As the International Monetary Fund (IMF) and the World Bank hold their Spring meeting, global economists, policymakers, and investors turn their attention to the many conflicts, issues, and challenges the world economy faces. Geopolitical tensions represent a major challenge to the current world economy.
In recent years, significant changes in the global political landscape, such as the Russia-Ukraine conflict and the Israeli-Palestinian conflict, have led to an accumulation of risks in the international trade and investment environment, increased uncertainties, and had a serious impact on the stability of the world economy, and could even trigger market fluctuations and risks in the financial markets.
Geopolitical conflicts continue to ferment globally, from energy crises on the European continent to the reshaping of the security order in the Asia-Pacific region, all posing significant threats to global economic growth.
Sanctions and countermeasures of certain countries not only directly strike their own economies but also affect the stability of global supply chains through the transmission mechanisms of energy and commodity price fluctuations and financial markets, increasing global inflationary pressures and bringing potential risks to food security and social stability in developing countries.
The spill-over effects of macroeconomic policies in various countries also have a profound impact on the world economy. In the context of global economic integration, changes in the economic policies of countries often have a chain reaction on other countries. U.S. interest rate hikes and cuts may lead to fluctuations in global capital flows and exchange rates, in turn affecting other countries' economic growth and financial stability.
Therefore, when formulating macroeconomic policies, countries need to fully consider the impact of spill-over effects and strengthen policy coordination and communication, in order to achieve the stable development of the global economy.
As the world's two largest economies, the trade friction between China and the United States not only affects the economic performance of both sides but also has a profound impact on the global supply chain, value chain, and production network. Facing these issues and challenges, China, as a key engine of the world economy, showed strong growth momentum in the first quarter of 2024.
According to data from the National Bureau of Statistics, China's gross domestic product (GDP) grew by 5.3 percent year-on-year in the first quarter of 2024, a 1.6 percent quarter-on-quarter increase from the fourth quarter of 2023. At the same time, the total value of China's goods trade imports and exports increased by 5 percent year-on-year. These figures indicate that the Chinese economy has started well in 2024, providing important momentum for the recovery of the global economy.
Reference(s):
Challenges facing the global economy and China's engine role
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