II. The World Economy is Deeply Affected by the Negative Impact Of Di-Globalization.

II. The World Economy is Deeply Affected by the Negative Impact Of Di-Globalization.

By Li Xiangyang

Director of National Institute of International Strategy

Chinese Academy of Social Sciences

In the year 2019, all the main economies in the world are relaxing monetary policy. The sluggish growth of the world economy presents a general slowdown in the growth of all types of economies. The International Monetary Fund predicts that the global economic growth rate will be about 3% in 2019, 0.6% lower than that in 2018, the lowest level since the international financial crisis in 2008.

There are many factors leading to the general slowdown of the growth rate, among which the most prominent one is investors' concern about the growing trend of protectionism or di-globalization: the Appellate Body of the WTO is put to a "stop" for the first time due to the obstruction of the U.S. government; the twists and turns of Britain's "Brexit" have increased people's worries about protectionism; the growth rate of Global trade is expected to maintain only a slight growth, which will be down to about 1% from 3.6% last year, so it is difficult for trade to play a role in stimulating global economic growth. As a result of these factors, manufacturing sectors and new export orders have declined, and global investors confidence has fallen below the average level over the past decade. In 2020, with the expectation that the trade environment may improve, the global economic growth rate may recover slightly.

The negative impact of di-globalization on global economic growth continues to deepen, and the multilateral trade system based on WTO rules is facing unprecedented challenges. China is an active participant, firm defender and important contributor to the multilateral trading system, because it is in the common interests of vast number of countries in the world to maintain the multilateral trading system. The new development concepts advocated by China's leaders featuring innovation, coordination, green, openness and shared results have set the direction for China's high quality development, especially a higher level of all-round opening up and collectively building the Belt and Road will open up new growth space for the world economy.

(Edited excerpts of the article in People’s Daily 26 December 2019)