, the problem is mainly due to the structural contradictions in the development of these countries, and the overall trend of “Japaneseizationâ€.
The so-called "Japaneseization" trend has four main characteristics:
First, the accumulation of government debt is at or near unsustainable, and the fiscal policy space is getting smaller and smaller.
Second, the failure of conventional monetary policy or the collapse of a “liquidity trapâ€. No matter how low the nominal interest rate is, it does not help. The only thing available in the short term is the unconventional policy, such as the direct expansion of the base currency by the central bank, but this is likely to leave the future.
The third is the aging of the population. This is very obvious in Japan and Europe. The United States looks good, but the retirement of 10,000 "baby boomers" every day has and will continue to put enormous pressure on US finances.
Fourth, political decision-making is difficult. What role should the government play in social and economic life? How to deal with domestic and external competition in the context of informationization and globalization has become the focus of ongoing debate in the United States, and the views of both sides are seriously opposed.
An important consequence of the "Japaneseization" of developed countries is that the economy is growing at a low rate, and its growth rate of 2% - 2.5% is likely to become the norm.
US-European liquidity expansion or monetization of debt
Reporter: Analysts warned that due to the “uncertainty†of the economic and financial environment in Europe and the United States, the risk of economic slowdown in the Asia-Pacific region may be larger than expected and may last longer.
Zhang Yuyan: Various external and internal problems may slow the growth of the Asia-Pacific region, such as the sudden acceleration or slowdown of capital flows, the continued sluggish growth of developed economies, the prevalence of trade protectionism, the prolonged problems of domestic accumulation and unsuitable Economic policy, etc. Overall, Asia Pacific's future growth will slow down over the past 10 years, but it will still be 4 to 5 percentage points higher than the growth rate in Europe and the United States. The main reason is that the Chinese and Indian economies will generally maintain a medium-to-high-speed growth in the next 10 years, such as growth rates of 7% and above.
Reporter: Brazilian Finance Minister Mantega has been complaining that the excessive easing measures in developed economies have brought great inflationary pressures to emerging economies and developing countries, and they are launching a “currency warâ€.
Zhang Yuyan: Indeed, the third quantitative easing in the United States and the unconventional monetary policy such as the “direct currency transaction†of the European Central Bank are likely to lead to an increase in global liquidity, and will be related to global price levels, especially the prices of primary products, capital flows, Exchange rate changes have a big impact. A more obvious impact on China is the preservation of foreign exchange reserves. Behind the liquidity expansion of the United States and Europe is not the purpose of debt monetization, especially worthy of vigilance. After all, some American economists have argued that the inflation rate should be pushed to more than 5% to resolve the US debt problem.
The future trend of commodity prices is an important factor affecting inflation. It depends mainly on the competition between two basic forces: on the one hand, the global economic growth slowdown is not enough to support the continuous rise in commodity prices at the demand level; on the other hand, the extremely loose monetary policy of the United States and Europe is constantly a commodity. The price rises to deliver power. Specific to energy, the sudden loss of control in the Middle East and the breakthrough and widespread use of oil and gas resources in the United States will affect energy prices to varying degrees. One thing worth noting this year is that US energy has a tendency to move toward relative independence. If the United States resolutely follows the path of actively developing and effectively utilizing traditional energy sources such as shale gas, its geopolitical choices will also change, and we need to deal with it in advance.
Advancing the direction of regional cooperation in Northeast Asia should adhere to
Reporter: Recently, the United States "blocked" Huawei and ZTE, and the EU launched anti-dumping investigations against Chinese PV companies, and invariably passed the signal of the malignant expansion of trade protectionism. This is undoubtedly a heavy punch for the recovery of international trade and the recovery of the world economy.
Zhang Yuyan: Trade protectionism is a deadly enemy of healthy economic growth. The United States and Europe block competition from Chinese companies. In the short term, they can protect their domestic markets or certain vested interests, but in the long run, they are still themselves. In the economic downturn, trade protectionism is particularly damaging.
Reporter: According to the latest data, China’s exports in September reached US$186.35 billion, an increase of 9.9%. The monthly export volume reached a record high. Among them, the bilateral trade with ASEAN and Russia and other BRICS countries continues to grow, which is a bright spot. What do you think about this? In the absence of a weak US economic recovery and a debt crisis in Europe, how can the Chinese economy break through in adversity?
Zhang Yuyan: I think the Chinese economy needs to break through. I feel a bit heavy. The slowdown in external demand growth is a fact, and it may be normalized; the use of international rules by the interest groups of developed countries led by the United States to impose various “containment†on us also poses a challenge. However, on the whole, the initiative of China's economic development is still in our own hands.
After more than 30 years of rapid growth, the Chinese economy has stood at a higher new starting point. In the next 10 years, the average annual growth rate of 7%-8% is in line with China's potential growth rate. To achieve this goal, we still have a lot to do. Among them, the most important thing is to accelerate the pace of industrial upgrading, including promoting regional cooperation in Northeast Asia. The three countries of China, Japan and South Korea announced the launch of the free trade zone negotiations in May this year, and the monetary cooperation has made substantial progress. Although the subsequent process of cooperation has been hampered for non-economic reasons, this direction must be adhered to. The total output of China, Japan and South Korea has surpassed the euro zone two or three years ago, and will surpass the United States in a year or two. Some people have commented that the realization of economic integration in Northeast Asia will be a nightmare for the United States. This is not entirely unreasonable and deserves our deep thought.
Thermostatic Concealed Valves,Thermostatic Shower Head,Hand Spray ​Shower Faucet,Ceiling Mounted Shower Faucets
kaiping aida sanitary ware technology co.,ltd , https://www.aidafaucet.com