2021 Global Trends

In 2021, the direct impacts of the COVID-19 pandemic on global political and economic security may weaken, but its indirect, or secondary, impacts still cannot be ignored. The following 10 trends deserve great attention.

World economy starts restorative growth

After the pandemic-induced downturn, the world economy in 2021 will start recovering from historical low levels. The IMF estimated that the real global GDP growth rate will reach 5.2% in 2021, a 9.5-percentage-points increase from the previous year. The real GDP growth rate of emerging and developing economies in 2021 will rebound from -3.3% to 6.0%, and developed economies will also recover from -5.8% to 3.9%.

Gap in economic scale between China and the United States further narrows

The COVID-19 pandemic has accelerated the Chinese economy's relative upsurge in size against that of the United States'. Among the major economies including G20 members, only China maintained positive growth in 2020. The 2.3% growth was certainly a significant drop from the previous year's 6.1 percent. But it was an impressive accomplishment under the impact of the pandemic. China, with its early, swift, and forceful responses as well as support of its strong manufacturing capacities and "Internet Plus" approach, has taken the lead in controlling the pandemic and preventing “aftershocks”.

Affected by the pandemic, the US economy shrank by 3.5% in 2020, and the size of China’s economy got closer to that of the United States'. The IMF predicted that China’s GDP would be equivalent to 76.8% of the US' in 2021, and reach 90% by 2025.

A multi-polar pattern of global politics emerges

After Brexit, the consistency in the EU increased. EU’s large economy established a very solid political and economic foundation for it to stand along with China and the United States. A strong, ambitious European Union that pursues unity and self-reliance is qualified as an independent pole in the global political landscape. It is expected that starting from 2021, a multi-polar pattern featuring China, the US, and Europe, as well as other major powers like Russia, Japan, Australia and India will gradually take shape.

Political polarization and social division intensify in many countries

In 2021, the trend of political polarization and social division in many countries will further intensity. In Europe, standoffs between the "Leave" and "Remain" factions in Brexit, groups that support immigrants and anti-immigration populists, and between extreme right-wing and extreme left-wing forces, played out at the same time. In the US, the 67% presidential election turnout in 2020 set a record in 120 years. Trump won more than 74 million popular votes, which greatly exceeded the 65.85 million and the 65.92 million votes Hillary Clinton and Barack Obama respectively received in 2016 and 2012. This reflects the division and polarization of domestic politics in the US. In India, the pandemic has aggravated Indian domestic social stratification.   Political polarization is a projection of economic and social divisions. The pandemic has exacerbated inequality and vulnerabilities in many countries. For example, the number of unemployed workers in low-wage service industries in the US has increased. Bloomberg Billionaires Index shows that now white Americans own 83.9% of the national wealth, while black families own only 4.1%.

The international community may again be divided along ideological lines

Western powers are joining hands to drag the world into ideological disputes. On one hand, the Biden administration is active in playing the “ideologe card”, emphasizing that democracy is not only the foundation of American society, but also the source of American strength. On the other hand, the European Union takes the initiative to cater to Biden’s idea and is prepared to support democratic values around the world, adjust its strategic goals, and promote "democracy" and "progress" in Asia. In 2021, Western developed countries led by Europe and the United States may highlight differences and contradictions between “democratic societies and market-economy countries” and “non-democratic societies and non-market-economy countries”, coerce private sectors of their countries and related countries to stop cooperating with the latter, striving to turn ideological confrontation into something profitable for both Western governments and private sectors.

The game between major powers shifts from confrontation to competition and cooperation

Major powers, who once saw their relations became predominantly competitive, even confrontational driven by the Donald Trump administration, will more likely develop pragmatic relationships that feature both competition and cooperation in various fields in 2021 - they may place more emphasis on competition in some fields, and more on cooperation in other fields. To its partners, the Biden administration opposes Trump’s style of politics, and will reiterate its commitments, increase investment, and rebuild relations with allies and partners on the basis of restoring historical partnerships. As for China, while stating they it will coordinate with allies and partners and deal with China with a rules-based approach, the Biden administration also emphasizes that the US will stand in line with China based on international norms and rules in the fields of climate change, non-proliferation and global health and security.

China always upholds the spirit of no-conflict, no-confrontation, mutual respect, and win-win cooperation with the US, and expressed willingness to jointly promote healthy and stable development of bilateral relations. China will continue to support the European integration process, and believes that EU can play a greater role in international affairs.

International governance shifts to multilateralism and regionalism from regional integration

Significant progress has been made in major regional cooperation arrangements such as the Regional Comprehensive Economic Partnership Agreement in 2020. The progress of regional integration is critical to regional and global responses to the COVID-19 pandemic, and will play an important role in building regional resilience through inclusive and sustainable economic recovery in the post-pandemic era.

In addition, multilateral cooperation is also ushering in new opportunities. Biden said that the new administration would eliminate trade barriers and resist protectionism, and would jointly formulate rules on environment, labor, trade, technology, and transparency with other democratic countries. These commitments are in line with European objectives. Although there are still many difficulties in multilateral consultations in the future, a new impetus for international cooperation driven by regional integration and multilateralism is taking shape.

Technological progress affects the form of war and national security

Big data, artificial intelligence, drones and other technologies are advancing, affecting not only the production and lifestyle of human beings, but also the form of war and national security. First, the field of war has greatly expanded. With the support of advanced technology, war has expanded its sphere from sea, land, and air to space, from macroscopic space to microscopic space, from the physical world to the virtual world, and from battle scenes to life scenes. Second, the means of confrontation have greatly diversified. Technological advancements in the fields of direct energy, life sciences, artificial intelligence, and networks may change the ways of commanding, conducting, and verifying wars. Finally, the ethics of war changes. With the development of artificial intelligence and other technologies, labor can be completely replaced by non-human technologies. The value of human being may decline, then the importance of human lives may be ignored as well. In 2021, there may be more special wars with new technologies as the main weapons.

Global supply chains begins adjustments oriented at security and flexibility

The COVID-19 pandemic has made most countries realize the importance of supply chain security. In 2021, the distribution of the global supply chain as well as the layout of research and development may begin to shift from efficiency-oriented to safety-oriented to a greater extent. True security is based on openness and development. The fundamental way is to create new domestic and global supply chains that are pandemic-resistant, convenient, flexible, intelligent, and secure. Countries with strong production capacity and effective anti-pandemic measures, like China, may become global safe islands when other countries seek backup supply chains.

Climate change may cause frequent natural disasters

In recent years, climate change is affecting the whole world. In 2021, extreme weather in the world may become more frequent.

Contributed by Institute of World Economics and Politics, Chinese Academy of Social Sciences; National Institute of International Strategy

Translated by Ren Meiqi