The conflict between Russia and Ukraine has been going on for nearly two months.
The conflict is not only a military conflict between Russia and Ukraine, but also an economic war between Russia and the United States and its allies.
Under the chain reaction of war and economic sanctions, the world stock market, foreign exchange market, crude oil, grain and non-ferrous metal futures markets have been fluctuating repeatedly.
How the Russian-Ukrainian conflict will affect the world economy in the post-crisis period, this issue invites experts to discuss in depth.
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Xu Xiangmei, director of the theory department and researcher of Economic Daily News
Global Industrial Chain Supply Chain Worse
Moderator: What is the impact of the Russian-Ukrainian conflict on the global industrial chain and supply chain?
Huang Hanquan (Director and Researcher of the Price and Cost Investigation Center of the National Development and Reform Commission): In recent years, due to the combined effects of multiple factors such as anti-globalization, rising trade protectionism, and the new crown pneumonia epidemic, the safe and stable operation of the global industrial chain and supply chain has been severely impacted.
The conflict between Russia and Ukraine has brought a new blow to the already battered global industrial chain and supply chain, and the world economic recovery is facing more severe and complex challenges and more uncertainties.
Russia and Ukraine, as important suppliers of global energy, industrial raw materials and agricultural products, as well as important transportation channels connecting Eurasia, are important participants in major global industries, and have an influence that "affects the whole body".
The Russian-Ukrainian conflict and the resulting economic sanctions have brought a greater storm to the already unstable global industrial chain and supply chain.
This impact can be discussed from both short-term and mid-term and long-term perspectives.
In the short term, the impact of the Russian-Ukrainian conflict on the global industrial chain and supply chain is prominently manifested in the interruption of raw material supply, the shortage of parts and components, and the blockage of logistics. The main impact is concentrated in the following industries and fields.
First, the global "core" shortage problem may worsen.
Russia and Ukraine are the key sources of metal palladium and special gases that are indispensable for the production of semiconductor chips. Russia produces about 40% of the world's palladium, and Ukraine supplies nearly 70% of the world's high-purity neon gas, 40% of krypton gas and 30% of the world's high-purity neon gas. Xenon, neon and palladium used in U.S. semiconductor chip manufacturing are imported almost entirely from Russia and Ukraine.
The conflict between Russia and Ukraine has led to the temporary interruption of the supply of special gases such as neon, krypton, and xenon, and palladium, and pushed up the global prices of neon and palladium.
The second is to exacerbate the shortage of auto parts supply.
There are many related industries in the automotive industry, the industry chain is long, and cross-border cooperation in the supply chain is very common.
Since the outbreak of the Russian-Ukrainian conflict, world-renowned auto companies have closed their parts manufacturing factories in Russia and Ukraine. In Ukraine alone, 38 factories have been temporarily closed. The products involve wires and cables, production line covers, electronic products, car seats, etc. , the supply chain of the automotive industry chain has been disrupted again, leading to a number of German car manufacturers such as Volkswagen, BMW, Mercedes-Benz, etc. recently announced to reduce or even stop production.
The third is to affect the stable supply of important metals such as nickel, titanium and aluminum.
Russia and Ukraine are the world's major producers and exporters of important metals such as nickel, titanium, and aluminum. For example, Russia's nickel production will account for 11% of the world's total in 2021, ranking third in the world after Indonesia and the Philippines.
Affected by the situation in Russia and Ukraine, on March 8, the price of nickel metal on the London Metal Exchange exceeded US$100,000 per ton for the first time, hitting a record high, which is called "demon nickel".
Nickel, titanium, aluminum and other metals are essential upstream key materials for the production of aviation, automobile, chemical, equipment and other manufacturing industries. For example, Boeing, Airbus and other aircraft and aero-engine manufacturing industries require titanium, and nickel can be used to make stainless steel and other industries. Electric vehicle batteries, the blockage of the supply of these metals will inevitably affect the normal operation of industrial chains such as aviation, electric vehicles, and stainless steel.
The fourth is to cause the congestion of sea, land and air logistics and the increase of transportation costs.
Russia and Ukraine are important channels for the transport of goods in Europe and Asia.
