Crisis prompts changes in the global economic landscape (Part 1)

——Interview with Professor Shi Shiwei of the w88 casino

("w88 mobile Economic Times"2011Year2month10日）

Shi Shiwei

Ph.D. in Economics from Germany, professor at the w88 casino of Foreign Languages, w88 casino, part-time professor at the w88 casino of International Relations, director of the European Studies Center of the Regional Institute for National Studies, and director of the German Studies Branch of the China European Society.

■Post-crisis era (３４)■Our reporter Xu Wei Intern Huang Xiaomeng

The outbreak of the financial crisis has had a significant impact on the world economic structure. The economies of the world's major powers have suffered a major blow, and at the same time, some emerging economies have begun to emerge. In the post-crisis era, what changes will occur to the world economic landscape? How will China's economic status change? With these questions, a reporter from China Economic Times interviewed Shi Shiwei, a professor at the w88 casino.

Global economic imbalance is the root cause of the financial crisis

w88 mobile Economic Times: What do you think is the root cause of the financial crisis?

Shi Shiwei:Among the many factors that led to the outbreak of the financial crisis, a very important reason is the imbalance of the current global economic structure. Generally speaking, the manufacturing industry in the United States and most European countries is in decline. In order to maintain a certain growth rate, they have to adopt methods such as state debt, bank leverage, and bank financial innovation. But blindly using these methods to maintain economic growth, consumption and employment will definitely cause problems. By 2008, due to the subprime mortgage crisis and the bursting of the real estate bubble, these problems accumulated together and a financial crisis broke out.

Now the U.S. economy has begun to recover, but the fundamental problem has not yet been solved. From the perspective of the overall economic fundamentals, the savings rate is too low, consumption is excessive, and there is a feeling that one cannot live without food; from the perspective of the country, expenditure is much higher than income; from the perspective of residents, consumption and investment are much higher than the output value created. Now through some government fiscal policies, bank bailouts, and loose monetary policies, it may be possible to maintain it in the short term, but this situation is not sustainable. In the long term, we still need to revitalize the industry.

The U.S. industry has been relatively empty in recent years. This situation has lasted for a long time. They have transferred all manufacturing industries out, mainly to the service industry. At present, about 80% of the industries in the United States are basically service industries, including the financial industry. Although the United States has strong innovation capabilities, it will be difficult for the economy to recover quickly due to long-term low savings, low investment, national structural liabilities, and foreign w88 deficits. Therefore, the United States needs China to buy U.S. Treasury bonds, which actually means that the United States needs China to lend it money to maintain consumption. The United States' spontaneous investment and savings, that is, its own creative ability, have not yet recovered. This takes a long time.

Europe is also in this situation. The situation in the United Kingdom and the United States is relatively similar. Except for the United Kingdom, among the core countries in Europe, France and Germany, especially Germany, have performed better recently. Because of the structural reforms carried out in the previous period. Germany and France still maintain certain manufacturing industries, have certain exports, and have certain international competitiveness. Germans have always attached great importance to stability. Structural reforms including pension reform and market reform carried out some time ago have further enhanced economic stability.

But this problem also exists in Europe as a whole, especially in some peripheral countries. There are also problems of excessive national debt, over-consumption of residents, and insufficient production competitiveness. Therefore, the sovereign debt crisis that everyone knows has emerged, dragging down the entire Europe. Under such circumstances, it will take some time for the European economy to recover.

The United States and Europe not only have problems in production, but also in savings. When we talk about production factors, part of what is produced must be used for investment, especially investment in some industries, so that economic development can be sustainable.

In addition, population aging is also a very important issue. There are some fundamental problems in Western developed countries that are difficult to solve. The aging of the population means that there are relatively fewer people who can work, so technological innovation is needed. Because no matter what kind of economy it is, it cannot be separated from people. Even the service industry requires a certain amount of manpower to maintain. From a fundamental point of view, both the United States and Europe have the problem of population aging. This situation has not been fundamentally changed for a long time. Instead, the status quo has been maintained through government policies and bank innovations, thus causing imbalances in the entire world economy.

w88 mobile Economic Times: Which countries have the greater impact of the financial crisis?

Shi Shiwei:The financial crisis has had the greatest impact on the United States, because the United States has done the most powerful financial innovation. Asset securitization products increased from US$700 billion in 2000 to US$2.4 trillion in 2007. Banks have transferred a lot of debt, so leverage can enable banks to lend particularly large amounts of loans. At the same time, the long-term implementation of low interest rates by the government has caused the expansion of bubbles, first the stock market bubble, and then the real estate bubble. There are problems in the real economy itself, but for such basic problems, no innovation has been thought of to solve them. Of course, there is Internet innovation in the United States, but after the Internet bubble burst in 2001, this problem became obvious. In order to maintain relatively high growth at that time, the United States adopted the current policy. It can be said that it is now difficult to return. Because bank deleveraging is a very strict policy, many banks can no longer lend, and banks can no longer lend to each other, so blood cannot flow. Of course, some banks have now recovered on the surface due to government measures, but in fact the root of the problem has not been resolved. Deleveraging will take a long time before the banking industry can fully recover, so the impact on the real economy will still be huge. Otherwise, why would the United States pursue a loose monetary policy? This is because the government has no choice but to continuously provide liquidity to banks. Therefore, the current economic recovery in the United States is unstable. Once the government's monetary and fiscal policies are stopped, there is a risk of falling back into crisis. There are still uncertainties in the recovery of the US economy.

