Prediction 2019 -- What Is in the Cards for This Year’s Global Economy?
Yicai Global has posed 28 questions on what the year 2019 holds for fields that affect the global economy such as trade, monetary policy, stock markets and cryptocurrencies, and made its own predictions of the answers, which appear below.
Last year, Yicai Global made 46 predictions covering the three fields of the global economy and finance, Chinese economy and finance, as well as global technology and industry. Half of them were correct, and four partly so.
Yicai Global foresaw some of the ideas of US President Donald Trump's New Deal but underestimated the effects of trade frictions between China and the US. The tariff imposed on USD250 billion worth of Chinese exports was beyond Yicai Global's imagination. The downward pressures on the Chinese economy as well as the stock markets were bigger than expected, and thus, the predictions regarding the Chinese monetary policy were misled.
Last year's report suggested that Trump's infrastructure investment plan will land support, and that the US economy will carry on strong, so the US dollar index could exceed 100 in the first half of last year while prompting a bull market to rally. Yicai Global predicted that an economic downturn and a period of adjustments will occur between 2019 and 2020, as it would for China too. The future has shown that our crystal balls were too optimistic.
The reason behind our misjudgment is a mistake called the China-US trade dispute.
The rise of global populism is expanding the gap between the rich and the poor. Policymakers have not been prepared to deal with these citizens' wishes so initiating a trade conflict has been one of the closest tools at hands, regardless of its ineffectiveness in terms of hammering out benefits for either of the parties involved.
Meanwhile, Yicai Global has been pleased to witness a march of science and technology to the forefront of a new kind of industrial revolution, spearheaded by artificial intelligence. Last year, the prediction involved a rise of AI to benefit not only big corporations but also spread to biotech companies, manufacturers and consumers, which has been the case. However, arguably no one could anticipate that the first gene-edited babies would be born in China.
The new year is moving on with greater policy uncertainty and market volatility, while public responses to new policies and business confidence intertwine to affect the global economy, finance, markets and industries. Still, despite a complex starting point, Yicai Global wishes that this year will beat everyone's expectations.