According to 257 economists polled by Reuters, the global economy is approaching a recession, but 70% of the survey’s participants believe the chances of a sharp rise in unemployment levels will be low. The poll follows the Biden administration and the U.S. Commerce Department issuing a package of trade restrictions against China’s relationship with the semiconductor industry. Tensions between China and the U.S. have led observers to suspect that China may invade Taiwan within the next few years. Accounts stemming from the 20th Communist Party Congress (CCP) conference note that Xi Jinping reportedly discussed completing the country’s control over Hong Kong and “Taiwan is next.”
Polled Economists Believe Global Economy Draws Closer to a Recession, Rabobank Market Analyst Says It’s ‘Pretty Much a No-Brainer’
The world’s economy looks gloomy following the aftermath of the Covid-19 pandemic response, and the recent tensions between major nation-states. Globally, the inflation rate has risen in all countries. Rising energy prices due to financial sanctions as well as ongoing Ukraine-Russian war tensions have also contributed to this situation. Thomson Reuters’ news agency Reuters published a survey of 257 economists on October 25. The poll found that a majority believe the world is in recession. A global strategist at Rabobank, Michael Every, told Reuters that the “risk of a global recession” is at the forefront of everyone’s conversations.
“I think that’s pretty much a no-brainer when you look at the trend in all the key economies,” Every said. Every added, “If unemployment is strong, it allows central banks such as the U.S. Federal Reserve ammunition to increase rates.” “The longer [the jobless rate] stays stronger the more central banks will feel that they can continue to hike rates,” Every remarked.
70% of those polled thought that the likelihood of unemployment rising was low to not very likely. The poll’s data that started on September 26 and through October 25 is a downgraded outlook compared to the stats Reuters recorded in July. “Global growth is forecast to slow to 2.3% in 2023 from an expected 2.9% this year, followed by a rebound to 3.0% in 2024, according to Reuters polls of economists covering 47 key economies taken Sept. 26-Oct. 25,” the news agency’s reporter Hari Kishan wrote. As far as China, the second largest economy is concerned, the polled economists say the country is “expected to grow 3.2% in 2022.”
U.S. Tensions With China Elevate, ‘New Export Controls on China’s Chip Industry’ Have ‘Assured an Invasion of Taiwan’
The Reuters poll was conducted at a time of high tension between China and America. The meeting with Nancy Pelosi (the American representative from California) was deemed disrespectful by China when she visited Taiwan in August. At the time, the White House said China is preparing to carry out “military provocations” while Chinese warships practiced military drills in the Taiwan Strait. Two Chinese intelligence officers were charged by the U.S. for using bitcoin to bribe a government worker and gain access to classified documents.
On October 7, 2022, the U.S. Commerce Department initiated and crafted a package of semiconductor-related trade restrictions against China. The New York Times (NYT) reported that the “White House issued sweeping restrictions on selling semiconductors and chip-making equipment to China, an attempt to curb the country’s access to critical technologies.” Emily Kilcrease, a senior fellow at the think tank called the Center for a New American Security, told the NYT the move was “an aggressive approach by the U.S. government to start to really impair the capability of China to indigenously develop certain of these critical technologies.”
A number of Americans believe China will invade Taiwan after the United States’ latest clampdown on China. Capitalist Exploits contributor Chris MacIntosh explained that the Biden administration adding “new export controls on China’s chip industry” has just “assured an invasion of Taiwan.” MacIntosh also spoke about the 20th CCP conference and noted that China’s president Xi Jinping said control of Hong Kong is now “complete” and that “Taiwan is next.” MacIntosh is not the only person that thinks China will invade Taiwan, as the Sri Lankan geopolitical blogger Dhanuka Dickwella thinks an invasion could happen this winter.
In a recent blog post, Dickwella also mentioned the well-documented CCP conference and the forceful removal of China’s former president Hu Jintao. “Hu Jintao’s forceful removal from the party congress for the eyes of the whole world thus represents the departure of those approaches,” Dickwella said on October 22. “The approach of working closely with the West as well as trusting on negotiations for settling the dispute with Taiwan will effectively come to an end.” On Tuesday, JPMorgan boss Jamie Dimon said tensions between the U.S. and China and the ongoing Russia-Ukraine war are “far more concerning” than a recession.
How do economists feel about the Reuters poll showing that they believe a recession may be imminent? Is the potential for tension between China and America to provoke the invasion of Taiwan a possibility? Leave your comments below to share your thoughts.
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