The Second Year of Financial Crisis: The Chance of a Double-Dip Is Slim

In the Summer Davos Forum, two economists, Cheng Siwei and Li Daokui and a few entrepreneurs, including Ma Yun discussed about the possibilities of a double-dip recession and valuable experience we could learn from financial crisis.

And this is the second year since Lehman Brothers’ bankruptcy and financial crisis happened. The focus of the forum has been laid on whether China and other countries in the world have already in the process of recovery and how to obtain recovery outcome in a more efficient way.

The chance of a double-dip recession is slim

When the host asked the audiences about their views towards the chances of a double-dip recession, and very few of them hold negative opinions towards global economy which suggests that most of them believe the chance of a double-dip recession is slim.

Cheng Siwei, the former vice chairman of the Standing Committee of the National People's Congress and the president of International Finance Forum, indicated that the world economy has already in the process of recovery but the road ahead has twists and turns. China is experiencing a normal transitional period this year.

Li Daokui, a member of the central bank Monetary Policy Committee and director of China and World Economy Research Centre, clearly stated that the chance of a double-dip recession is slim since developed countries have already adopted appropriate measures to prevent double dipping. However, the financial crisis is a cataclysm to developed countries and the upcoming changes of the world pattern becomes the major concerns.

Li Daokui also believed that consumer confidence worldwide is gaining back as the PMI figures suggested. Some emerging market countries, including China, have already been developing in a healthy manner which will provide beneficial conditions for the next five to ten years development.

Nevertheless, Cheng Siwei stated further that although the double dipping chances are slim, there could still be possibilities. The challenge that we are confronting during the process of recovery is European sovereign debt crisis which will exert negative influence on the Europe recovery tempo. Moreover, issues can be found in the American economy and unemployment rate. Given the combination of political and economical factors, there are still many uncertainties of American economy recovery and which will influence the world economy recovery.