Vaccine·Bidenomics… What are the 7 issues that will determine the global economy this year?

[뉴스토마토 이정윤 기자] As the Corona 19 pandemic (a global pandemic) continues in 2021, economic uncertainty related to this, such as vaccines and an unbalanced economic recovery, is expected to be high. In addition, the government is changing in the United States, and in China, the growth paradigm for five years from this year is also predicted to change in policies in advanced countries.

On the 3rd, the Bank of Korea selected seven issues that will determine the direction of the world economy in 2021 in’Overseas Economic Focus’. The seven major issues include △Commercialization of Corona 19 vaccine △Bidenomics (Bidenomics economic policy) full-fledged △ China’s transformation of growth strategy △ Normalization of global hegemony competition △ Potential intensifying economic imbalance and political conflict in Europe △ Global economic recovery imbalance △ Climate change The reinforcement of related international response efforts was cited.

First of all, looking at the commercialization of the Corona 19 vaccine, the time to commercialize the vaccine is coming faster than expected, as major countries have recently begun vaccinating the Corona 19 vaccine. Considering the vaccine supply plan, it is expected that advanced countries will approach collective immunity in the second half of this year. However, the feeling of rejection of vaccination and the possibility of delaying the release of some vaccines may act as constraints for the early end of Corona 19.

US President-elect Joe Biden will lead the United States for the next four years, starting with the inauguration ceremony on the 20th of this month. After the inauguration of the new Biden government, Bidnomics is expected to be promoted in earnest, with the focus of expanding fiscal expenditure, increasing taxation, multilateralism and eco-friendliness. In addition, large-scale fiscal expenditures, infrastructure investments, and easing of uncertainties in the global trade environment are expected to have a positive impact on the global economy as a whole.

Another powerful country, China, has declared that it will change its growth strategy from this year. In November of last year, Chinese President Xi Jinping declared that in accordance with the five-year economic plan to achieve socialist modernization within 15 years, the scale of the economy could be doubled by 2035. China plans to seek a shift from the existing export-oriented growth paradigm by utilizing the potential of the huge domestic market through a bicyclic growth strategy in accordance with the 14th Five-Year Economic and Social Development Plan (2021-2025).

The BOK predicted that “China’s participation in the global supply chain may be reduced due to the effect of the dual cycle policy, but its potential as a global consumer market will expand.”

Most experts and organizations believe that even if the Biden era begins, the conflict between the US and China will continue. As the US public policy shifts to a principle-based check method, the conflict between the US and China is likely to prolong. As a result, uncertainty in US foreign policy will be alleviated, but as the US public checks intensify, the negative impact of the hegemony competition may expand.

In addition, there is a possibility that economic imbalance and political conflict in Europe will intensify. This is because the economic and political conflict between member states could spread amid the widening gap in economic power in Europe due to the Corona 19 incident. Conflict may be intensified, centering on issues of conflict among member states, such as the refugee issue and climate change.

This year, it is predicted that economic improvement among countries will appear differently depending on the time of vaccine supply and financial capacity, and as the impact of Corona 19 is concentrated in the service industry and the low-income group, the imbalance in economic recovery will become clear among sectors within the country. While the expansion of the imbalance between advanced and emerging economies restricts the recovery of the global economy, there is a high possibility that the impact of Corona 19 will stick to the deepening of the imbalance between classes and industries within the country.

In addition, international efforts to respond to climate change will be strengthened. With the new climate system inaugurated from this year, the new government of Biden is expected to shift the policy stance related to climate change in the United States. As such, responses from the international community such as environmental regulations and investment expansion are expected to be further strengthened. As governments expand investment in eco-friendly technologies, competition for preoccupying new industries and markets is expected to intensify and development of eco-friendly technologies is expected to be promoted.

“The global economy in 2021 is expected to expand in the second half of the year due to the commercialization of the Corona 19 vaccine and the expansion of fiscal expenditures by the new US government, despite some negative factors such as deepening global economic recovery imbalance.” Various issues, such as the US-China conflict and the global economic recovery imbalance, are influencing, and there is a possibility that the global economy will develop in an unexpected direction.”

Reporter Jeongyoon Lee [email protected]

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