Wang Xiaosong is a professor at the School of Economics, Renmin University of Chinese, and a key member of the China Macroeconomic Forum (CMF).
The following views are compiled from Wang's speech at the 2023 World Economic Forum.
Number of words: 3010 words.
Reading time: 8 minutes.
1. The world's most differentiated development in 2023
In 2023, there will be a clear downward trend in the world**, but there is also a bright spot, that is, the performance of services** has achieved greater growth, which is different from the performance of goods**. At the same time, there is also a differentiation between the amount and the amount. There are a number of reasons for the decline in growth, one of which is the geopolitical drag, which is expected to continue for some time.
1. The growth rate of global goods has declined
In 2020, affected by the epidemic, the growth rate of world goods ** showed a significant decline, and then rebounded significantly from 2021 to 2022. However, until now, the overall development of cargo** is still not optimistic. According to the WTO, the growth rate of goods this year is 17%, real GDP growth rate of 24%, although it still maintained a positive growth, but it was lower than the average for more than a decade.
In terms of industries, in the third quarter of 2023, except for the automotive industry, which increased by 13% year-on-year, the year-on-year growth rate of all other industries was negative, and the quarter-on-quarter growth rate of most industries was also negative. Industries with a serious year-on-year decline in growth include traditional industries such as communication equipment (-17%), office equipment (-16%), textiles (-13%), and metals (-13%).
2. Goods in major economies declined
In terms of economies, the year-on-year and month-on-month growth rates of goods in major economies have declined, and even if they are positive, the magnitude is relatively small. For example, Russia's exports of goods** fell by 24% month-on-month, South Korea and South Africa fell by 11% month-on-month, and only Russia's imports increased by 10% month-on-month.
3. The services of major economies are growing hard
Judging from the data for the second quarter of 2023, the year-on-year and quarter-on-quarter growth rates of services** in major economies are positive, but the magnitude is not very large, and only a few economies have seen larger increases. For example, Russia's imports of services** increased by 12% year-on-year, while exports from Japan and South Korea grew by 5% and 6% year-on-year, respectively. Overall, services** in major economies struggled to grow.
4. The development of various regions is differentiated
In terms of sub-regions, East Asia, which was previously the most active, experienced a severe decline, with imports and exports both down 8% year-on-year, and intra-East Asia** also down 10% year-on-year. Excluding East Asia, developing economies** and South-South** still have zero or negative growth. North America** showed a certain degree of resilience, with positive growth in imports and exports month-on-month, a slight year-on-year decline in imports, and exports basically flatIn North America, ** achieved a positive growth of 1%, and the development situation is not bad.
5. The development of goods and services is differentiated
According to **, the year-on-year growth rate of services in the third quarter of 2023 is about 8%, and although the quarter-on-quarter growth rate has decreased slightly, it is mainly affected by the high base in the previous period, so the overall view is still relatively ideal. However, the growth rate of goods** has decreased significantly both year-on-year and month-on-month, and the year-on-year growth rate has decreased significantly, at -9%.
6. Differentiation of quantity and amount
Since 2022, the amount of ** has been declining year-on-year and month-on-month, while the amount of ** has increased slowly, and there has been a large differentiation between the two, mainly due to the continuous fluctuation of commodities. After the outbreak of the Russia-Ukraine conflict in 2022, commodities** rose rapidly, resulting in a significant increase in the value of commodities** in 2022. At present, the situation between Russia and Ukraine has eased, so commodities have fallen, resulting in an increase in volume while the amount has decreased significantly.
7. Geopolitics affects the world**
Using the United Nations voting data to examine the geopolitics of each country, countries can be divided into three main categories. Taking the first quarter of 2022 as the base period, by the third quarter of this year, the geopolitically distant countries** fell sharply by more than 5%;There was also a 4% decline among geopolitically distant countries**The geopolitically recent countries** have risen even faster, with growth of more than 6%.
Under the strategy of "friendly shore outsourcing" and "nearshore outsourcing" in countries represented by the United States, some multinational companies have shifted from East Asia to Mexico and other countries with good geopolitical relations with the United States, resulting in an overall increase in the concentration of countries among countries. Judging from the data, the development of nearshoring is not obvious, and it has also seen negative growth after a slight increase in 2022;However, the outsourcing of friendly shores is based on purely geopolitical relations, and the development has accelerated, and the ** between the United States, the European Union and their allies has increased significantly.
From the perspective of changes in bilateral dependence, Ukraine's dependence on the EU has increased by 10%, and Russia's dependence on China has increased by 8%.Russia's ** dependence on the EU fell by 64%, Taiwan Province of China's ** dependence on the mainland fell by 22%, and the U.S.'s dependence on China fell by 18%。Therefore, the impact of geopolitics on the international ** is very obvious.