The conflict between Russia and Ukraine not only cut off the Black Sea shipping route through Ukraine, but also caused most of the air and land transportation through Ukraine and Russia to be suspended. Multinational logistics companies had to choose longer Middle East routes as an alternative, including Maersk Line and Mediterranean Shipping. The international shipping giants in China even stopped accepting Eurasian freight orders via Russia and Ukraine, which not only caused a large number of cargo transportation blockages and logistics disruptions, but also further pushed up transportation costs since the epidemic.
In the medium and long term, the adjustment and reconstruction of the global industrial chain and supply chain will be accelerated by the conflict between Russia and Ukraine.
In fact, the adjustment of the global industrial chain and supply chain has been going on in recent years, especially since 2018, affected by the rise of trade protectionism, Sino-US trade friction, the new crown pneumonia epidemic, etc., the highly interdependent countries formed under the background of globalization The industrial chain and supply chain have exposed its fragility and risk. In order to reduce the risk of industrial chain and supply chain, major economies have emphasized strengthening their own controllability of key industrial chains and improving the flexibility of key supply chains.
Affected by this, the layout of the global industrial chain and supply chain has changed from the principle of comparative cost advantage to taking into account cost, benefit and safety. The maximization of cost-effectiveness is no longer the most important decisive factor in determining the global industrial division of labor. Risk and safety have entered as new variables. The production function has become an important consideration affecting the layout of processing and manufacturing bases for multinational companies, and many companies are even willing to sacrifice part of their benefits to ensure safety.
Under this logic, multinational enterprises pay more attention to the stability and security of the industrial chain and supply chain, especially reducing dependence on external procurement and implementing the strategy of supply chain diversification.
The global industrial division of labor system is facing reorganization, and short-chain, decentralized, localized, regionalized, and camped to meet security requirements have become the direction of adjustment of the global industrial chain and supply chain. The conflict between Russia and Ukraine has further exacerbated this trend.
It is undeniable that in the current context of intensified strategic games among major powers, the spread of the epidemic, and the outbreak of geopolitical conflicts, the adjustment of the industrial chain and supply chain may be "individually rational" for the major powers, but it has implications for the world as a whole. It is called "synthesis fallacy", because it significantly increases the operating cost of the global industrial chain and supply chain, reduces the efficiency of the world economy, and is not conducive to the smooth and smooth operation of the world economy and to get out of the haze of the impact of the epidemic as soon as possible.
It is both a battle of geography and a battle of currency
Moderator: What is the impact of the Russian-Ukrainian conflict on the global financial landscape?
Zhang Monan (Chief Researcher of the US-Europe Institute of the China Center for International Economic Exchanges): At present, financial sanctions have become a normalized tool and an economic weapon for big-power games to replace "hot war" and "cold war".
The escalating conflict between Russia and Ukraine and the increasing financial sanctions imposed by the United States and the West on Russia are bound to become a catalyst for changing the future international financial order, and promote profound evolution and adjustment of the international monetary system and the global financial landscape.
Since the conflict between Russia and Ukraine, the United States and the West have imposed comprehensive, indiscriminate and unprecedented sanctions on Russia.
Financial sanctions are particularly severe. They have successively frozen the overseas assets of the Russian Central Bank, kicked Russia's major banks out of the Society for Worldwide Interbank Financial Telecommunication (SWIFT), restricted financing to Russian financial institutions and other leading companies in the industry, and sold Russian financial assets. Downgrading Russia’s sovereign credit rating to junk, etc., the U.S. Treasury Department even took out financial killers such as prohibiting the Russian government from repaying U.S. dollar debts through U.S. bank accounts, aiming to shake Russia’s financial infrastructure, crack down on the Russian financial system, and cut off its use of U.S. dollars channel, weakening Russia's ability to raise funds overseas and self-rescue.
Affected by the sanctions, the Russian financial market once experienced violent turbulence, and the ruble depreciated sharply. In particular, Russia may face the risk of a historic default due to its inability to enter the international debt repayment market.
In recent years, although Russia has established a shield against financial sanctions to a certain extent, and has also taken some countermeasures since the conflict between Russia and Ukraine and the sanctions imposed by the United States and Europe, Russia's economy and finance will inevitably suffer heavy losses.
The Russian-Ukrainian conflict is not only a geographical dispute, but also a currency dispute.
The cracks in the existing international monetary system have appeared, and the curtain of a new international monetary system is being opened.
