Weekly News Analysis (2024/5/11): The world’s economic order is breaking down

This paper (magazine) will analyse global news that the author of this paper finds interesting by reading The Economist, the world best business magazine, in a week. Hopefully, this magazine will be updated once a week, basically on Saturday, however, it might not be when the author is extremely busy.

This 'Weekly News Analysis' is written in basic English that can be understood by any levels of English learner. Please use this article to study English and gain your knowledges about global news.

The world’s economic order is breaking down

Dysfunction of WTO and its rules

Two years ago, in the World Trade Organisation's conference, a mechanism aiming to stop the current war (Ukraine/Russia and Middle East) is raised as the agenda. However nothing has been proceeding for this decision, which means a vision that each countries conceives is different, one of them could be for their economic profit, others could be political and military aid for Russia or Palestine. No matter what they want, there is no shared vision that the WTO is attempting to resolve the current problem (essentially, the war). This leads a de-globalisation that is opposite from what WTO tries.

Other things that people can easily find the inclination of de-globalisation are those tariffs, in other wards taxes imposed on imported goods and services. For example, the European Union, the world biggest organisation where focuses on carbon emissions. They produce and invent tons of mechanisms to solve such issues. However, now, they are imposing tariffs to Chinese EV's car which is generally defined as that eco-friendly product for the environment. Expansion of EV cars, even it is produced in China, should be justified and supported in their point of view but it isn't.

Thus, the current situation of economic market is highly biased by the political prejudice. All countries only pursue their domestic profit. Before judging whether it's correct move or not, further practical movement and changes need to be analysed.

Practical Economic trends by de-globalisation

Firstly, the numbers of cross-border trade and investment have stoped even though big countries like America and India growth its speed thanks to their continued low tariffs.

The movement of domestic profit-seeking, which effects on the decrease of global trade and investment, can be seen over several countries. Mexico have ordered the seizure of hydrogen plant French firms operate. South-Africa's government voted to decide the seizure of land belonging to national assets. The government of Chile also announced that they will strengthen the domestic production of lithium battery industries. Russian defenders persists that Eastern countries are planning to take Russian assets held in abroad and use them as aids for Ukraine.

Thus, the movement seems like effected by the war strongly. It's safe to say There seems to be a polarisation（二極化） of the trade, between Russia and its defenders like China and other countries (also combined Palestine and Arabic states).

Shrinking price difference around the world

Thanks to the decrease of globalisation, domestic investment has been increasing and the price difference between rich countries, generally benefits from the cross-border trade, and underprivileged countries are shrinking. 

To define whether it is good or bad, looking from tons of perspectives is needed, however, at least, in terms of the perspective of inequality, which is broadly argued as the one of serious global problems, it sounds optimistic.

The decrease of price difference can foster people' lives in developing countries by making them to get access to global service such as Amazon, Netflix and so forth. Not only for such amusement services, but also it may accelerate their standards of lives for example, access to water, food, medical care, education, vaccine and so on. 

Conclusion

As this paper titled, the order of economic market is now changing even slowly. This kind of movement can be defined as both optimistic and pessimistic. Of course, as mentioned earlier, though price difference within the world is shrinking, it is absolutely not enough to say the world is purely equal. 

To have clear outlook, understanding the world and keep updating your knowledge is crucial in the current world where is changing rapidly. This paper noted very basic information taken from the article. If you would like to investigate and gain your knowledges further, please look at official papers or book written by great analyst.

See you in next weekly news analysis.