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Change and Response: Global Economic and Financial Trends and China's Future
Zhu Min and Zhang Liqing.
Published by CITIC Publishing Group.
Introduction
In the face of the great changes in a century, Zhu Min, former deputy managing director of the IMF and dean of the National Institute of Financial Research of Tsinghua University, and more than 10 experts and scholars of the Global Economic Governance 50 Forum based on the macro perspective of global economic governance, ** China's economic and financial opportunities, challenges and responses, and in-depth analysis of the new trends in the evolution of the global economic and financial pattern. The book is divided into three chapters, the first of which focuses on macro trends, changes and evolution of the global economy, finance, currency, and the world in the midst of a century of great changes. It mainly introduces the global economy moving towards "stagflation", the fragmented international financial structure, the turbulent international monetary system, and the development trend of the global energy pattern. The second part focuses on China's opportunities, challenges and responses under the great changes, focusing on the analysis of China's response to various challenges such as the Russia-Ukraine conflict, the reform of the international order, and the financial hegemony of the United States. The third article looks forward to the future of global economic governance cooperation, discusses the current situation and prospects of frontier issues such as digital economy and green finance, and puts forward a series of suggestions on China's plans and international cooperation mechanisms.
This book not only provides an in-depth analysis of the global economic and financial pattern and its development trend under the changes of a century based on a large number of detailed data, but also gives solutions and Chinese solutions, which will help readers form a global vision and macro pattern, grasp the changes and trends of economy and finance from a higher position, and see the future development direction with systematic thinking.
About the Author
Zhu Min
Vice Chairman of the China Center for International Economic Exchanges, initiator of the Global Economic Governance 50 Forum, Minister of Financial and Professional Services for the Belt and Road Initiative of the China-UK Dialogue Mechanism, member of the Expert Committee of the 14th Five-Year Plan, member of the Foreign Policy Advisory Committee, and member of the Expert Advisory Committee of the Cyberspace Administration of China. He is a Managing Director of the Board of Directors of the World Economic Forum, a member of the Board of Directors of the Peterson Institute for International Economics, a member of the G20 High-Level Committee on Global Public Service Financing, and a member of the United Nations High-Level Advisory Board on Economy and Development. He has served as Vice President of the International Monetary Organization, Deputy Governor of the People's Bank of China and Deputy Governor of the Bank of China, worked at the World Bank, and lectured on economics at Johns Hopkins University and Fudan University.
Zhang Liqing
*Professor of the School of Finance, Director of the Center for International Finance, and Deputy Director of the Academic Committee of the Global Economic Governance 50 Forum. Enjoy the special allowance and be selected into the "New Century Millions of Talents Project (National Level)". He is also the Vice President of the China World Economic Association, the Executive Director and Academic Committee Member of the China Society for Finance and Banking, the Chairman of the Hongru Financial Education Association, and the Chief Economist of PricewaterhouseCoopers China. He has served as the dean of the School of Finance and Economics of ** University of Finance and Economics, and has been a visiting scholar at Harvard University, the Peterson Institute for International Economics, and the World Bank.
Table of Contents
Chapter 1 The Changing Global Economy and Finance
Chapter 1 The Great Changes of a Century: The Changing Global Economy and Finance.
Chapter 2 The Fragmentation and Evolution of the International Financial Landscape (Chen Weidong).
Chapter 3 New Turbulence in the International Monetary System: Is It Bretton Woods Now? (Joyd).
Chapter 4 Trends and Prospects of Global Development Pattern and Governance Reform (Tu Xinquan).
Chapter 5 Analysis of the Two-way Tightening of the Review of Cross-border Investment in the United States and Europe and Its Impact: From "**" to "De-risking" (Zhu Jun).
Chapter 6 The Ukraine Crisis Accelerates Profound Adjustment of the Global Energy Landscape (*
Chapter 2: China's Opportunities, Challenges and Responses under the Great Changes
Chapter 7 China's Opening Up to the Outside World in the Russia-Ukraine Conflict: Opportunities, Challenges and Strategic Choices (Zhang Yansheng)
Chapter 8 In the face of new opportunities, how can the internationalization of the renminbi be stable and far-reaching? Zhang Liqing
Chapter 9 Stabilizing the Scale, Optimizing the Structure, and Consolidating the Advantages of China's Export-oriented Economic Development (Huo Jianguo).
Chapter 10 Changes in the International Order and China's Response (Single).
Chapter 11 The Security of National Foreign Exchange Reserve Assets from the Perspective of Sanctions against Russia (Guan Tao).
Chapter 12 Dealing with the New Asymmetric Financial Hegemony of the United States (Chen Chao).
Chapter 3 The Future of Cooperation in Global Economic Governance
Chapter 13 Development of the Digital Economy and Cooperation in Global Governance (Zhang Ming).
Chapter 14 The Data Element Market Becomes a New Highland of Global Competition (Zhang Xiaoyan).
Chapter 15 International Cooperation Mechanism for Green Finance (Wang Yao).
Chapter 16 Bridging the Global Development Deficit in the Context of Multiple Crises (Zhao Changwen).
Chapter 17 The Russia-Ukraine Conflict and the Independence of the European Union (Tong Jiadong).
Highlights
Zhu Min: The world is just one step away from "great inflation".
From "three lows and one high" to "three highs and one low".
Since the 2008 financial crisis, the world has been in a stable state of "three lows and one high", that is, low growth, low inflation, low interest rates, and high debt. Enterprises' investment in expanding production capacity and increasing employment are sluggish, residents' willingness to consume is decreasing, and aggregate supply and aggregate demand are in a state of "low equilibrium".
