Trade war threatens global economy

Rising oil prices, high debt level, trade war and low productivity pose serious threat to the world economy, experts warned on Monday.

They said Asian countries need to be united to face this looming uncertainty.

"Oil prices may shoot up to $ 100 per barrel by 2020 and the global commodity market will also be volatile," Zhang Yuyan, director of the Institute of World Economic and Politics, Chinese Academy of Social Sciences, said.

His comments came at a panel discussion on Asian economy during the inauguration of the Asia Media Cooperation Workshop held at the State Guest House in Boao Island.

Zhang said the global debt level is increasing and has increased by $ 75 trillion in the last 10 years.

This rise in debt level dwarfed the global GDP, which rose by only $ 24 trillion during the same period, he noted.

He argued that rising fluctuations in exchange rates and volatility in property prices were also matters of concern for the global economy.

In developing countries like Argentina, exchange rate fell by 50 per cent and in Turkey it went down by 30 per cent.

Such fluctuations cause confidence crisis among people on the world economic order, he noted.

Referring to the present US policy towards world trade, he said this affects the World Trade Organisation (WTO) and Asian countries need to be united for their common cause of reform in the WTO mechanism to avert the negative impact of American policy.

Zhao said that despite spending in research and development, world productivity was not increasing.

In the United States, it fell by 1.7 per cent last year, he said.

According to him, rising population, especially the aged, is also a major concern.

In India alone 16 million babies born every year and its population will cross 1.4 billion by 2025. So creating employment for such a large number will be a serious challenge for them, he said.

Senior research fellow of East Asia Institute at Singapore National University Dr Lam Peng Er urged the Asian policy makers to take decisive steps to absorb the shock of the global economic uncertainty.

Fang Jiangshan, deputy editor in chief of the Peoples Daily, Lee Jong Heon, secretary-general of the Trilateral Cooperation Secretariat, and Ng Yat Chung, CEO of Singapore Press Holdings Ltd spoke on the occasion.

They stressed the responsibility of the media is to build mutual trust among the people through objective reporting to promote trade in the region.

Mr Feng said since the opening up of China 40 years ago, the world's most populous nation has prospered dramatically and it made a positive impact not only on its Asian neighbours but also on the global economy.

At a separate function, vice governor of Hinan province Wang Lu explained the main features of the government's plan for a free trade zone (FTZ) in Hinan and the advantages the prospective investors would enjoy there.

The Chinese government is working on a pilot project for this zone and if it turns successful, it would be built on an area of 12,000 square kilometres, which would be 32 times bigger than Hong Kong. China has 11 such zones.

Mr Lu was briefing the media leaders and journalists gathered at Boao to attend the Media Cooperation Forum on Belt and Road about the Hinan FTZ. He sought their support in the province's bid to attract investors.

mirmostafiz@ yahoo.com