Editor's note: Liu Chunsheng, a special commentator on current affairs for CGTN, is an associate professor at the Central University of Finance and Economics in Beijing. The article reflects the author's opinion, and not necessarily the views of CGTN.
The Financial Street Forum 2023, taking place from November 8 to 10, stands as a pivotal event in the global financial arena. This year's forum has attracted a diverse array of participants, including government officials, senior executives from financial institutions, scholars, and industry experts from around the world. Together, they engage in meaningful discussions about the current development trends, challenges, and opportunities within the global financial market.
In 2023, the global financial system has been confronted with numerous risks arising from various economic and geopolitical factors. The ongoing conflict between Ukraine and Russia, coupled with the Israeli-Palestinian tensions, has significantly disrupted global supply chains, exacerbated energy price volatility, and heightened geopolitical tensions. These developments have led to increased uncertainty and risk aversion among investors, affecting financial markets worldwide.
Persistent high inflation throughout the year has compelled central banks globally to adopt tighter monetary policies by increasing interest rates. While these measures are essential to combat inflation, they also raise concerns about slowing economic growth and the potential onset of recessions. Policymakers face the delicate task of balancing the need to curb inflation without triggering an economic downturn.
The rise in interest rates has consequently led to higher borrowing costs for both businesses and governments. This situation poses significant risks for countries burdened with high levels of debt, as increased borrowing costs can make debt servicing more challenging and potentially lead to sovereign debt crises.
Climate change remains a profound long-term threat to the financial system. The transition to a low-carbon economy necessitates substantial investments and may result in stranded assets and financial losses for companies and industries unable to adapt effectively.
Addressing these multifaceted risks requires a coordinated global effort to tackle the underlying economic and geopolitical challenges. International cooperation is vital in devising holistic solutions that transcend national boundaries. Through collaboration, countries can pool resources, share knowledge, and develop unified strategies to mitigate risks, stabilize financial systems, and promote sustainable economic growth.
The 2023 Financial Street Forum serves as an essential platform for advancing China's financial reforms and opening up to the world. By fostering global financial cooperation and exchanges, the forum contributes Chinese insights to the construction of a more open, inclusive, equitable, and beneficial global financial system.
Reference(s):
International cooperation for economy recovery and market development
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