(Yicai) Oct. 10 -- Countries need to reassess and recalibrate their growth models to adapt to an international environment where geopolitical uncertainty and risks are escalating, posing new challenges to the stability of the global economy and finance, according to a former deputy managing director of the International Monetary Fund.

Trade expansion is no longer the main driver of global economic growth since the 2008 financial crisis, Zhu Min said at the 2024 Shanghai Global Asset Management Forum today. Exports of technology and manufactured products have declined and global supply chains are being reshuffled, he added.

Global deficits will likely reach new highs in the coming years, posing significant risks to financial markets, Zhu noted. Central banks will bear the brunt of these fiscal deficits, he said, adding that their monetary policies face unprecedented challenges, requiring a balance between maintaining financial stability and addressing fiscal deficits.

In the face of these changes, nations must reassess and adjust their growth models to adapt to this new constrained environment, Zhu pointed out. China is building a new model, focused on developing the domestic consumer market, strengthening the core competitiveness of its manufacturing sector, and actively cultivating future core competencies, including carbon neutrality transition, technology, and data capital, he said.

Zhu also stressed the importance of expanding domestic demand, boosting and strengthening manufacturing, achieving carbon neutrality, fostering tech innovation, and capitalizing on data. China will continue to play a crucial part in global manufacturing and have a leading role in green transition and technological innovation, he predicted.

The artificial intelligence era has arrived, and machine cognition enriches human cognition, Zhu said. China is making every effort to build an AI supply chain, with autonomous vehicles and embodied intelligence set to be breakthrough areas in the future, he said, noting that capitalizing on data is the country’s new growth engine.

Yicai and the Bank of China jointly host the Shanghai Global Asset Management Forum. The event brings together regulators, economists, global asset managers, and financial infrastructure firms, aiming to promote high-quality development and high-level openness in the asset management industry and build an ecosystem that serves the real economy.

Editor: Martin Kadiev