Containers carrying goods for export are seen in Qingdao Port, East China's Shandong province, on June 9, 2022. (PHOTO / XINHUA)
Due to the damage from the COVID-19 pandemic and the Russia-Ukraine conflict, global growth is expected to fall from 5.7 percent in 2021 to 2.9 percent in 2022－significantly lower than 4.1 percent that was anticipated in January, according to the Global Economic Prospects report released by the World Bank last week. It warned that the global economy is entering what could become "a protracted period of feeble growth and elevated inflation" reminiscent of the stagflation of the 1970s.
As it cautioned back in February, inflation has come back faster, spiked more markedly, and proved to be more stubborn and persistent than major central banks initially thought possible.
The Organization for Economic Co-operation and Development has also downgraded its forecast for the year, predicting global growth of 3 percent, down 1.5 percentage points from its projection in December.
The two organizations attributed their respective downgrades to the ongoing Russia-Ukraine conflict and the lockdowns in China in response to the reemergence of the novel coronavirus. The lockdowns and restrictions on the movement of people in various places over the past few months have taken a heavy toll on economic activities nationwide, which has had spillover effects on the global industry and supply chains.
But with the pandemic situation in Shanghai and other parts of the country basically under control, production and life are returning to normal. As a result the economy is gradually overcoming the negative impacts of the epidemic, and it is expected to register "reasonable economic growth" in the second quarter if the epidemic can be effectively controlled and the pro-growth measures take effect, a spokesman for the National Bureau of Statistics said on Wednesday.
Regardless, it is not China's prevention and control measures that are the primary disrupter of the global supply chains, nor the Russia-Ukraine conflict, despite its impacts on energy and food supplies. The main source of supply chain disruptions is the United States' attempts to exclude China from them. Washington has made it clear that it seeks to decouple China's economy from the rest of the world in the name of boosting supply chain security and resilience, either by bringing supply chains home, reshoring production, or sourcing materials from countries other than China.
The "Indo-Pacific Economic Framework for Prosperity" that the US signed recently with some Asia-Pacific countries is just the latest example of how it is seeking to rebuild the world economic order as a means of sidelining China.
Such disruptive measures, compounded by the shocks from the Russia-Ukraine conflict and the US' massive pandemic stimulus, have pushed inflation to unprecedented highs in both advanced and developing economies, which is greatly worsening the economic woes of countries worldwide.
Rather than seeking division and confrontation, countries should work together to rebuild and reinforce the global industry and supply chains, and counter the energy and food price increases so as to control inflation and get the world economy back on its feet.