Looking forward to the general trend of 2022 ④ 2022： opportunities and challenges in the process of global economic recovery
Promoting global economic recovery is not only a "stopgap measure", but also a long-term plan to reshape the global development pattern, and take digital and green transformation as an opportunity to promote global economic transformation and pay more attention to international cooperation to solve the long-term challenges that plague global economic recovery. International cooperation and policy coordination are very important in the post-epidemic era.
■ Deng Yu
After more than two years of continuous shocks and repeated disturbances caused by the COVID-19 epidemic, the global economy is gradually moving from a short recession cycle to a steady recovery trend, and the economic growth, output and investment of most major economies in the world have generally been restored to the pre-epidemic level. In 2022, the world may gradually enter the "post-epidemic era". In addition to continuing to promote the complete recovery of the economy, countries around the world must also deal with greater realistic challenges such as rising global debt, high inflation, loose monetary policy adjustment and industrial chain reconstruction in big countries. At the same time, in the process of accelerating digitalization and green transformation, the global economic recovery has also given birth to some new development opportunities. Deepening international cooperation and promoting the reform of the international governance system are still the main topics.
First, the global economic recovery situation and existing uncertainties
Judging from the current trend, the global economic recovery is in a relatively stable recovery pattern, and major economies have temporarily got rid of the risk of economic recession by relying on unprecedented stimulus policies. However, there are also some hidden concerns behind the positive trend, and how to ensure a stable and sustainable recovery is still an important problem facing all countries. Overall, the global economic recovery is mainly reflected in three characteristics.
First, the world’s major economies have basically recovered to the pre-epidemic level, but the foundation for economic recovery is not solid.After the major economies in the world experienced a phased recession in 2020, developed economies, such as the euro zone and the United States, gradually achieved stable economic recovery, and the output level has generally recovered to the pre-epidemic level, while the recovery momentum of the global economy in the future will weaken with the withdrawal of stimulus policies and the adjustment of easing policies. The economy of major economies may continue to slow down, which will change the expectation of global economic recovery.
Second, the international trade recovery situation has exceeded expectations, but the future global trade growth is still full of twists and turns.Although international trade has encountered challenges such as "suspension" and "interruption" caused by the initial epidemic isolation, under the guidance of major trading countries such as China, international trade has recovered relatively well. In the future, the growth of international trade is still affected by negative factors such as global economic slowdown, trade protectionism, supply shortage and geopolitical conflicts, and the growth rate of global trade may gradually slow down.
Third, the recovery of manufacturing and consumption has maintained a good momentum, but the recovery of some industries is still slow.In 2021, the repair of manufacturing and consumption in major economies in the world is better than that in 2020, and it is gradually getting rid of the impact of the epidemic. However, due to the rising commodity prices, rising wages and the rising cost pressure brought by epidemic prevention policies, the profits of some middle and lower reaches of manufacturing enterprises have been cut, and there may be more prominent financial pressure in the future. However, the industries such as international air shipping, international travel and entertainment consumption are still greatly affected by the fluctuation of the epidemic, and have not yet fully emerged from the shadow of the epidemic, and the restoration process of these industries may be delayed in the future.
The "post-epidemic era" is expected to approach. Judging from the current trend of global epidemic development and global economic recovery, global economic recovery still faces some uncertain factors, which will bring new challenges to the stable and sustainable recovery of the global economy. Mainly reflected in three levels.
First, the global epidemic situation is still grim, and differences in epidemic prevention policies will put pressure on border opening.The global epidemic situation is still fluctuating repeatedly, and new mutant strains such as Delta virus and Omicron spread quickly and have a wide radiation range, which makes epidemic prevention and epidemic control more difficult. In addition, the epidemic prevention policies of different countries and regions are quite different, which may lead to new imported case transmission pressure, and the "group immunization" policy adopted by developed economies still has loopholes and instability. The epidemic situation is still the main factor that plagues the global economic recovery. To overcome the epidemic situation and truly enter the "post-epidemic era", it is necessary to strengthen epidemic prevention and control and global epidemic prevention cooperation, and accelerate the promotion of vaccination, research and development of a new generation of vaccines and research and development of specific drugs in COVID-19. The primary prerequisite for promoting global economic recovery is still to effectively respond to changes in the epidemic situation and end the global epidemic situation as soon as possible.
Second, the global debt rise and inflation trend are still unclear, which will bring uncertainty to the global economic recovery.After the impact of the epidemic for more than two years, many economies have adopted large-scale fiscal stimulus policies to save the economic recession, and the financial expenditure to promote economic recovery and public health care expenditure to deal with the epidemic have raised the global debt level. The soaring global debt level will bring about two problems, including that the budget needed to promote economic recovery and epidemic prevention in the future will be limited, the lack of financial resources will not be conducive to sustained economic recovery, and the excessive fiscal deficit will weaken the efficiency of government public departments.
Third, the intensification of global economic recovery and the expansion of the rich and the poor may lead to geopolitical risks.The continuous spread and spread of the global epidemic has not only caused the recovery and differentiation of developed economies and emerging economies, but also made the economic growth gap and uneven development between them more prominent. Moreover, due to the widening gap in coping with the epidemic and wealth income growth within the group, the widening trend of the gap between the rich and the poor and the inequality in the global scope have intensified. Low-income countries and unemployed people who have suffered greatly from the epidemic may have social problems due to uneven economic recovery. Potential local geopolitical risks will lead to instability in the international situation, which will bring new challenges to the resumption of globalization, including the rise of anti-globalization and trade protectionism. In the medium term, it will weaken the enthusiasm of sustainable global economic recovery.
