Recently, I saw a message from an American friend on the Internet, who told me that he was very happy to see the steady growth of China's economy, which has played an important role in the recovery of the global economy.
I was surprised to hear it, because all along, in the eyes of Americans, the United States is the leader of the global economy, and China is just a follower.
When I asked him why he said that, he told me with a smile that the U.S. economy had entered a soft landing, and the rest of the world was cooperating with the U.S. to adjust to avoid a bigger crisis. What's going on?Turn the page in 2023
A soft landing is the process by which the rate of economic growth declines from high to low, but remains positive.
This process is usually achieved by ** or central banks by adjusting monetary or fiscal policy with the aim of easing inflationary pressures and preventing the economy from overheating or bursting bubbles.
Since 2018, the U.S. economy has gradually shown signs of slowing down. While this change is to some extent a natural consequence of cyclical economic development, it has also exposed some deep-seated structural problems, such as the imbalance in the labor market, the challenge of industrial upgrading, and the growing fiscal deficit.
In 2020, the outbreak of the new crown epidemic threw the global economy into chaos. The U.S. economy has not only not been spared, but has suffered a severe shock. In response to this unprecedented crisis, the United States** has adopted a series of aggressive economic stimulus measures.
These measures have effectively stabilized the market in the short term and restored some economic vitality, but they have also brought about long-term ***, the most significant of which is the sharp rise in inflation.
Inflation soared to 68%, the highest level in 40 years, forcing the Fed to act. To bring inflation under control and steer the economy toward a more sustainable growth path, the Fed began raising interest rates earlier and tapering its asset purchase program. The decision signals that the U.S. economy is moving toward a soft landing.
According to the Federal Reserve, the U.S. economy will grow at a rate of 5 in 2023 from 57% to 24% and expects a further decline to 18%。
This gradual slowdown is aimed at avoiding an overheating of the economy while maintaining sufficient growth momentum to sustain employment and business investment. However, the process of a soft landing is fraught with uncertainty.
First, the biggest challenge for the Fed is precisely controlling the strength and pace of monetary policy. If monetary policy tightens too quickly, it could lead to a sharp slowdown in economic growth and even the risk of a hard landing.
Conversely, if measures are too accommodative, they could exacerbate inflation and undermine the long-term health of the economy.
Second, the United States** needs to find a balance between spending and revenue in fiscal policy. An excessively large fiscal deficit would not only increase the country's debt burden, but could also affect the credit rating and standing of the United States in the international arena.
A sound fiscal strategy is essential to achieve a soft landing for the economy.
Third, the U.S. needs to deal with uncertainties at home and abroad, such as the mutation and spread of the epidemic, Sino-U.S. frictions, and the energy crisis, all of which may have an impact on the U.S. economy.
As the world's largest economy and consumer market, the U.S. economy has a huge impact on other countries.
When demand in the U.S. market decreases, global exporting countries are feeling the obvious pressure. In this case, many countries that rely on export-driven economies will find their surpluses shrinking and economic growth slowing.
For some Asian and European countries, which rely heavily on exports to the United States, any fluctuations in the U.S. economy could lead to significant changes in their gross domestic product.
Clause. 2. As the world's main reserve currency and medium of exchange, the US dollar plays a vital role in the stability of the world economy.
When the U.S. dollar strengthens, it causes the currencies of other countries to depreciate relative to each other. This change directly affects the cost of imports in these countries, thus increasing the risk of inflation.
For countries that rely on imports**, the appreciation of the dollar means that they need to pay more in their own currency to buy the same amount of oil, increasing domestic cost pressures.
This interdependence of the global economy requires countries to maintain a certain degree of coordination and cooperation with the United States. Whether through bilateral agreements or participation in multilateral economic organizations such as the World Organization (WTO) and the International Monetary Fund (IMF), countries are trying to find ways to keep pace with the dynamics of the U.S. economy.
This kind of cooperation is not only economic, but also involves exchanges in the political, security and even cultural spheres.
However, the United States' own economic policies, such as protectionism and monetary policy adjustments, often cause volatility in global markets.
