The world economy is recovering steadily, and risks in developing countries still need to be vigilant
Wang Huiyao (Director of Globalization Think Tank (CCG))
The World Bank recently released the June issue of the Global Economic Outlook report predicting that global economic growth in 2021 is estimated to reach about 5.6%, China's GDP is expected to grow by 8.5%, and the developed economies of the United States, the European Union and Japan are expected to grow at 6.8% each. , 4.2%, and 2.9%.
The rapid recovery of the world economy mainly depends on the rapid development of multi-country vaccination campaigns, as well as the opening up of various economies and the resumption of economic activities.
China contained the epidemic earlier and is currently the fastest growing economy in the world.
The Chinese Health Commission notified on June 18 that as of June 17, 31 provinces (autonomous regions and municipalities) and the Xinjiang Production and Construction Corps had reported a total of 96.652 million doses of COVID-19 vaccine.
It is expected to join the global "vaccine passport" mutual authentication system and better integrate into the global economic and social restart process.
Regarding the overall development of the world economy in the future, Aihan Goss, Director of the World Bank’s Forecasting Bureau, predicted that there is a process of world economic recovery. By 2022, the global economic growth will remain strong, but global output will be 2% lower than before the epidemic. about.
By the end of 2022, the per capita income of advanced economies is confident to return to normal levels, but only one-third of emerging market and developing economies will return to normal levels of per capita income, which is closely related to the progress of vaccination.
With the repeated spread of the epidemic, the global economic recovery faces various risks and challenges. First, the rapid recovery of the global economy is extremely uneven.
The spillover effects of the economic recovery of developed economies have not yet appeared, the recovery and development of a large number of developing countries and emerging market countries are lagging behind, and there is still a possibility of outbreaks in Latin America and the Caribbean.
Therefore, to achieve the overall development of the world economy, poor countries need to receive more policy attention. In order to deal with the downside risks brought about by the continuous outbreak of the new crown epidemic, it is necessary to develop a systematic and efficient vaccination program across the world.
Secondly, due to delays in economic recovery due to untimely vaccination, tariff increases due to geopolitical factors such as China, the United States, the United States and Europe, and the lack of adequate infrastructure in emerging market countries resulting in low logistics efficiency, the cost of global trade has been pushed up.
In addition, some economies have adopted "expedient measures" in response to the epidemic, that is, loose monetary policies and fiscal policies to stimulate the economy, which have pushed up the risk of global inflation.
Developing countries and emerging economies are facing debt defaults, liquidity is affected, and the recovery of the real economy is also affected.
China's economy as a whole has returned to normal development, and under the leadership of the new development pattern of "double cycles", it is focusing on digital transformation and achieving carbon neutrality.
As a responsible major country, China has the responsibility and ability to make more contributions to stabilizing the expected recovery of the world economy in the face of challenges such as the unbalanced economic development of the global economy, especially in developing countries, the debt crisis, and inflation risks under the epidemic.
Ending the epidemic as soon as possible requires speeding up vaccine distribution and deployment, especially in emerging markets and developing countries and low-income countries.
With the rapid increase in China's vaccination rate, it is important to consider providing more vaccine assistance to developing countries and emerging economies.
Increasing the vaccination rate in developing countries is a necessary measure to control the spread of the epidemic.
From neighboring Asian countries, especially South Asia, Southeast Asia and other countries with close economic and trade exchanges with China, to densely populated countries such as Africa and Latin America but with tight medical facilities and facing the risk of repeated epidemics, only the overall vaccination rate in the world will increase as soon as possible. People and trade interoperability can be realized as soon as possible.
In view of the debt risks and inflation risks of developing countries, we can sign more currency swap agreements with some emerging market countries and developing countries, or increase the purchase of local currency long-term bonds of some emerging market countries and developing countries to help them stabilize the monetary system and Financial order reduces the risk of local currency depreciation and substantial inflation when the liquidity of the US dollar shrinks.
It can also increase cooperation between the BRICS Bank, the Asian Infrastructure Investment Bank and the World Bank, and increase strategic infrastructure investment in emerging market countries and developing countries.
While promoting digital transformation, innovation and green sustainable development, China should focus on strengthening international innovation cooperation, actively participate in the formulation of relevant international rules, and strengthen cooperation in third-party markets in developing countries.
Digital economy and green development are already the two major power sources of the world economy, as well as new areas of international competition.
There is huge room for cooperation between China, the United States and Europe on digital governance and green sustainable development. The United States and Europe have launched relevant discussions to promote the establishment of a China-US-Europe tripartite summit to conduct in-depth institutionalized cooperation on addressing climate change and strengthening digital governance.
In the future, China-EU relations are likely to ease and resolve some of the challenges. Consider setting up a green sovereign fund with the EU and cooperating on green infrastructure or related projects for China, Europe and third parties.
The continuous spread of the new crown epidemic has enabled us to see the practical significance of the concept of a community with a shared future for mankind. Developing countries, especially underdeveloped countries, are relatively vulnerable, and they are also a key link to promote the early end of the global epidemic and the realization of the normal development of the world economy. As the global vaccination rate continues to rise, and with the accelerated reopening of the global economy, helping developing countries better cope with risks and challenges requires China, the United States and Europe and other developed countries to actively work together to promote implementation.