The U.S. dollar accounts for 40% of international payments and 59% of the global reserve currency. The U.S. dollar's hegemony status cannot be shaken in the short term.
However, using the dollar as a weapon is what is called financial warfare.
The freezing of a country's reserve assets of hundreds of billions of dollars by the United States and the West not only casts a shadow over the stability and reliability of the international monetary and financial system and order, but also makes the world question "risk-free assets" such as reserve assets. This in turn subverts the perception of the current global payment and reserve system.
The force of "de-dollarization" will accelerate the profound adjustment and reconstruction of the Jamaican system and the international financial landscape after World War II.
First, the process of "de-dollarization" of the international reserve currency structure will be further accelerated.
The unprecedented sanctions imposed by the United States and the West on Russia have fully exposed the shortcomings of the world economic system’s over-reliance on the U.S. dollar and the U.S. financial system, which will make all countries in the world prioritize the security of reserve assets and prompt more countries to seek foreign exchange reserves and settlement currencies. And the diversification of the payment system, accelerate the process of "de-dollarization", and then shake the foundation of the current international financial system.
In response to sanctions, Russia announced that in the fields of energy and commodities, it will directly settle settlements with "unfriendly countries" in rubles.
Meanwhile, India’s central bank is exploring with Russia’s central bank a “rupee-ruble” trade payment mechanism to bypass the dollar.
Saudi Arabia is also actively negotiating with China to denominate some of its oil sales to China in yuan.
Previously, 17% of Sino-Russian bilateral trade was settled in RMB. The conflict between Russia and Ukraine and sanctions against Russia will push the proportion of RMB settlement payments to continue to rise.
These new strategic trends of emerging economies are bound to weaken the dominance of the US dollar in the global oil market and have a huge impact on the petrodollar system.
Second, the flow of international capital and the structure of global creditor's rights and debts will become more decentralized.
Financial sanctions will profoundly change the global capital flow and asset allocation structure, and it cannot rule out the accelerated migration of international capital flows from Wall Street to other international financial centers.
Financial sanctions against Russia will also lead to a more fragmented global creditor-debt structure.
For security reasons, companies and financial institutions in countries in Asia, Latin America, and Africa are likely to reduce US dollar financing to reduce the risk of being "hunted" by the US and European governments.
Under this pattern, global cross-border capital flows will form a diversified currency cycle based on the traditional US dollar and euro, and external financial assets will flow to trusted regions and even return to China.
Again, SWIFT's credibility as a global financial infrastructure is seriously challenged.
Sanctions have greatly questioned its neutrality as a global financial infrastructure, which has prompted countries to actively seek alternatives, accelerate the development of the global non-SWIFT payment settlement system, and form a bilateral or small multilateral payment settlement pattern.
At present, more than 20 countries have established independent financial clearing systems, and this crisis has directly spawned the establishment of new payment and settlement systems in important energy trading countries.
Once the new payment and settlement pattern takes shape, the proportion of the US dollar will further decline, and there will be two or more sets of payment and settlement rules and standards. Apoliticalization will become an important consideration for a country to choose payment and settlement channels, which will inevitably accelerate the reorganization of the international monetary system and the global financial order. plastic.
or will change the pattern of world food supply
Moderator: What is the impact of the Russian-Ukrainian conflict on the global food market?
Cheng Guoqiang (Professor of the School of Agriculture and Rural Development, Renmin University of China, Dean of the National Institute of Food Security Strategy): Russia and Ukraine are important food suppliers in the world. Russia is the world's largest wheat exporter and plays a pivotal role in the international food market.
In 2021, Russia will export 32.9 million tons of wheat, accounting for 18% of the world; Ukraine will export 20 million tons of wheat, accounting for 10% of the world; the two countries will export 19% of the world's corn, 63% of sunflower oil, and 63% of rapeseed oil. 15% globally.
As the world's largest grain production and exporting countries, Russia and Ukraine have a significant impact on the global grain market and supply pattern.
First, it will seriously impact the grain production and export of both sides.
First, affected by the conflict, Ukrainian grain and oil processing enterprises have stopped production, ports have been closed, and logistics infrastructure such as railways have been severely damaged, and grain exports have been hindered.
At the same time, food production in the heart of the conflict in Ukraine has been hit.