Some of the most restrictive measures implemented by the United States in recent years have had a significant impact on the global ** chain. In addition, the Fed's interest rate decisions often affect global capital flows, affecting monetary policy and economic growth in other countries.
As the world's second largest economy and the largest partner country, China's economic trend and its global strategy have always been the focus of international attention.
In its economic, trade and financial ties with the United States, our country has demonstrated its indispensable position in the global economic architecture.
However, in recent years, China has also faced challenges such as slowing economic growth, rising inflation, and the accumulation of financial risks, which have attracted widespread attention around the world.
In response to these challenges, we have adopted a series of well-designed policy measures.
First of all, it is necessary to strengthen macroeconomic regulation and control, and to stabilize the economic foundation and stimulate economic growth by maintaining a combination of prudent and flexible monetary policy and implementing a proactive and promising fiscal policy.
This policy mix aims to balance the relationship between inflation and growth while providing appropriate liquidity support to the market.
China has been promoting supply-side structural reform, which focuses on optimizing the industrial structure, enhancing innovation capabilities and enhancing the potential of domestic demand.
Through these measures, the country aims not only to transform away from the traditional manufacturing and export-driven model, but also to cultivate new growth streams, such as high-tech and services, as well as to reduce dependence on external markets by increasing domestic consumption.
In the financial sector, we are committed to deepening the reform of the financial system. This includes improving the RMB exchange rate formation mechanism, increasing the openness of the capital market, and taking measures to prevent and resolve financial risks.
The aim of these measures is to enhance the stability and transparency of financial markets, thereby attracting more international investors and promoting the healthy development of financial markets.
In terms of international cooperation, China actively participates in the multilateral system, promotes regional economic integration, and plays an increasingly important role in global climate governance.
This spirit of international cooperation, particularly in economic coordination and coordination with the United States, plays a vital role in maintaining the global economy.
On January 4, the United Nations released the "World Economic Situation and Prospects 2024" report, and the global economic boom is gradually changing from high-speed growth to a more moderate and sustainable stage.
Global economic growth is expected to grow from 2.2 percent in 20237% to 2. in 20244%, a change that signals that the global economy is steadily moving towards a so-called "soft landing". However, this process is far from simple, and it comes with many uncertainties.
The ever-changing nature of the pandemic has had a profound impact on global ** chains, consumption patterns and labor markets. While many countries have begun to adapt to this "new normal", the future of the pandemic remains uncertain, which could pose a major challenge to the economic recovery process.
The persistence and spread of inflationary pressures is another serious issue. Many countries around the world are facing a sharp rise in food and energy, which is not only increasing the cost of living for consumers, but also putting pressure on the operating costs of businesses.
In addition, chain disruptions and tightness in the labor market have also pushed inflation up to some extent.
The volatility and tension in financial markets cannot be ignored either. In the context of global economic transformation, capital markets are more sensitive to various economic indicators and policy trends.
*, the volatility of the bond market and the currency market not only reflects the market's judgment on the current economic situation, but also reflects the expectations and uncertainties about the future.
Geopolitical conflicts and tensions add another layer of complexity to the global economy. From disputes to military conflicts, these issues not only affect specific countries or regions, but also have global repercussions, thus affecting international, investment and economic growth.
Faced with these challenges, countries** and central banks need a coordinated policy response. This means finding a balance between stimulating economic growth and controlling inflation, while also taking into account financial stability and avoiding excessive market volatility.
Monetary policy adjustments need to be cautious to avoid triggering an overreaction in the market. At the same time, fiscal policy needs to be more flexible and targeted to support economic recovery, especially in those sectors and groups most affected by the pandemic.
In addition, it is essential to strengthen international cooperation. Under the framework of multilateral institutions such as the IMF, the World Bank and the World Organization, the international community needs to work together to coordinate policies to address global challenges.
This includes working together to respond to the pandemic, mitigating chain disruptions, coordinating macroeconomic policies, and responding to possible financial market tensions.
Finally, in order to ensure the stable development of the global economy, attention needs to be paid to persistent and structural issues such as climate change, inequality, and technological change. The solution of these long-term problems will lay the foundation for sustainable growth of the global economy.