From a European perspective, the problem is even greater. The sovereign debt crisis is a problem that leads to national bankruptcies, so Europe must now undertake structural reforms. But there are also dilemmas in carrying out reforms. On the one hand, Europe's problems are indeed caused by governments borrowing too much for a long time while implementing relatively loose monetary policies. For example, Ireland's main problem is bank bankruptcy, Greece's main problem is excessive national debt, and now countries such as Spain, Portugal, and even Belgium have also come in. So these countries have to tighten up now. But of course a tightening will have an impact on the real economy. The state now plays a very important role in the economy. Once austerity is imposed, a lot of investment will disappear, which will also affect employment. So now the country is in a dilemma about these issues. Some people have asked whether austerity can be postponed for a while, but if it is postponed, the fundamental problem may not be solved. I judge that these European countries may now have to adopt austerity policies, so their economies will be greatly affected in the future. Now only w88 mobile has deep pockets, with foreign exchange reserves of 2.8 trillion US dollars. Its economic growth rate was 9.7% in 2009 and around 9% in 2010. So they want w88 mobile to help them.

Link:

http://www.cet.com.cn/20110210/d2.htm

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Crisis prompts changes in the global economic landscape (Part 2)

——Interview with Professor Shi Shiwei of the w88 casino

Our reporter Xu Wei Intern Huang Xiaomeng

("w88 mobile Economic Times"2011Year2month15日）

w88 mobile plays a very important role in stabilizing the world economy

w88 mobile Economic Times: In your opinion, which economies grew faster during the financial crisis?

Shi Shiwei:Now the economies of the five BRICS countries are growing rapidly, not just w88 mobile. Of course, w88 mobile's economy is the best among the BRICS, but countries such as Russia, India, and Brazil are also growing very fast.

With the rapid economic growth of the BRICS countries, their status in the world economic pattern has also been greatly improved. This change in power has already been reflected in some international institutions and systems. For example, the share of emerging economies in the world's most major economic institutions, such as the World Bank and the International Monetary Fund, has increased. This increase in share reflects the new status of these countries in the world economic structure.

China is now the second largest economy in the world, surpassing Japan in terms of total economic volume. In addition, the total foreign w88 volume ranks first in the world and the foreign exchange reserves are also very large. Therefore, China can play an important role in stabilizing the world economy. The first is growth. China's continued rapid economic growth will drive exports to maintain a relatively high growth rate and become an important force in promoting world economic recovery. Second is import. China's rapid economic growth will also drive a substantial increase in import. At present, China is still expanding domestic demand, which requires a lot of capital investment in machinery, factories, large-scale equipment, etc., and these are also the strengths of the West. In addition, China's service industry also needs to develop, which also provides some opportunities for Western countries. Of course, Western countries still have some sanctions on China, such as high technology. But in the face of a new and powerful economic force like China, they may appropriately relax some high-tech exports to China. In this way, China can drive imports through relatively rapid economic growth, thereby contributing to the recovery of economic growth in developed countries. Finally, from a financial perspective, China can also help Western countries through direct financial assistance, thereby stabilizing the world economy.

w88 mobile now holds more than one trillion U.S. dollars in U.S. bonds. In the past period, it provided assistance to Spain, Portugal and other European countries. These are concrete manifestations of w88 mobile's efforts to stabilize the world economy.

Generally speaking, the financial crisis did not have a huge impact on the BRICS countries. This economic crisis was mainly caused by banks. w88 mobile and India have relatively limited openness to their financial markets and have controls on capital flows. In particular, w88 mobile's banks have relatively little international business, so they will be less affected. The Russian economy mainly relies on resource exports and is closely linked to the real economy. Moreover, in the 1990s, Russia had experienced two financial crises and is now in a relatively stable period. The situation in Brazil and South Africa is not very serious either.

w88 mobile Economic Times: What impact do you think the financial crisis will have on the world economic pattern?

Shi Shiwei:My point of view is that this financial crisis is just an outbreak. It only plays a role in promoting changes in the world economic pattern. In fact, this pattern change has already occurred slowly in the past.

Before the financial crisis, the relative decline of some powerful countries had actually continued for a long time. This financial crisis did not come suddenly like an earthquake. In fact, it was an accumulation process, and it will naturally erupt at a certain time.

Now it is a globalized economy. The economy is one of you, one of me, and one of you. It is no longer the purely national economy that it was before. Future economic development may rely more on innovation. From a technical and management perspective, Western developed countries such as Europe and the United States still have innovation advantages. I believe that if the United States can change its policies as soon as possible, increase household savings, reduce consumption, expand exports, and revitalize manufacturing, coupled with its original advantages in the service industry, it will still dominate the global economy for a long time to come. w88 mobile is also a beneficiary of economic globalization. We also hope that the world economy will be stable and we do not want developed countries to decline. Although the international economic landscape has changed. For example, w88 mobile's voting power in the International Monetary Fund has risen to third place, second only to the United States and Japan. France and Germany, which originally ranked before w88 mobile, are behind. In the eyes of Europeans and Americans, w88 mobile has risen to become the second most influential economy. But there is no doubt that the status of the United States has not been shaken. The United States still has a great influence in the world economy. The U.S. dollar is still very important as an international currency and is currently irreplaceable. Therefore, I think the power of developed economies is only relatively weakening, and the power of emerging economies is gradually increasing. It cannot be said absolutely that thirty years of Hedong and thirty years of Hexi.

Link:

http://www.cet.com.cn/20110215/d2.htm

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