Second, Russia is subject to economic sanctions by the United States and other Western countries, which not only hinders the export of grain, but also affects its import of pesticides, seeds and other agricultural materials from the international market. This has led to a decrease in grain production this year, putting the overall global grain supply level at greater risk.
Third, as the conflict intensifies, both Russia and Ukraine have implemented grain export restrictions. For example, Ukraine has imposed export license restrictions on wheat and other grain and oil products, which will further deteriorate the global grain supply situation and affect the stability of the global grain market.
Second, it has led to the disruption of the global food supply chain and the tightening of market supply, driving up food prices sharply.
The conflict has led to the obstruction of grain exports between Russia and Ukraine, directly affecting the global supply chain of grain and oil products such as wheat, barley, corn, and vegetable oil, and endangering the food supply of countries that are highly dependent on imports from Russia and Ukraine, especially more than 50 countries in North Africa, West Asia and Central Asia. developing countries.
Among them, more than 60% of the wheat imports in Egypt, Turkey, Bangladesh and Iran come from Russia and Ukraine. The conflict between Russia and Ukraine has caused the food security risk of 500 million people in the above four countries to rise suddenly.
In the past two years, due to the continuous spread of the global new crown pneumonia epidemic, international food prices have been running at a high level. This trend has intensified the conflict between Russia and Ukraine, driving international food prices to rise further.
Since the beginning of this year, the price of wheat futures on the Chicago Board of Trade has risen from 758 cents per bushel to 1045.25 cents per bushel, a cumulative increase of 37.9%; corn has risen by 28%; soybeans have risen by 25.2%.
From the perspective of export prices, the prices of feed and milling wheat in the Black Sea region in February this year were US$300/ton and US$320/ton respectively, and climbed to US$352/ton and US$412/ton in March.
Third, it affects the supply of fertilizers and grain production in some countries.
Russia is the world's main supplier of chemical fertilizers, the world's largest exporter of nitrogen fertilizers and urea, the second largest exporter of potash fertilizers and the third largest exporter of phosphate fertilizers.
Before the Russia-Ukraine conflict, Russia's annual output of potash fertilizer was 13.5 million tons, accounting for 20% of global output; its export was 10.84 million tons, accounting for 19% of global trade volume, which had a pivotal impact on global fertilizer supply.
Since the conflict between Russia and Ukraine, Russia has announced a ban on the export of chemical fertilizers, and the impact of economic sanctions on Russia's trade embargo has further exacerbated the shortage of global fertilizer supply and further transmitted the risk of food production to other regions.
It is understood that in some countries in Latin America, Eastern Europe and Central Asia, 30% of fertilizer imports come from Russia. The conflict between Russia and Ukraine will seriously affect the grain production of these countries, and the risk of grain production reduction will increase.
Fourth, in the long run, the conflict between Russia and Ukraine may reshape the global food supply pattern.
Russia and Ukraine are the world's important food suppliers with rapid development in the past 20 years. The average annual output of Russian wheat from 2000 to 2009 increased to 83 million tons before the conflict between Russia and Ukraine, nearly 1 times the world's total. Wheat output increased from 6.4% to 10.8%; wheat export capacity increased from 9.62 million tons per year from 2000 to 2009 to 35 million tons before the conflict between Russia and Ukraine, making it the world's largest wheat exporter.
From 2000 to 2009, the average annual output of Ukrainian wheat increased from 18 million tons to 29 million tons before the Russian-Ukrainian conflict; the average annual wheat export from 2000 to 2009 was less than 3% of the world trade volume, and increased to 29 million tons before the Russian-Ukrainian conflict. top 10%.
Before the Russia-Ukraine conflict, grain exports from Russia and Ukraine accounted for one-third of the world's total, and the Black Sea region became the world's second largest food supplier after North America.
The escalating conflict between Russia and Ukraine will restrict the development momentum of grain production and trade in the Black Sea region to a large extent, which is seriously detrimental to the diversified balance pattern of the global grain supply chain, and greatly increases the risk of instability and uncertainty in global food security.
Changes in the global energy market are in danger
Moderator: What is the impact of the Russian-Ukrainian conflict on the global energy market?
Liu Gan [Executive Deputy Director of the Center for Russian and Central Asian Studies, China University of Petroleum (Beijing)]: It has been nearly two months since Russia's "special military operation" against Ukraine.
