In 2024, the world will face a "Y"-shaped intersection in five dimensions: politics, security, economy, finance, and society, forming an "ambush from all sides" layout.
In 2024, the world will face a "Y"-shaped intersection in terms of politics, security, economy, finance, and society, forming an "ambush from all sides" layout. On January 19, the Chongyang Institute for Financial Studies of Renmin University of China released the "World at the Y-shaped Intersection" report (hereinafter referred to as the "Report") in Beijing. Changes are brewing in the choices. The "Report" analyzes and points out that some countries have embarked on a new development path, some countries are brewing changes, some countries are still on the old path, and some countries are even going back.
The report points out that 2024 is a "super election year" and it is expected that 78 countries and regions will hold a total of 83 elections with universal participation, involving a population of 4.2 billion, accounting for 60% of the world's population. Among them, 40 countries and regions will hold government elections represented by leadership elections or legislative elections represented by parliamentary and congressional elections, accounting for 41% of the world's total population and 42% of GDP. "General elections" are also "the world's biggest risk in 2024."
After the election, some countries and regions will inevitably face the re-selection or adjustment of their development paths. The report points out that in 2024, the frequency of military conflicts will most likely hit a new high since World War II. The growth in military expenditures of major countries is generally 2-3 times or even higher than the growth in GDP. The probability of a short-term settlement of the Russia-Ukraine conflict is very low, and the international situation continues to evolve in the direction of shock, differentiation, and reorganization; the Palestinian-Israeli conflict may involve more military forces, and Israel’s situation of "military superiority and moral condemnation" will continue; conflicts in Asia may break out at any time, such as India-Pakistan, northern Myanmar, and South Korea.
In terms of the world economy, the report points out that the monetary policies of most countries in the world will continue to tighten for a period of time, which will limit the pace of global economic recovery to a certain extent. Major economies, led by the United States and some EU member states, are still facing great inflationary pressure and will not end the monetary tightening cycle prematurely. Instead, they will maintain the current interest rate level for a long time to prevent inflation from rising again. The U.S. dollar interest rate hike cycle will end in 2024, leading the global monetary policy to shift. At the Y-shaped intersection, there is no risk of a global financial crisis in the short term, but the frequent changes in interest rate and exchange rate policies will also exacerbate the turmoil in financial markets in various countries. Economic growth in major global and Western economies will continue to slow in 2024. The interest rate gap between China and the United States will narrow, and China's monetary policy adjustment space will increase.
In January 2024, the World Bank's latest Global Economic Prospects report showed that global economic growth will slow down to 2.4% in 2024, which will be the third consecutive year of deceleration. According to the forecast of the International Monetary Fund (IMF), the global economic growth rate will drop from 3.5% in 2022 to 3.0% in 2023, and further to 2.9% in 2024. According to the forecast of the Organization for Economic Cooperation and Development (OECD), the global economic growth rate will slow down to 2.7% in 2024, which may be the lowest global economic growth rate since 2020. Among them, the economic growth rate of major Western economies, led by the United States, will slow down further. The Federal Reserve expects the US economic growth rate to be only 1.4% in 2024, and the OECD predicts that the US economic growth rate will drop from 2.4% to 1.5% in 2024. The European economy is even weaker, and the economic growth rate is expected to be only 0.9% in 2024.
The report points out that the long-term positive fundamentals of China's economy have not changed. The IMF recently raised its forecast for China's economic growth in 2023 and 2024, predicting that China's economic growth rate will reach 4.6% in 2024.
The report compares and analyzes global macroeconomic policies, and believes that in 2024, global macroeconomic policies will struggle to find a balance between "conservative" and "open". On the one hand, the economic policies of the United States and the West are facing a shift, trying to promote the recovery of their own economies by adopting more intense diplomatic competition policies. In the field of infrastructure, further increase competition with China to promote domestic companies to increase their layout in developing countries; in the field of supply chain, adopt an international contraction strategy and reorganize the global supply chain to help the rise of "re-industrialization" in the country. On the other hand, emerging market countries represented by China are becoming more open. China's macroeconomic policies continue to increase reform and opening up, promote high-level opening up and new economic globalization, release the vitality of domestic entities and the huge development potential of the domestic economy, and seek progress in stability.
The report points out that as the process of globalization encounters headwinds, countries generally show protectionist and populist tendencies. Class contradictions are becoming more and more apparent, and various populist forces and extreme nationalism are on the rise, driving more countries to "turn right"; from "decoupling" to "de-risking", not only China and the United States, but also all countries at the Y-shaped intersection will face the impact of "de-Sinicization", and personnel exchanges, cultural exchanges, and scientific and technological cooperation will all be impacted. In the next few years, a new round of technological revolution represented by Chat GPT and artificial intelligence AI will be in full swing, which will cause profound changes in industrial structure, labor forms and employment structure. At the same time, a new monopoly based on technological innovation has been formed, gradually marginalizing many traditional industries and their practitioners, making the societies of various countries more polarized.
The report concludes that, as Dickens said in A Tale of Two Cities: "It is the best of times, it is the worst of times; it is an era of rapid progress, it is an era of retreat; it is a spring of hope, it is a winter of despair." In the process of globalization, international cooperation and openness are inevitable trends. The Chinese government advocates strengthening international cooperation and reform and opening up, and building a community with a shared future for mankind, which is also in line with the world development trend and the common interests of mankind. We should work together to push the world towards a more open, cooperative and win-win direction.