China News Service, Beijing, July 24 (Wang Enbo Lei Xiaolin) The new crown pneumonia epidemic has lasted for more than a year. Although the global economy has begun to recover, it is still shrouded in various uncertainties.

Former Chinese Treasury Minister Lou Jiwei and former US Treasury Secretary Summers held a “cloud” conversation at the 2021 Beijing Summit of the Global Wealth Management Forum on the 24th. They agreed that cooperation is the answer to the challenge.

　　Under the impact of the epidemic, major economies have launched large-scale stimulus policies in the past year.

Today, the negative impact of this "double-edged sword" has gradually emerged-the global inflation alarm is sounding.

　　In Lou Jiwei's view, in the face of the impact of the epidemic, it is necessary for countries to introduce extremely loose fiscal and monetary policies.

But once the economy recovers, inflationary pressures will arise as normal demand resumes.

In particular, commodity prices are leading and will rise first. "We are already in this situation."

　　Lou Jiwei said that loose fiscal and monetary policies are designed to relieve difficulties, and once the economy recovers, some of the policies can be gradually withdrawn.

However, in the face of high leverage and anti-globalization, policies of various countries are relatively cautious.

China emphasizes that fiscal and monetary policies should not be turned sharply, and at the same time, it insists on continuing to deleverage.

The United States is discussing when to slowly withdraw from the easing policy, because excessive liquidity will cause inflation and possibly stagflation.

　　Summers bluntly stated that the US fiscal stimulus has been very strong in the past 16 months, while the increase in the savings rate has created sufficient liquidity in bank accounts, which has not occurred after World War II.

"I do have some concerns. The inflation problem will afflict the United States in the medium term." He said that the core inflation rate in the United States is now high. If the quantitative easing policy is ended too late, there will be inflation risks. The grasp of the point is very important.

　　When it comes to US policy steps, Summers does not believe that the Fed will take the risk of a certain loss in the economy to control inflation expectations. “When inflation becomes an actual problem, the Fed may change its posture.”

　　In the process of global recovery, China and the United States have played a pivotal role.

Both former finance ministers agreed that there is room for cooperation between China and the United States in jointly addressing climate change and promoting green recovery.

　　"There are indeed people in the United States who are still denying the fact of climate change, but as time goes by, more and more people will realize that climate change is critical." Summers said that people need to realize that the green economy can help reduce the risk. Energy costs have allowed more people to participate in economic development, and the momentum of green economic cooperation between the United States and China has become more and more obvious.

He emphasized that in the face of common challenges such as climate change and the epidemic, all countries need to unite and "we must cooperate."

　　Speaking of green recovery, Lou Jiwei noted that the Biden government has proposed to vigorously build charging piles for new energy vehicles in its new infrastructure plan.

He believes that the efficiency of the U.S. power grid is low. Under the current low interest rate environment, market-based financing and increased investment for transformation and upgrading will not necessarily increase costs for users, but will greatly reduce grid losses, improve efficiency, and save energy. .

In this regard, China and the United States can cooperate.

　　In 2020, China is the only major economy in the world to achieve positive growth.

Entering 2021, China's economy will continue to recover steadily. What benefits will this bring to the world?

　　Lou Jiwei said that China is a huge market with strong purchasing power, and the financial market is becoming more and more attractive. With a complete industrial chain, China is constantly using new technologies to reduce the adverse effects of rising labor costs.

Over the past 40 years, China's reform and opening up logically means accepting and integrating globalization, but now it is improving the business environment in accordance with international standards.

All this will bring opportunities for global cooperation.

　　Summers also agreed that China's achievements in reform and opening up have profoundly affected all aspects of the world economy.

He believes that the construction of the international system requires joint discussions and collaboration among all countries.

"We should live in harmony on the earth where we live together, defend our common interests, and carry out more cooperation." (End)