At present, the global epidemic situation is still severe, coupled with factors such as tight supply chains and rising food and energy prices, the overall inflation level in many developed countries has been pushed to the highest level in a decade. A number of authoritative experts believe that the world economy has entered a “high cost era” and is showing a “six high” situation
Increased health protection costs. Tang Jianwei, chief researcher of the Bank of Communications Financial Research Center, believes that from a short-term perspective, the epidemic has led to a decline in the production of primary products, obstruction of international logistics and trade, a shortage of supply of industrial products and rising costs. Even if the situation gradually improves, the prevention and control of epidemics and the spread of epidemics will still be the norm. Liu Yuanchun, vice president of Renmin University of China, said that the normalization of epidemic prevention and control will definitely increase our protection costs and health costs. This cost is just like the “9.11″ terrorist attack directly led to a sharp rise in global security costs.
Human resource costs increase. According to a research report released by the China Macroeconomic Forum on March 26, after the outbreak of the epidemic in 2020, the global labor market has undergone drastic changes, mainly in developed countries, and there has been a surge in unemployment. With the continuous development of the epidemic and changes in national epidemic prevention policies, the unemployment rate has declined. In the process, however, the decline in the labor force participation rate has created labor shortages of varying degrees in various industries, accompanied by rising wages. In the U.S., for example, nominal hourly wages rose 6% in April 2020, compared to the average wage in 2019, and have increased by 10.7% as of January 2022.
The cost of deglobalization has increased. Liu Yuanchun said that since the Sino-US trade friction, all countries have reflected on the traditional division of labor system, that is, the construction of the supply chain and value chain with vertical division of labor as the main body in the past, and the world must pay more attention to safety rather than pure efficiency. Therefore, all countries are building their own internal loops and formulating “spare tire” plans for key technologies and core technologies, resulting in a decline in the efficiency of global resource allocation and an increase in costs. Experts such as Zhang Jun, Chief Economist of Morgan Stanley Securities, Wang Jun, Chief Economist of Zhongyuan Bank, believe that whether it is the high mortality rate caused by the global shortage of masks and ventilators in the early stage of the epidemic, or the production of mobile phones and automobiles caused by the shortage of chips later The decline or even the suspension of production has exposed the fragility of this global division of labor based on the principle of Pareto optimality, and countries no longer regard cost control as the primary consideration for the layout of the global supply chain.
Green transition costs increase. Experts believe that after the “Paris Agreement”, the “carbon peak” and “carbon neutral” target agreements signed by various countries have brought the world into a new era of green transformation. The green transition of energy in the future will push up the price of traditional energy on the one hand, and increase investment in green new energy on the other hand, which will raise the cost of green energy. Although the development of renewable new energy can help alleviate the long-term pressure on energy prices, the scale of renewable energy is difficult to meet the growing global energy demand in the short term, and there will still be upward pressure on energy price fluctuations in the short and medium term.
Geopolitical costs rise. Experts such as Liu Xiaochun, Deputy Dean of the China Institute of Financial Research at Shanghai Jiao Tong University, Zhang Liqun, a researcher at the Macroeconomic Research Department of the Development Research Center of the State Council and other experts believe that currently, geopolitical risks are gradually increasing, which has greatly affected the global political and economic landscape, and the supply of energy and commodities. Chains are becoming more fragile, and transportation costs are increasing dramatically. In addition, the deterioration of geopolitical situations such as the Russian-Ukrainian conflict has led to a large amount of human and material resources being used for wars and political conflicts instead of productive activities. This cost is undoubtedly huge.
Post time: Aug-20-2022