In the second year of the pandemic, the poles of the global economy and developed countries are facing new structural challenges that require a rethinking of many old and traditional social and economic concepts.
It started with China, which is a huge country in every way, whether it comes to population or natural resources. According to the US Geological Survey, 38% of the world’s minerals are found in China, and its oil production exceeds the production of all OPEC countries except for Saudi Arabia, and China’s consumption of oil is three times its production, and it imports many neighboring countries. Semiconductor country, equivalent to 30% of its total imports from neighboring countries.
Since the emergence of communism in 1949, China has faced many challenges due to economic policies and some natural disasters, such as the great famine from 1958 to 1962, so the sages of that time realized the difficulty of implementing Mao Zedong Thought contained in the Red Book, in this context, China remembers The famous saying of the Chinese sage Confucius, “King of the Philosophers”, who often said: “Virtue is in the middle.” Yes, she belongs to the middle class, and the more stable her income, the greater her share in any society, the more stable the country. With China adopting this approach, economic transformation began in the 1970s, and over the past three decades, 5 billion Chinese have been quietly lifted out of the poverty line. In 2020, 1% of China’s economy represents the largest value and development after research spending in the United States, but in some areas of digital development such as spending on digital currency and world-changing 5G communications, as well as in Cambodia, Vietnam, etc. Neighboring countries are already ahead of the United States in aspects such as its support for the revival of East Asia.
However, it should be noted that the changes that China is going through are worrisome domestically, as the state interferes in the simplest details, such as children’s playtimes and technology companies, and the restriction of individual freedoms and businessmen as it strengthens the presence of central authority within it. The star’s stature declined.
It seems that China is changing from within, but the world wants this change to keep pace with progress and innovation, and wants it to be an orderly and effective partner in global growth.
China’s importance is that it is equivalent to one-fifth of the global economy, and when the United States fought a trade war with China, the global industrial index (PMI) fell below 50, leading to a global industrial recession. 2019.
Even with a vaccine, the Western capitalist world isn’t much better off a year into the pandemic. Many industries are still suffering, such as the aviation industry, which has been losing money since the beginning of the pandemic, tripled its debt in the past four years, and the energy industry is suffering from a lack of investment and high prices. For example, the largest fertilizer plant Yara (Yara) closed some factories due to the rise in gas prices despite the increase in food prices by 28% according to the United Nations index and the high demand for agricultural products. According to SFG data, at the beginning of this year, the waiting time for semiconductors (electronic chips) increased by more than 26 weeks compared to previous years, compared to less than 12 weeks a few years ago, which means that equipment such as mobile phones or cars will face delays and shortages in the market this year.
All of the above are complex issues that have caused the inflation that the world still suffers from today (7% in the US and 4.8% in the eurozone), and most of the classic monetary laws of 90 years ago no longer exist. Big impact today. For example: the amount of quantitative easing has nothing to do with inflation, it is mainly a shortage of energy, basic commodities and industrial inputs and not an abundance of demand. The composition of the labor market was also affected in the post-pandemic period, so there was a demand for new skills and new professions, which reduced the share of the labor force in society, the importance of the number of the unemployed, and its decline. to 4%. It is important to note that more than 3.3 million workers have recently left the workforce, mostly women, over 50 and less educated than college, confirming that skills develop faster than abilities and skills.
The labor market at certain ages, in addition to encouraging him to increase his social wealth, retires early. Net wealth for households over 55 grew by about 12%, according to the Federal Reserve’s estimate, so lower unemployment isn’t necessarily indicative of full capacity and interest rates. Inflation is unlikely to fall, but it will rise from an annual base, an old problem in the capitalist system, of class distinctions, Medicare and rising student loans.
The development of ideas is the basis for reviving and building civilization, and if China wants to continue to amaze the world, it must consider what Adam Smith, the father of capitalism said: “Individual ambition serves the common good.” The West must also review its old laws to achieve its frozen development goals. As Confucius said: “When you think of an impossible goal, do not change it, but change the way you work to achieve it.”