Our way out is to aggressively attract equity investments, primarily in agriculture and industrialisation, with an emphasis on exports.
The pandemic has definitely enthroned the term “black swan” on the financial market, which refers to an unpredictable event with major ramifications. In the opinions of many financial strategists, this could hit companies that do business with China. Some compare it to the American financial crisis of 2008, forgetting that the crisis began in the most developed centre of the financial market and its weakening impacted on the production of tradeable goods.
In contrast to the global crisis of 2008, the pandemic started at a time when a large part of the world’s most developed economies was already slowing down and had falling economic performances. The pandemic only deepened the already present echo of the 2008 global crisis, which was never fully overcome within the frameworks of Western economies. The expectation that the pandemic will hit those who do business with China, which accounts for about 20 per cent of activities in the world economy, is just a continuation of the happenings that preceded the pandemic.
We know from previous crises that it is flexible and easily adaptable economies that do best. Those have, to date, been economies that rely on the secondary financial market, but the pandemic has shown that the way out is a quick adjustment to the production of tradeable goods, in which China leads. Unlike China, which successfully reorientated part of the auto industry to the production of respirators and other essential medical devices within 10-15 days, the German car industry rebelled, claiming that several months would be required to shift production.
Accepting our need to work closely with the EU, we must also consider the diversification of international economic relations, primarily with China, Russia and Turkey
A broad analysis of this phenomenon could lead to the conclusion that there will inevitably be a reduction in the volume of production chains between the Far East and the most developed Western countries, but that there will be a strengthening of economic links between the Far East and developing countries. China will have the dominant position in this process, and it will use the “new Silk Road” to increase the volume of production chains with developing countries in Europe, the Middle East and Central Asia. China also leads a similar economic policy in Africa and South America.
Accepting our need to work closely with the EU, we must also consider the diversification of international economic relations, primarily with China, Russia and Turkey. It is obvious that the EU expects difficult and even dramatic socio-economic and political problems, which will hinder our cooperation with certain EU member states to a large extent. A significant part of our production serves the German car industry, which had entered a deep recession even before the pandemic. Our way out is to aggressively attract equity investments, primarily in agriculture and industrialisation, with an emphasis on exports.