Image source/Xinhua News Agency
Second, the global economy has accelerated its transformation and nurtured new development opportunities.
To some extent, the sustained impact of the epidemic has exposed the potential shortcomings of economic growth in many economies, facing new problems such as sound public health and medical security, insufficient infrastructure construction, lagging digital application and less than expected green transformation. The industries and sectors involved in these fields will have greater development potential. In fact, many countries are also accelerating to fill the shortcomings.
First, digital transformation will bring new opportunities for global economic recovery and transformation and development.The continuous spread of the COVID-19 epidemic has spawned the widespread rise of new formats and models such as global digital economy, digital trade and cross-border e-commerce, and the digital capability has also become a competitive advantage for some economies to cope with the economic recession. The large-scale application of digitalization has led to revolutionary changes in traditional manufacturing, consumption and the Internet. Developed economies, including the European Union, the United States, Japan and South Korea, all regard digital transformation and new infrastructure construction as long-term policies to promote global economic recovery, and industries related to digitalization have also developed rapidly during the epidemic. China laid out the development of digital economy earlier, and put forward medium-and long-term planning and large-scale investment around digital economy, industrial internet and new energy. In the future, emerging industries related to digital economy will gain greater growth opportunities driven by policies and lead the transformation of economic growth mode.
Second, coping with global climate change and accelerating green transformation will promote the development of new energy industry.Major economies in the world, including China, have put forward the timetable of carbon neutrality in peak carbon dioxide emissions, and are making long-term policy preparations for this through economic transformation and energy reform. The new energy investment plans and industrial policies that have been launched one after another will provide new momentum for the sustainable recovery of the global economy. In the process of traditional energy and industrial transformation, new technology applications will penetrate into more green and low-carbon industries, and new energy industries and enterprises with core competitiveness will usher in new growth opportunities. R&D enterprises of new energy vehicles, bioenergy and related supporting raw materials will accelerate technology research and development, and expand the investment and development of corresponding industrial chains, thus leading the widespread rise of the fourth scientific and technological revolution.
Third, the acceleration of global industrial chain reconstruction will promote the adjustment of global investment and financing layout of multinational enterprises.The trend of accelerating the reconstruction of global industrial chain will have a great impact on the investment and financing layout of global multinational enterprises in the future. Multinational enterprises will rebuild their own industrial chain investment, expand investment in areas that are in line with local policies and can enhance the core competition of the industrial chain, and rely on the changes in global industrial division of labor and the adjustment of industrial policies in various countries to achieve cost reduction and efficiency improvement, and form competitive advantages in ESG and green investment.
Third, how to deal with the risk challenges of future global economic recovery
Facing the severe global epidemic situation and the derivative risk challenges brought by the future policy adjustment of global powers, it is suggested to start from three aspects.
First, countries should still work together to deepen global epidemic prevention cooperation and accelerate the restart of globalization.Effective response to the spread and spread of the global epidemic still depends on the joint efforts of all countries in the world to fight the epidemic. In addition to the efforts of countries to strengthen the prevention and control of the global epidemic situation, promoting the opening of borders and the resumption of globalization in the future will inevitably require countries to properly solve the export risks of the epidemic. At the same time, major countries in the world should shoulder international responsibilities and obligations, increase vaccine donations to low-income countries, and provide international medical assistance to help these countries improve vaccination rates as soon as possible, laying the foundation for promoting the resumption of globalization.
Second, we must strengthen the coordination and communication of international economic and financial policies.
The major economies in the world must strengthen the coordination and communication of international economic and financial policies, and steadily push forward adjustment policies in a responsible attitude towards their own countries and the global economy. In addition to comprehensively and accurately evaluating the potential risks that may be caused by the policy adjustment of big countries, we should carefully communicate information between policies and markets, and the financial sector and financial markets should do stress tests. In particular, emerging economies should adopt more active policies to deal with the risk of economic "hard landing".
The third is to fill the global governance deficit and promote the reform of the global governance system.In the future, to achieve a stable and sustainable recovery of the global economy and strengthen international cooperation, we should start to fill the global governance deficit. We should not only promote the innovation and reform of existing international organizations and international cooperation mechanisms, but also clarify the rights and obligations of developed and emerging economies, give full play to the positive role of developed economies, respect and expand the voice of emerging economies, accelerate the reform of the global governance system, persist in promoting multilateralism and global cooperation for mutual benefit and win-win, and provide international governance support for coping with global climate change, energy transformation and global public health crisis.
IV. Conclusion and prospect
The global economy has fully exposed the problems of globalization and regional globalization, industrial chain stability and security, inflation and the spillover effect of loose monetary policy that have been neglected intentionally or unintentionally in the past. This round of economic recession caused by the epidemic has forced the world to reflect on the past long-term problems such as economic growth model, fiscal and monetary policies and the gap between the rich and the poor. This also means that promoting global economic recovery is not only an "expedient measure", but also a long-term plan to reshape the global development pattern, and take the opportunity of digitalization and green transformation to promote global economic transformation and pay more attention to international cooperation to solve the long-term challenges that plague global economic recovery. In the post-epidemic era, international cooperation and policy coordination are very important. Without international cooperation, it is difficult to restart globalization in the future, and it is also difficult for the global economy to maintain the goal of sustainable growth.
(The author is a senior researcher at the Financial Research Center of Bank of Communications)
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