After the epidemic, the rise in aggregate demand driven by strong stimulus policies has broken this equilibrium, and changes in household consumption behavior have caused the supply of goods to exceed demand, leading to high inflation in food, commodities and other fields. The pressure on the global chain has reached the highest level in nearly 25 years, the "bottleneck" is highlighted, the factors of production are therefore substantial, and the "scissors gap" between PPI and CPI in major countries is widening, exacerbating structural inflation and increasing the pressure on inflation to the downstream.
At the same time, the Ukraine crisis continues to increase global short-term and long-term inflationary pressures, pushing the high inflation driven by global monetary and fiscal stimulus policies after the epidemic to persistent high inflation.
In the short term, the Ukraine crisis will mainly drive global inflation through channels such as increasing pressure on energy and commodities and intensifying chain disruptions. In the medium to long term, the Ukraine crisis will accelerate the established trend of "de-globalization" and carbon neutrality, and together with the aging of the population, it will become the main force driving global long-term inflation.
The era of low inflation since the outbreak of the global financial crisis in 2008 may be gone forever, and the world has entered a new situation of "three highs and one low" of high inflation, high debt, high interest rates and low growth.
At this stage, the central banks of various economies represented by the Federal Reserve are more inclined to the former in the dilemma of "maintaining growth" and "controlling inflation". Combined with factors such as the long-term decline in labor productivity, the aging of the population, the ** chain disturbance caused by geopolitics, and the energy crisis, the Ukraine crisis has "fueled the fire" and accelerated the world economy into "stagflation".
Overall, the global economy is heading for "stagflation". "Stagflation" will cause profound changes in the world economic pattern. From the perspective of "stagnation", the superposition of long-term and short-term factors affecting economic growth has caused the global economy to enter a low-track growth. From the perspective of "inflation", today's global economic situation is very similar to the "great inflation" in the 70s of the 20th century, the inflation of both eras stems from large-scale fiscal policy and quantitative easing monetary policy, and the current round of inflation is developing more rapidly, the external environment is more complex, and it is only one step away from getting out of control.
The central banks of various economies, represented by the Federal Reserve, will face a dilemma of solving the problem of "stagnation" or "inflation", and policy uncertainty may bring greater volatility to the world economy and finance. At the same time, the Fed's interest rate hikes and high debt also increase the probability of a debt crisis or financial crisis.
Geopoliticization exacerbates economic uncertainty
Now there are many new concepts in the world, new globalization, new Washington Consensus, new industrial policy, new capitalism, new regionalism, new supply economics and so on. All "new" is, in the final analysis, a word, geopoliticization.
In recent years, the United States has implemented strategies such as the return of the U.S. manufacturing industry, friendly shore outsourcing and nearshore outsourcing, which has broken the world industrial division of labor model formed in the era of economic globalization and has had a significant negative impact on international investment and the international pattern. These changes not only increase the uncertainty and risks of the global economy, but also reduce the efficiency of the division of labor, thereby weakening the potential for world economic growth in the medium and long term.
The conflict between Russia and Ukraine has further exacerbated the uncertainty of world economic growth, and geopolitical and security factors have increasingly become important constraints on the economic development and international cooperation of all countries. In response, major emerging market economies have strengthened their cooperation, and the BRICS countries have successfully expanded and are expected to continue to expand. The trend of fragmentation and blocization of the global economy may be taking shape.
In such a new international environment, China should also create a more open, more market-oriented, and more law-based environment, and the most important thing is to do its own thing well. To do our own thing well is to continue to comprehensively deepen reform and opening up and the building of the rule of law, and to promote science, the rule of law, and the internationalization of the economy, which may be a choice for China in such an international environment.
The data element market is becoming a new highland for international cooperation and competition
In the past year, AI technology has achieved breakthroughs in the form of large models.
Despite the growing risks in finance and the huge uncertainties in politics, technology, GPT, and large models bring great hope for the future, and in addition to the revolutionary impact of artificial intelligence technology, the systemic changes that have taken place in digital technology are reshaping the world economic pattern. Artificial intelligence (AI), block chain (blockchain), cloud computing (Cloud), big data (Big Data), and edge computing (Edge Computing) constitute the main content of the current "ABCDE" digital technology.
The rapid development and wide application of digital technology have promoted the rise of the digital economy, a new economic form in many fields such as product consumption, manufacturing, urban governance, medical and health care, education and research and development. Data has become the fifth type of production factor alongside land, technology, capital, and labor, and plays an increasingly important role in economic production activities.
As a new economic form based on breakthroughs in digital technology, the digital economy has strong innovation capabilities and the potential to promote economic growth. Data elements are the core production factors that give birth to the digital economy, and the data element market provides a platform for the trading and sharing of data elements, so that data can flow and circulate. This means that the construction of a data element market will not only help promote the release of the value of data elements, but also allow data to be more widely used and utilized between different organizations and fields to maximize the value of data.
From the perspective of its own development, the data element market will help promote the innovation ability and competitiveness of domestic enterprises and release economic vitality. The development of the digital economy has brought innovation opportunities and competitive advantages to local enterprises. A high-quality data element market can give enterprises a convenient opportunity to embrace the dividends of the digital age, and promote enterprises to innovate in products, services, production processes, marketing, etc., so as to enhance their competitiveness.
This article is compiled from the on-site sharing of the new book "Changes and Responses: Global Economic and Financial Trends and China's Future" published by CITIC Publishing House and part of the content of the book, with the authorization of the publisher**.
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