The commercial war crises and Brexit are once again taking their toll on the global economy, after global attempts to coexist with the Corona virus, which is still eating away at the main pillars of the economy in each country separately, the degree of its impact on it varies according to the strength and qualifications of its financial infrastructure.
Although the intelligent mind says that a global, participatory economy at this stage is the best way to come out with the least losses, decision makers in most countries consider it merely artificial intelligence, to promote only and not to implement.
Before Corona, the global economy was affected by the decline in global trade, with oil prices fluctuating as a result of reduced demand after the establishment of reciprocal tariffs between the United States and China, the largest economists in the world, so that the global economy slowed down, and then certain sectors around the world were affected, so unemployment and thus poverty increased .
The trade war hit the world economy, at a time when it was another knockout that preceded it, in the repercussions of the British exit from the European Union (Brexit).
The general state of the global economy, which took months or even years to get out of this financial malaise, worsened, but Coffid-19 came to end the rest of it, which was hardly done through industrial devices (fiscal stimulus and the use of all monetary policy tools).
The Corona virus came to find that monetary policy (lowering interest rates and credit facilities) in most countries has all been exhausted. The International Monetary Fund Manager indicated on Friday a possible downward adjustment of the global economic outlook, and warned the United States and China against re-igniting a trade war that might undermine recovery from Corona pandemic virus.
The fund’s director, Kristalina Gorgeeva, said at an event organized by the European University’s Institute on the Internet that the latest economic data for many countries fell short of the fund’s already pessimistic forecasts of a three percent contraction in 2020.
The global lender predicted last April that the global economy would shrink by 3 percent, to record the biggest decline since the Great Depression of the 1930s, to be followed by a partial recovery in 2021, but he warned that the results could be worse, which is what Depends on the course of the pandemic.
Today, Georgieva warned that a retreat into protectionist policies could weaken the prospects for a global recovery at a critical stage.
A revitalized world trade is necessary to ensure a global economic recovery, “otherwise costs will rise, incomes will decrease and we will be in a less secure world.” According to Georgieva.
The International Monetary Fund has already provided emergency funding to fifty of the 103 countries that requested help. Poor countries still face a great risk, as remittances drop sharply and commodity prices fall, even with low mortality rates from the virus, including in some richer countries.
– Decision makers neglected the risks
Meanwhile, the US Chamber of Commerce, Beijing, has appealed for a massive increase in purchases of American goods as the Chinese economy recovers from the outbreak of the new Corona virus, saying that increased purchases will support both countries and the global economy.
Myron Brilliant, director of international affairs for the largest working group in the United States, said, “With the Chinese economy approaching a return to normal, we hope that China will significantly increase its purchases of American products in line with the stage 1 agreement, and will continue to take steps to increase the openness of its economy.”
It seems from the American accent, the insistence on focusing on the same vision, before and after the Corona crisis, despite the great difference in visions, which is clearly shown in the financial results and economic figures in both countries, and indeed in the whole world.
Under the agreement signed by the United States and China in January and ending the two-year trade war between the two countries, Beijing pledged to increase its purchases of US products by $ 200 billion over two years, and to reduce a number of agricultural trade barriers that Washington says were limiting The possibility of entering the lucrative Chinese market.
However, the paralysis that affected the global economy due to the outbreak of the recent coronavirus and the growing disagreement between Washington and Beijing over the origin of this epidemic raised doubts about whether this agreement would actually be implemented.
A senior US trade official, who said last month, said that China is still “very, very committed” to its pledges under the Phase 1 trade agreement with the United States, despite the unprecedented economic and health implications of the emerging Corona virus.
The day before yesterday, the Chinese Ministry of Commerce announced that the Chinese and American negotiators pledged to “provide the appropriate conditions” for the implementation of the first phase of the trade agreement that the two countries reached at the beginning of the year, despite the tensions caused by their dispute over the emerging Corona virus and the catastrophic economic repercussions of this epidemic.
Last week, US President Donald Trump threatened trade sanctions against China, blaming it for the outbreak of the deadly epidemic in the world and its catastrophic economic repercussions.
All this indicates the stage before a trade agreement was reached between the two countries, as the Chinese team is procrastinating a lot and the American are insisting more.
– China’s current account deficit of 30 billion dollars in the first quarter
Meanwhile, China posted a current account deficit during the first quarter of this year due to mounting pressure from the Coruna epidemic.
Data from the State Administration of Foreign Exchange, reported by Xinhua on Saturday, showed that the deficit in the current account of the Asian giant reached 29.7 billion dollars during the first three months of 2020.
The Chinese goods trade recorded a surplus of 4. 26 billion dollars, while the services trade witnessed a deficit of 47 billion dollars, a decline of 26 percent year on year, which is mainly due to the poor demand in the travel and transportation sectors due to the epidemic of “Covid – 19 ». The net direct investment flow during this period was $ 9.9 billion.
Wang Qiying, a spokeswoman for the bureau and chief economist, noted that China’s international balance of payments maintained a basic balance in the last quarter, with stable capital flows across borders. The spokeswoman cited the country’s sound economic foundations and opening-up moves, and said that with commercial and productive activities gradually returning to their track, the balance of payments would be stable in the future.
The “Brexit” danger, amid the outbreak
German Foreign Minister Heiko Maas warned of the increased risk of a difficult exit from the European Union (Brexit) in the midst of the Corona pandemic.
“It is a matter of concern that Britain continues to move away from our agreed political statement at the focal points of the negotiations … This is not permissible, because the negotiations are a complete package, as stipulated in the statement,” Maas said in comments to the German newspaper “Augsburger Allgemeine” published on Saturday. The Political ». According to MAS data, it is not expected to reach an agreement on a comprehensive trade and partnership agreement or to extend the deadline for negotiations beyond the end of this year. The minister said: “The British government still refuses to extend the deadline … If this continues to happen, then we will have to deal with Britain’s exit from the European Union, along with Corona, until the end of this year.”
Mas also called on the United States to cooperate with the European Union to overcome the economic repercussions of the Corona crisis, and said: “We must cooperate now to push the global economy and world trade forward again despite Corona.”
Mas said that together the European Union and the United States will have an exceptional influence that should be benefited from on the world stage. He said: “We are based on a common foundation of values, and we have much more in common than conflicting interests.”
Mas stressed that crisis management will be a priority for the German government during the period of the rotating presidency. He said: “We must keep the pandemic under control through coordinated measures as possible, and at the same time restore Europe’s economic recovery to its proper course. His country’s presidency of the Union. It should be noted that Germany will chair the Council of the European Union beginning in early July for a period of six months.
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