Three forces that are shaping the world
Editor's Note: The following are excerpts of a speech given by Zhu Min, an economist with Tsinghua University and former deputy managing director of the International Monetary Fund, at the China Development Forum held in Beijing on Sunday:
Looking to the future, there are three forces that will shape the world over the next 50 years.
The first is the economy and finance, particularly inflation. Monetary policy is quite loose in the world as a whole. Since the potential growth of the world is much lower than the average level over the past 10 years, and the public debt is so high, the interest rate of the liquidity is almost zero, so the market has become extremely sensitive. We are in a process of unbalanced recovery.
Inflation will return in a big way. Many countries have raised interest rates, including Brazil, Turkey and Russia, indicating inflation will not only appear in the United States, it is hiding in many corners of the world. So central bank governors must maintain good exchanges with the market. Low interest rates and the high debt ratio will co-exist over the next decade. But this is unsustainable in the long run, as it is impossible to print currency notes like this forever. The world is confronted with grave macro-economic problems.
The second force is technology innovation. The advancement of technology is too fast, and its influences are universal. But we still do not know our direction. For instance, artificial intelligence is still a black box, as we have no idea how to control it, and how it will impact manufacturing, the social structure and lifestyles. Over the next few decades, technology will progress at an even faster rate. But there exist so many uncertainties about it.
The third force is carbon neutrality. It will not be a kind of economic cost, but a big opportunity, particularly to China, as it can fundamentally change production and people's consumption and lifestyles. It is a paradigm shift. China is trying to transform its traditional industrial development model to a green model. It is quite a big change but it will lay a solid foundation for China's green development over the next decade. Many European countries vow to realize carbon neutrality by 2050, and China by 2060. Both are not easy. But it will impact the world in many ways, as it involves technology, innovation and efficiency.
Countries must cooperate closely in the three aforementioned fields. We are all in the same boat, and have to unite and make joint efforts.