Three New Trends Of Global Economy In 2011

Current world

Economic virtualization mainly refers to economic finance.

The so-called "financial and economic" means that the proportion of the broad financial industry including banks, securities, insurance, real estate credit and so on in an economy is increasing and has a profound impact on the economy and politics of the economy.

Since the 80s of last century, economic finance has become more and more obvious. Economic relations are increasingly financially related (such as debt and debt), and social assets are increasingly financially oriented, especially the non intermediation and Securitisation of financing.

In early 80s, the stock market value of developed countries was basically the same as that of GDP, and now its market value is generally more than 3 times that of GDP.

In recent 20 years, global GDP growth has averaged less than 4%, while global trade growth has averaged 6%, but global capital growth is 14%.

In the increasingly virtualized world economy, the virtual degree of the United States is more serious.

In the 50s and 60s of last century, the output value of manufacturing in the United States accounted for more than 27% of GDP in the United States. In 2007, before the outbreak of the subprime crisis, this proportion had dropped to 11.68%. The largest contribution to the GDP industry in the United States has been the virtual economy represented by the financial and real estate services (excluding residential construction industry).

Before the subprime crisis, the total profits of US financial and real estate services accounted for more than 40% of the total profits of American enterprises.

The United States, which relies too much on the virtual economy, has been hit hard by the subprime mortgage crisis.

After the financial crisis, western countries led by the United States came back to the real economy.

The Obama administration announced the national export plan in September 2010, and plans to double export strategy within 5 years.

In the name of "quantitative easing", the United States drives the banknote printing machine at full speed to provide unlimited financial support for the "re industrialization" of the United States.

International financial leverage

The so-called financial leverage refers to the realization of economic entities through debt to control the larger asset size with smaller capital, thereby expanding profitability or purchasing power.

Before the subprime crisis, unregulated financial innovations made the financial leverage of the United States, Britain and other countries more and more intense, until the peak was reached, and the average leverage ratio was about 30 times.

Leverage has contributed to economic prosperity and contributed to the financial bubble.

After the outbreak of the financial crisis, the United States and Europe have passed the financial regulation reform bill, strengthening financial supervision and restricting the speculation and expansion of financial institutions.

In September 2010, the Basel Banking Regulatory Commission adopted a reform plan to strengthen the capital requirements of the banking system, requiring all commercial banks of the world to further raise the capital adequacy ratio (the lower limit will be raised from the current 4% to 6%), and establish the new common stock "capital retention buffer" and "counter cyclical capital buffer".

With the implementation of the US Europe regulatory reform bill and the "Basel agreement III", the international financial deleveraging process is expected to accelerate.

Nowadays, the crisis of violent storms is fading away, but the deleveraging of financial products, financial institutions, investment institutions and consumers is still continuing.

Financial activity has shrunk, and normal economic activities such as investment, production and consumption have been continuously affected.

Globalization of world economy

Globalization makes the economic boundary increasingly blurred, and the flow of people, logistics, capital flow and information flow make the resource elements be allocated globally.

Transnational capital and developed countries actively promote globalization and emerging markets to embrace globalization.

In this process, the world's anti globalization wave has never ceased.

After the outbreak of the financial tsunami in the 21st century, many governments launched an economic stimulus plan to cope with the deterioration of the economy.

However, globalization has caused the stimulus effect to "leak" through import or cross-border capital flows, so that the benefits of domestic economy can not be maximized.

This provides a justification for trade or market protection.

The United States, which always held high the banner of economic liberalism, took the lead in offering the banner of protectionism and demanded the purchase of products made in China.

Other countries have followed suit and nationalism is generally on the rise. The governments of developed countries are changing from "releasing the market" to "protecting the society".

As a result, economic friction and international cooperation became the basic tone of the depressed world economy in the 2010.

At a high-level seminar held in Shanghai in October 2010, Kahn, President of the world monetary fund, opposed the former idea of financial liberalization. Instead, he suggested that capital controls should be implemented in Asia if necessary, so as to prevent the financial crisis.

The world today is unlikely to enter the era of "closed door" again. However, the slow pace of globalization and the increase of economic barriers are unavoidable.