On February 22, A. Michael Spence, Philip H. Knight Professor Emeritus of Management, Stanford University, Senior Fellow, Hoover Institution at Stanford University, 2001 Nobel Laureate in Economics had an online dialogue with Bai Chong-en, Dean of Tsinghua SEM and Executive Deputy Dean of Tsinghua IGD at the Global Asset Management Forum in Shanghai, discussing major issues in the process of global economic transformation and the complexities of the post-pandemic era cooperation between major powers.
Professor Spence pointed out that under the shadow of the pandemic, the supply chain tension and other problems have not been completely alleviated, and the global economic development in 2022 will still be difficult. Although the successive interest rate hikes in developed economies have suppressed the internal spread of inflation to a certain extent, given the interweaving of the global economy and finance, the spillover effect of interest rate hikes in the short term may lead to capital outflows from some vulnerable developing economies. The possibility of financial turmoil, but overall, not yet triggering a global financial crisis.
When discussing the issue of dealing with potential crises, both speakers said that the world's major economies, including China and the United States, need to put aside disputes pragmatically as soon as possible and work together to overcome the difficulties. Major powers can fully cooperate in public areas such as addressing climate change, promoting sustainable development, and providing vaccines to the world, so as to gradually get rid of the blockade of economic cooperation caused by some external factors in the name of "national security", and bridge the gradual differentiation of global society, so to guide international relations back to the right track.
When it comes to economic transformation, both speakers agree that the development of the digital economy will lead to significant productivity gains. Large-scale adoption of digital technologies will drive inclusive growth in areas beyond the economy in health, education, and many other sectors. They jointly pointed out that while digital platform companies bring new economic momentum, how to balance regulation and innovation is a realistic issue facing the authorities of various countries. Based on the experience in the development and supervision of the platform economy in various countries in the past few years, they believe that private enterprises cannot be expected to be self-disciplined, but they cannot be intervened by the government across the board. Countries can exchange experiences and cooperate in the supervision of such innovative things. In addition, Professor Spence also pointed out that the collection and extensive sharing of data is a necessary prerequisite for taking advantage of the digital economy.
When talking about economic transformation, the two speakers agreed that the world has undergone tremendous changes compared with the past three to four decades, the development model of unlimited supply is coming to an end, and the world economy will face supply constraints. Whether it is a "digital transformation" or a so-called "energy transition", there will be short-term social friction. Given that society's tolerance for friction is decreasing, countries should join hands to build a sound social security system, which can not only alleviate the impact of transition to a large extent, but also promote the healthy development of international relations.
Finally, when talking about China's future economic trend, Professor Bai Chong-en pointed out that China's economic model is changing from cheap labor driven to technological innovation, which may have an impact on the operation of the world economy. Professor Spence expects China’s relatively high economic growth will continue at least into the next decade.