2. The world will have a difficult recovery in 2024
At present, the world economy is still facing many uncertainties: the multilateral system represented by the WTO has been impacted;The geopolitical impact is expected to continue;Major economies are in a high interest rate environment after sustained interest rate hikes, which could be a drag on economic growth;Financial stability and debt risks remain.
The above figure shows the WTO's ** global goods ** index, where the solid line is the average value of **, and the dotted line is the ** value fluctuation range after considering geopolitics and economy. If the geopolitical situation deteriorates further, the growth rate of global goods** is likely to be very low, and if the geopolitical situation eases, the growth rate of goods** may be higher. Overall, geopolitics will be the main influencing factor for world economic growth next year.
The global economy has been recovering slowly
According to **, the growth rate of world output this year is about 24% and 2 next year6%, basically the same as this year. By economy, there is a similar trend, and some economies may even grow at a slower rate in 2024 than in 2023.
The outlook for the global world is cautiously optimistic
WTO**, the growth rate of world goods next year will be higher than this year, reaching 32%。However, the growth rate of goods** in some economies in 2024 will be lower than this year, and the recovery of major advanced economies and developing countries is not very optimistic.
3. The multilateral system has been impacted
On May 17, 2023, the EU's Carbon Border Adjustment Mechanism (CBAM) came into force, which means that carbon tariffs will be introduced. From 2023 to 2026, there will be a transition period for the collection of carbon tariffs, which will be officially collected from 2027, and the free allocation of allowances will be completely abolished in 2032, and carbon tariffs will be fully imposed. This will weaken the export advantage of developing countries and form a low-carbon barrier.
The United States has also continued its protective stance and released the "2023 National Export Strategy", proposing to intervene in the import and export of some industries through **. In addition to providing traditional loans, loan guarantees, and insurance to U.S. exporters, the U.S. Export-Import Bank is authorized to establish the China and Transition Export Program to help U.S. exporters compete with China in 10 export areas, including artificial intelligence, biotechnology, quantum computing, semiconductors, and renewable energy.
4. Major economies still maintain high interest rates
Currently, the US interest rate has reached 525%-5.5% and inflation rate of 31%, which is short of the Fed's inflation target of 2%. Such high interest rates will further slow the pace of its economic growth. Interest rates in the eurozone are also very high, but they are still negative in Japan, and relatively low in countries such as China and Switzerland. Overall, however, interest rates in major countries have remained at very high levels.
3. Inject new impetus into the world's leading development
1. Open up new areas of development
According to the WTO's "Cargo Barometer", among the component indexes, the automobile product index is 1108. Perform above the trend level. In the future, more attention should be paid to the development of the automobile industry, especially the new energy vehicle industry, so as to promote the further development and growth of the "new three" such as new energy vehicles, photovoltaics, and lithium batteries.
2. Pay attention to new first-class agreements such as RCEP
Since the implementation of RCEP in early 2022, member countries have become more closely connected, and the region has become a key force driving growth, and the region has continued to become a global investment hotspot, which has clearly benefited member countries. In the future, all walks of life in China should seize the opportunity of RCEP, and at the same time strive to join CPTPP and DEPA, so as to provide a broader space for their own development.
3. Promote digital development
Looking at data from recent years, exports of digital services have grown much faster than exports of goods and other services. If we take 2005 as the base period, by 2022, the growth of digital services has exceeded 360%, which has great potential. In the future, China will further strengthen cooperation with leading partners, accelerate the construction of data infrastructure, promote the interconnection of international data infrastructure, and actively meet the requirements of high-standard international economic and trade rules, such as DEPA, and constantly improve the rule system of digital **.
ExtensionStretchRead
Yan Yan: China's economic bottoming out and rebounding requires a more proactive fiscal policy.
Wang Wei: Promote stability with progress, consolidate the foundation for stable and positive consumption, and promote the continuous expansion of consumption.
Yuan Haixia: The sustainable development of local debt needs to deal with five relationships.
Wang Yiming: Consolidate and strengthen the positive trend of economic recovery.
Li Daokui: "We must adhere to high-quality development as the last word in the new era" is the most important spirit of the first economic work conference.
Radar: Actively explore new momentum and return to the development track of globalization.
Liu Yuanchun: The restructuring of the global industrial chain may show phased results, and we should pay attention to the impact of structural changes.
Huang Qunhui: Accelerate the formation of new quality productive forces and build a modern industrial system.
Liu Kai et al.: Five Mechanisms and Policy Implications of Macroeconomic Fluctuations Affecting Long-term Economic Growth.