On March 20th, IMF Vice President Zhu Min delivered a speech themed on “The New Challenging World” at the Tsinghua PBCSF Global Academic Leaders Forum, sharing his insights on the undergoing new changes of global economic pattern.

From a new dimension, Zhu Min redistricts the world as GDP map, trading map and financial map. He pointed out, taking Germany at the Eurozone as an example, that the circulation of a new currency in a region will change its economic and financial structure.

In the world economy, there are developed-countries-centered financial consumption clusters, vertical supply chain manufacturing clusters, mainly among emerging market countries, and energy industry clusters, represented by countries such as Saudi Arabia, springing up and  interacting with each other via core countries, said Zhu Min.

Through research, Zhu finds that virtual economic ties, such as finance and information, resonate between countries after the financial crisis and hyper-interconnectivity, co-movement and spillover effect are shown in global economy.

When talking about the future global economic prospect, Zhu believes that the overall economic growth is not going well in terms of GDP growth, output gap and potential growth. The decline in trade and outward foreign direct investment forms a paradox with the economic globalization, while the tendency that financial and economic interaction increases and people’s decision-making behavior is becoming more identical, forms another paradox with traditional macro management theory of economy and finance, which is two-dimensional paradox.

“This is a new era. We are in a new challenging world totally unexpected ten years ago. Changes are taking place more deeply at structural level and beyond those in macroeconomic cycles. It is a huge challenge for financial policymakers and researchers worldwide.” He stated.

At the end of his speech, Zhu expressed his expectation on PBCSF students to pay more attention to strengthening individual core competence so as to face with the new opportunities and challenges brought by global interconnectivity.

Tsinghua PBCSF Global Academic Leaders Forum is a public non-profit academic forum. The world’s most renowned speakers, including Nobel laureates, noted professors, and senior executives from foreign central banks and other financial regulators are invited to share their insights.