We are in an era of declining levels of globalization and economic growth rates, which is a long-term trend, not a short-term fluctuation. The starting point of this trend can be traced back more than a decade to 2007, the year of the US financial crisis. Since then, the world economy has entered a new phase, one fraught with challenges and crises.
During this period, we have experienced three world-class bailouts, namely the China-US joint bailout in 2008, the China bailout in 2015, and the US bailout in 2020. These three bailouts were all aimed at coping with the reversal of globalization and the decline in economic growth, to avoid greater collapse and chaos, and to gain more time and space for structural adjustment and reform.
However, none of these three bailouts has been able to fundamentally solve a problem, that is, the consumption of Western countries, where does the money come fromThis is the core issue of economic globalization, and it is also a problem that has occurred in history. If this problem cannot be properly resolved, the direction of the world economy in the next two or three years will be full of more uncertainties and risks.
We have to go back to 2001, the year we joined the WTO, and it was also from that year that our economic growth and the level of globalization in the world accelerated. This is a situation of strong alliances, we use our own accumulation and advantages, open the door to the world consumer market, and multinational enterprises, but also find a broadest industry and market space.
It's like a magical chemical reaction, and the whole world starts to spin at an accelerated pace. However, there are also some potential crises in this mode of operation, that is, the essence of this model is that the East produces and the West consumes. This begs the question, how can Western countries achieve a **balance?
Theoretically, Western countries can partially solve this problem through the division of labor in the industrial chain, that is, to keep the upstream of the industrial chain with high profits in their own country, and transfer the downstream of the industrial chain with low profits to our side, so that Western countries can take most of the profits to subsidize their own consumption.
However, the development of reality always exceeds expectations. In order to maximize profits, multinational companies are constantly moving their industries to lower-cost regions, so that the distribution of profits becomes less. This leads to the problem of the consumption of Western countries, where does the money come from?
This is an essential problem, and even now, it has not been solved, and has even become more complicated, which may become the largest contradiction in the world.
At a time when this issue had not yet erupted, the U.S. economy was also booming with our accession to the WTO, and it seemed like a win-win situation. However, this situation quickly became unsustainable, because one thing happened that made the problem mentioned above become a reality, that is, the money should come from.
This incident is the financial crisis of 2008. We can look at the changes in our country's GDP growth over the past two decades.
Since its entry into the WTO in 2002, GDP growth has been on the rise, and finally in 2007, it reached a potentially permanent high.142%。This is consistent with the growth of global goods** and reflects the main driving force of world economic growth.
However, this upward trend was interrupted by the 2008 financial crisis in the United States. Since the crisis, the trend of global GDP growth has reversed, and since 2007, our growth rate has begun a process of continuous slight decline. This process, before the current epidemic and the US interest rate hike, has formed a definite trend.
At the macro level, in our country, this is called a new stage of development, that is, from a high-speed growth stage to a medium-high growth stage, in fact, the GDP growth rate, from a growth rate of more than 10%, gradually falling back to between 6-8%.
Behind this high-speed to medium-high speed transformation, in addition to the long-term trend of declining economic growth, there is another trend, that is, the level of economic globalization has reached a stage peak, and then de-globalization has begun. It's just that the inertia of globalization is still there, and the peak time is a few years later than the peak of our economic growth rate, probably in 2016, and it can be regarded as officially reaching the peak.
What is the sign that globalization has reached its peak?
On the economic front, it should be said that the formal signing of the TPP agreement by the United States in 2016 was the official beginning of anti-globalization. Because this is an economic agreement that wants to exclude us from the industrial chain and the first chain. As the cornerstone of the global industrial chain and the first chain, we are excluded, and there is no doubt that this is the most direct anti-globalization action.
The global economic growth rate and the level of economic globalization, these two trends have reached their peak, it should be said that they are interrelated, they have appeared one after another, and there is an internal logical relationship, as we said at the beginning, this was originally a chemical reaction, one reversed, and the other also reversed.
The core problem behind this is actually the question about consumption, where should money come from?