In face of the ongoing COVID-19 pandemic,countries with different response strategies experience economic rebounds of different paces. As fiscal and monetary policies normalized,China’s recovery has been proceeding in a milder way after taking the lead in 2020,with growth in the second quarter of 2021 slightly weaker than market expectations. In Europe and the US,the recovery is accelerating after gradually building up a barrier against the pandemic. More developing economies,however,are still facing many difficulties. Against this backdrop,certain concerns are raised: is the current global recovery a real one where global governance is restored and the medium- to long-term growth momentum is clear and sustainable? Or is it a short-lived one stimulated by macro policies in response to the impact of the pandemic? The reasoning on this question may affect the basic judgment of the post-pandemic global economy. At a roundtable discussion organized by China Forex,Zhang Ming,Deputy Director of Institute of Finance and Banking,Chinese Academy of Social Sciences and National Institution for Finance and Development,and Xu Gao,Assistant President and Chief Economist,BOC International (China) Co.,Ltd.,shared their opinions on the global recovery. The conversation,which follows in edited form,was moderated by Zhong Wei,China Forex Deputy Editor.

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Zhong Wei: Welcome to this session of Roundtable. As we enter 2021,the recovery in some economies is becoming clear,particularly in the UK and the US. Emerging economies,on the other hand,are showing divergent performance. In this regard,one view is that the global recovery can be sustained in the medium term within the next two to three years,and may be restored to pre-pandemic levels. Another view is that the current recovery is only a short-lived response to the shock of the pandemic,while the fragmented structure of global governance and the continued slowdown in growth have not been changed during the post-pandemic era. Some even contend that the world economy has not yet seen a real recovery ever since the subprime mortgage crisis and the European debt crisis,and that new mechanisms and dynamics are still weak. What would be your judgments on the current economic recovery situation?

Zhang Ming: After the global financial crisis in 2008 and the European debt crisis in 2010,the global economy has fallen into the so-called Secular Stagnation. This kind of stagnation is characterized by “three lows and two highs”: low growth,low inflation,low interest rates,high government debt and high imbalance of income distribution. The reasons for a secular stagnation broadly include an increasingly aging population,slowed technological progress,slowed globalization,increased share of intangible assets in fixed asset investment,and a widening income distribution gap worldwide. Global economic growth plummeted to -3.3% in 2020 and may climb back to 5%-6% in 2021. When the pandemic ends,global economy is likely to return to the low-growth trajectory seen before pandemic.