What impact will the fierce interest rate hike in the United States and Europe have on the global economy? Is the global economy heading for recession? What impact does the current global change have on China's economic development prospects? Where are the opportunities in China? ?
In an exclusive interview with the Governor of Chang 'an Avenue, business counselor He Weiwen, former economic director of the Consulate General of China in San Francisco and new york, said that the global changes have undoubtedly increased the external risks of China, but we should also see the limitations of this influence and not ignore the favorable factors in the situation.
The United States "releases too much water" will cause endless trouble.
President: The decline rate of CPI in the United States in August was obviously less than the market expectation, and the market was also worried that the Federal Reserve would continue to raise interest rates substantially in September. At the same time, the European Central Bank has also seen the momentum of raising interest rates sharply. How do you interpret it?
He Weiwen: Inflation is generally attributed to rising energy prices, but the disease in the United States is not here. Excluding energy and food, its core inflation rate is still as high as 6.3%. Therefore, the inflation data in the United States remained high in August because the Federal Reserve "released water" many times in the past, and then it was difficult to change.
As a representative of "hawks", Federal Reserve Chairman Powell has a firm attitude, that is, he will reduce inflation at all costs. Therefore, it is very likely to raise interest rates by 75 basis points in September. If the core inflation rate falls below 4.3% in the fourth quarter, it will definitely continue to raise interest rates.
Raising interest rates has two major impacts on the United States, economic recession and stagflation. The specific situation depends on the strength of the Fed's interest rate hike.
The United States redefined recession at 200 1. If consumption, income, employment and production fall sharply for several months in a row, it is a recession. At present, the employment data in the United States is acceptable, but consumption and industrial production tend to zero growth. The investment data released in the third quarter of 5438+ 10 will be the key to judge whether there is a recession in the United States.
There is a great possibility of a recession in the United States at present.
Federal Reserve Chairman Jerome Powell
In Europe, inflation is more serious than in America. Inflation in the euro zone hit a new high of 9. 1% in August, in which energy prices rose by 38.3% year-on-year, which was the main reason for pushing up inflation in that month, and energy prices caused a serious blow to the European economy.
Due to the lack of economic motivation, Europe has long implemented a zero interest rate policy. However, due to the continuous interest rate hike by the Federal Reserve, the spread has been widened, and the exchange rate of the euro against the US dollar has once again fallen below 1 to 1, and the zero interest rate policy may be unsustainable. So the European Central Bank has now become a hawk, raising interest rates by 50 basis points in July and 75 basis points in September, and will continue to raise interest rates.
As a net energy importer, Europe relies on Russia for 40% of its natural gas imports. Europe, which is on the front line of geopolitical conflict between Russia and Ukraine, is trapped by sanctions against Russia. The United States, watching the fire from the other side of the bank, is not only short of energy, but also sells energy to Europe to make money from it.
History is repeating itself?
President: Recently, the Center for International Outlook and Information Research, a French think tank, said that in the 1970s, against the background of the conflict between Russia and Ukraine, in order to curb the oil crisis and inflation, central banks of various countries raised interest rates substantially, which eventually led to the global economic recession. Is the global economy heading for recession? ?
He Weiwen: The historical experience of the 1970s is worth learning, but the situation has changed a lot.
* * * The same thing is that there have been soaring energy prices and energy embargoes, which have triggered inflation and interest rate hikes in various countries. In the 1970s, in order to punish Israel for attacking Arab countries, the Organization of Petroleum Exporting Countries sharply raised oil prices and imposed an oil embargo. Nowadays, in the context of the conflict between Russia and Ukraine, energy prices have risen sharply again, and Europe has greatly reduced its crude oil imports from Russia.
But there are also some differences:
First, the degree is different. The price of crude oil quadrupled that year, which is even higher than the current energy price.
Second, the embargo is different. At present, only the United States and the West impose sanctions on Russian crude oil and natural gas, but not all of them are embargoed.