Western countries, led by the United States, have imposed tougher sanctions on Russia.
Russia has used its oil and gas export status to countermeasures, requiring "unfriendly countries" to use rubles to purchase natural gas.
In the short term, the conflict between Russia and Ukraine will have a serious impact on the global energy market.
In the long run, the existing international energy system will accelerate the transformation. Although there are great risks, there are still opportunities to be found.
First, the tense geopolitical situation caused by the conflict between Russia and Ukraine will continue to affect the balance of the market supply and demand system.
For the purpose of sanctions, the United States and the United Kingdom have announced that they will stop importing Russian crude oil, and many European countries have also indicated that they will gradually reduce their dependence on Russian oil and gas.
However, Russia exports 10 percent of global oil trade and exports nearly 20 percent of global trade in natural gas.
In the short term, neither Saudi Arabia nor the United States have the possibility of completely replacing Russia.
In order to achieve the goal of reducing dependence on Russia, Europe will increase its efforts to find sources of oil and gas supply from the Middle East, North America and Australia, while Russia needs more energy consumption markets from developing economies such as China and India.
In the long run, the gradual reduction of Europe's dependence on Russian energy will lead to a change in the flow of global oil and gas trade. The global oil and gas supply system with diversified supply sources, high liquidity and regional market linkage will be fragmented by sanctions and countermeasures. Possibility of bipolar systems or parallel markets.
Second, the global energy supply and demand shortage, Western financial sanctions, and Russia's countermeasures to settle energy resource products in rubles are seriously impacting the international energy pricing system and settlement system.
On the one hand, the tight oil and gas supply and demand that began in the second half of last year has caused prices to rise sharply. The conflict between Russia and Ukraine and sanctions against Russia have kept global oil and gas prices at a high level.
Not long ago, the international oil price exceeded US$130 per barrel and is still above US$100 per barrel. The spot price of natural gas in Europe has repeatedly set a record high, further pushing up global inflation.
On the other hand, Russia's countermeasures have caused severe price differentiation in regional energy markets.
For example, the spot price of natural gas in Europe has skyrocketed under the risk of supply cuts, while India has begun to buy Russian crude oil at a discount.
In addition, although the status of the US dollar and the euro in the global commodity trade is still stable in the short term, the use of local currency settlement in energy trade will become an important choice for some major energy countries to ensure transaction security and diversify risks.
Once again, there will be a major shift in the global energy investment system.
In recent years, the "dual-carbon" transition to cope with global climate change is accelerating, in which international energy companies play the main role of investment, increasing investment in renewable energy and reducing traditional fossil energy business.
The Russian-Ukrainian conflict has caused international oil companies to withdraw or suspend their oil and gas operations in Russia under pressure from the public and the government, increase investment in renewable energy, in pursuit of reducing dependence on Russia, and objectively accelerate the realization of "carbon neutrality" "The goal.
It is foreseeable that Western countries will increase investment in renewable energy, and breakthroughs in new technologies such as energy saving and energy storage and the expansion of the market scale will be higher than previously predicted.
For example, in early March, Germany proposed to bring forward the goal of 100% renewable energy generation to 2035.
However, due to the geographical and climatic limitations of renewable energy, as well as the instability of rare metal prices, the transformation process of the energy market will also see more frequent fluctuations.
Since the beginning of this year, the price of electric vehicles has been raised several times due to the increase in upstream raw material prices.
Finally, the politicization trend of the energy market is obvious, and the game is more intense.
Some countries use energy tools in their foreign policies to label energy products in specific regions as "unsafe" and "unclean", making international energy production, consumption and cross-border transportation face obstacles and higher technical barriers.
If countries fail to cooperate fully, it will be more difficult to deal with global climate change and realize energy transition.
But it should also be noted that there are also opportunities in the process of changing the global energy market.
On the one hand, changes in the flow of global energy trade will give China the opportunity to coordinate pipeline gas and LNG imports, coordinate oil and gas contracts from different sources such as Central Asia, Russia, the Middle East, and Australia, optimize resource allocation through market mechanisms, and ensure energy security. Safe and economical, and further enhance global trade and pricing power.
On the other hand, the accelerated transformation of global energy will provide new opportunities for the high-quality development of China's economy, thereby promoting the realization of China's "dual carbon" goal, and promoting the upgrading of the energy industry and technological progress.