In the face of multiple "headwinds", how can the global economy "move forward against the wind"?
Beijing, March 3 (ZXS) -- During the spring season, the 26 annual meeting of the China Development High-level Forum is being held at the Diaoyutai State Guesthouse in Beijing, where politicians and businessmen gather to explore the prospects of global economic development.
At present, the global economy is facing a "headwind", high inflation, geopolitical conflicts, debt problems and other multiple challenges, the fragility of the global financial system is highlighted, and pre-economic and trade actions can be significantly weakened.
Looking forward to this year, Zhu Min, vice chairman of the China Center for International Economic Exchanges, believes that global financial risks are rising, economic growth is slowing, and geopolitics is full of uncertainty, which have added many challenges to the global economy. Taking the recent collapse of Silicon Valley Bank in the United States as an example, he pointed out that while Silicon Valley banks themselves are not necessarily systemically important banks, the nature of failures is indeed a systemic risk.
"Because of the mismanagement of financial institutions, the Fed's balance sheet has grown significantly over the past decade, and the mismatch between assets and liabilities has made the bankruptcy of banks and other financial institutions inevitable." In the future, we will see more banks with similar problems, and this is systemic risk. This will have a huge impact on the U.S. financial system and the global economy. Zhu Min said.
When it comes to the issue of debt, Li Yang, a member of the Chinese Academy of Social Sciences, also feels the same way. He pointed out that after three years of the pandemic, the "old problem" of global debt has become more serious. Moreover, the current global debt crisis has entered a new phase since 2021, and it has also taken on a different look.
"Before 2021, although the United States has a large amount of debt, the long-term global ultra-low interest rate or even negative interest rate and abundant liquidity supply make the huge debt not too risky to the economy and finance. But after 2021, things are completely different. Li Yang said that under the impact of a series of unexpected factors, such as the new crown epidemic, the Ukraine crisis, and the Fed's sharp interest rate hike, the economic pattern has changed significantly.
Regarding the challenges facing the global economy, Ray Dalio, founder of Bridgewater Investments, used more "striking" terms. He stressed that the world is on the "brink of danger" and may face three "seismic" upheavals: the monetization of huge debts, the huge internal conflicts caused by the gap between wealth and values, and conflicts between international powers, these three huge forces of change, if they occur, will profoundly change the domestic and world order of countries.
In the face of multiple "headwinds", how can the global economy move up to the wind and against the wind? Strengthening cooperation, increasing stability and finding opportunities are the three major paths given by the participants.
"In the context of multiple crises and challenges facing the world, human society should work together to deal with them." Luriel Roubini, a professor at New York University in the United States, said that the current global market turmoil is unprecedented, or will enter a new period of instability from the era of great détente. Greater cooperation and coordination are essential if countries are to continue the peace, prosperity and development of the past decades.
For example, with regard to the debt issue, Li Yang said that the debt problem is a very big problem and cannot be solved by one country. "Now more than ever, we need cooperation and macro policy coordination." For example, on geopolitical issues, Ray Dalio pointed out that the world has now entered a large international geopolitical cycle, and in the face of seemingly irreconcilable differences between countries, how to effectively strengthen international cooperation and avoid provocations and wars will be an important prerequisite for the stable development of the world economy.
In the face of the turbulent global economic environment, Han Wenxiu, deputy director in charge of daily work in the Office of the Central Financial and Economic Commission, stressed that China's economy will be a strong propeller and stable anchor for the recovery and development of the global economy.
"China's average contribution to world economic growth in the past 10 years has exceeded 30%, and this year's contribution rate will be higher than last year, providing scarce market demand and strong impetus for the recovery of the global economy." Han Wenxiu said.
He further stated that China will be a safe haven for international financial security. Some developed countries have sharply tightened monetary policy, bringing spillover effects such as bank bankruptcies, external debt distress, and financial market turmoil. At present, China has no obvious inflationary or deflationary pressure, monetary policy has greater room for maneuver, and China's economic and financial stability will provide positive spillover effects for the volatile international financial market.
China will also bring opportunities for cross-border investment. Han Wenxiu said that during the epidemic, China's actual utilization of foreign capital increased from US$2020.1444 billion in 2022 to US$1891.<> billion in <>, which is the best example of foreign investment full confidence in China. China will continue to expand market access and create a first-class business environment for enterprises from all over the world to invest in China. "We also expect foreign investors to establish a long-term vision, deepen the Chinese market, and invest in China to catch big fish in the long term." (End)