Third, the scope is different. It was the United States and Japan that were hit hard, but Europe was actually less affected. But this time the situation is completely opposite. Europe is the hardest hit.
Fourth, the monetary strength is different. 197 1, after Nixon announced that the US dollar was decoupled from gold, the US dollar experienced two consecutive devaluations and the US dollar was weak. This time, after the Federal Reserve and the European Central Bank raised interest rates sharply, the dollar was very strong and even "outshined", overwhelming the euro, pound and yen.
Fifth, the scope of influence is different. In the1970s, developed countries were mainly affected, but this time it was low-income developing countries and least developed countries.
The premise of global recession is that the global economy has negative growth, or that most countries and major countries in the world have negative growth at the same time, so it is impossible to judge that the global economy is heading for recession at present, but the risk of recession undoubtedly exists and has increased.
In response to the energy crisis, France restarted some thermal power plants.
The key is to do China's own thing.
Governor: What impact does the current global changes have on China's economic development prospects? Where are the opportunities in China?
He Weiwen: Global changes have undoubtedly increased China's external risks. Maintaining stable economic growth and realizing the great rejuvenation of the Chinese nation all need an external growth environment. But now the external growth is decreasing, the demand is decreasing, and the external supply chain and financial risks are rising, which will definitely have an impact on China's economic development.
But we should also see the limitations of this influence. The serious inflation problem that plagues the United States, western countries and many developing countries has not appeared in China, which proves that China's economic structure is sound. Moreover, China's domestic market is huge. Although there is downward pressure on the economy, its fundamentals are stable enough to support China's economy to maintain a good state under external shocks.
Of course, we can't ignore the favorable factors in the situation. First of all, since the conflict between China and Ukraine, the demand for Russian products has increased in foreign markets, especially in European markets. According to the statistics of China General Administration of Customs, from/kloc-0 to August this year, China's exports to the EU increased by 1 9.2% year-on-year, which was higher than the average growth rate of global exports. Not only the European Union, but also China's exports to other regions show the same trend.
On June 5438+02, the Qianwan Container Terminal of Qingdao Port was full of boats and ships, and the ships docked frequently and efficiently.
Second, the cost advantage of China products has increased. Not all energy is sold at a uniform price in the international market, and the cost of importing oil and natural gas from China is relatively low.
In the second quarter, the average import price of crude oil in China was 107 USD/barrel, which was 5.6% more expensive in Europe than in China. China's natural gas import is 33% cheaper than German. The cost per ton of electrolytic aluminum in China is $565,438+$065,438+$088 lower than that in Europe, and that of steel is $65,438+$088 lower than that in Europe. China's cost advantage is more prominent, which is beneficial to China's industrial competitiveness, export and domestic industrial integration.
Third, it is conducive to attracting foreign investment. Many developed countries are facing rising costs and economic difficulties, and their capital needs to find a way out. In contrast, China's economic growth is stable, there is no inflation problem, its fundamentals are good and its cost is advantageous, so more foreign capital flows into China.
According to the data of the Ministry of Commerce, from June 5438+0 to July this year, the actually used foreign capital in China increased by 2 1.5%. Most of the above-average foreign capital came from developed countries, including 36.3% from the United States, 26.9% from Japan and 23.5% from Germany, all of which were higher than the average growth rate of foreign capital in the world.
Fourth, there is an opportunity to break the containment and "decoupling" of the United States. Due to the economic difficulties in many western countries, the main task of enterprises now is to survive. Therefore, a few politicians in Biden's administration have been trying to promote "decoupling", contain China and "cut" China out of the industrial chain, which has brought us new opportunities to break the US blockade of China.
In the final analysis, the key is to do China's own thing well. On the one hand, we should strive to do a good job in the fundamentals and steady growth of China's economy; On the other hand, we should persist in reform and opening up, unswervingly adhere to opening up, and take this opportunity to actively attract capital from all over the world to China.
China's open door will never be closed, on the contrary, it will open wider and wider. In this complex world facing recession and downside risks, we should turn crisis into opportunity and win a better future for China.