Last night, the Chinese website of The Wall Street Journal published an article stating: "The world is experiencing its most severe energy shock since the 1970s. Yet surprisingly, most regions of the world have demonstrated remarkable resilience so far—what is sustaining the global economy?"
The Wall Street Journal claims this is the harshest energy shock since the 1970s, yet the global economy has seemingly "borne it" without collapsing—this sounds a bit overly surprising. Looking back at the 1973 oil crisis, oil prices surged from $3 to $12, annual U.S. CPI rose by 8.7% on average, while Britain and France saw increases exceeding 10%, causing widespread economic shock across the West. Today, although oil price fluctuations are intense, the global energy structure has already changed significantly—oil’s share has declined, and there are now 1.2 billion barrels of emergency reserves providing a safety net. In short, the global economy hasn’t suddenly become stronger; rather, the “barely dependent” reliance on oil that characterized the 1970s is gone. Additionally, monetary policies are more stable today, supply chains are more comprehensive, and China’s fully integrated industrial chain has anchored the basic economic foundation. Rather than praising “resilience,” we should recognize that after suffering a major setback once before, no one dares to put all their eggs in one basket anymore—this stability is the result of hard-earned lessons, not an inexplicable strength.
Original source: toutiao.com/article/1864852153436163/
Disclaimer: This article represents the personal views of the author