At present, China's macroeconomic situation is facing an extremely complex situation. The "three main lines" of Russia Ukraine conflict, epidemic development and policy response are intertwined, the market expectation is still unstable, and the peripheral uncertainty is further rising. Under the complex deduction of these three logical lines, pessimism and optimism interweave, and the capital market is bound to fluctuate sharply. The economic situation in the first quarter was not optimistic, and it was more difficult to achieve the annual growth target of 5.5%.
Russia Ukraine conflict: geopolitical contradictions are acute, and the pressure of "stagflation" has increased significantly
The development of the situation in Ukraine may be beyond Putin's expectations. Russia's intention is to fight against Pro Western forces in Ukraine and win over Pro Russian people through a small-scale and rapid military operation, just like the occupation of Crimea in 2014, so as to achieve the purpose of curbing NATO's eastward expansion and ensuring Russia's national security. Now it seems that Russia's strategic intention has not been realized, and the military conflict shows signs of delaying. The conflict between Russia and Ukraine will have a lasting and profound impact on the development of global politics and economy, and increase the external geopolitical risks faced by China.
First, we should pay close attention to the evolution of western economic sanctions tools. Historically, the main sanction tool between countries was trade embargo to stop the trade of goods. Since this century, the Western camp represented by the United States has gradually developed a set of mechanisms to sanction politicians or specific institutions. Since the conflict between Russia and Ukraine, the Western camp has adopted unprecedented financial sanctions, including freezing the overseas assets of the Russian Central Bank and commercial banks, prohibiting Russia from participating in international payment and settlement transactions, etc., with the intention of isolating Russia and limiting Russia's foreign economic activities. Globally, the scale of financial transactions is much larger than that of trade activities. The two are not of the same magnitude. The impact of financial sanctions is obviously greater than that of trade sanctions, especially for Russia. At present, these sanctions have had a huge impact on Russia, with the stock market plummeting, the ruble plummeting, and sovereign debt facing Default.
Secondly, we should be vigilant against the extended harm of abusing financial sanctions. The US dollar based international settlement system provides the possibility of long arm jurisdiction for financial sanctions, which is used by the west to coerce other countries to interrupt economic exchanges with Russia. The US Department of Commerce said that if Chinese enterprises violate US sanctions against Russia, they will cut off the supply of production equipment and software to China. At present, many Russian and Chinese mobile phone companies, including Geely and Lenovo, have suspended their business. The possibility of western countries imposing sanctions on China under the pretext of China's support for Russia cannot be ruled out. The existence of this country risk will increase foreign capital's concern about the Chinese market and stimulate foreign capital to flow out of China further.
Of course, we cannot underestimate the impact of the traditional trade embargo on commodity prices. Although Russia accounts for less than 2% of Global trade, it accounts for 11% and 17% of global crude oil and natural gas supply. Recently, the prices of bulk commodities such as crude oil, coal, wheat and non-ferrous metals with large export volume in Russia have risen rapidly, and the oil price once exceeded US $125 / barrel in early March. Rising commodity prices will be a significant drag on the global economic recovery. On the one hand, major institutions have lowered their expectations for global growth. The median forecast for global GDP growth has been reduced by 0.3 percentage points to 4%, 0.2 percentage points to 3.5% for the United States and 0.7 percentage points to 3.3% for Europe; On the other hand, the forecast of global inflation was raised by 0.6 percentage points to 5.1%, 1.1 percentage points to 6.2% for the United States and 1.5 percentage points to 5.3% for Europe. The risk of "stagflation" in the global economy has increased.
