The World Economic Forum’s Global Risks Report 2021 (Global Risks Report 2021) notes that the New Crown (CCP virus) outbreak has intensified the competition between the U.S. and China. In addition, the world needs to be alert to long-term risks.
The report, released Tuesday (Jan. 19), says that “the New Crown epidemic has consolidated state power and intensified competition between the U.S. and China” and that the new U.S. administration may try to cooperate with China in areas such as climate change and epidemics, but the competition could deepen in the long run.
The report also said diplomatic relations may become more volatile as some alliances weaken.
The Eurasia Group, the world’s largest political risk consultancy, also listed U.S.-China tensions as one of the top 10 risks affecting the world in 2021 in a new report released in January.
“U.S. efforts to recruit allies, vaccine diplomacy and climate technology competition will interact with long-standing tensions between the U.S. and China to further complicate relations.” The report said, “At the same time, differences between the two countries on bilateral trade, science and technology, Xinjiang, Hong Kong, Taiwan and the South China Sea will continue to play out, further increasing the potential for miscalculation between the two sides during the crisis.”
The World Economic Forum’s 2021 Global Risks Report also cautions the world against long-term risks. The report said the new crown epidemic has exacerbated social divisions that will hinder economic development over the next three to five years and exacerbate geopolitical tensions over the next five to 10 years.
The financial, digital and reputational pressures on businesses caused by the epidemic, among others, could cause many companies and their employees to fall behind in future markets, the World Economic Forum said in a press release. These potential gaps could lead to social divisions in countries and further geopolitical tensions if middle-ranking countries lack a seat at the global table, which would in turn hinder global recovery.
The risks of a global epidemic that the Global Risk Report has been highlighting since 2006 become a reality in 2020,” Saadia Zahidi, executive director of the World Economic Forum, said in a press release. We know that governments, businesses and other stakeholders face difficulties in addressing such long-term risks, but history teaches us that everyone should recognize that ignoring risks does not make them less likely to occur. As governments, businesses and society emerge from the epidemic crisis, we must act now to build new economic and social systems that increase our collective resilience and ability to respond, while reducing inequality, improving health and protecting the planet.”
The report also says that environmental risks remain one of the top issues in terms of the probability of occurrence and the magnitude of impact of risks over the next decade. Issues such as social fragmentation and uncertainty could further hinder the global cooperation needed to address continued environmental degradation.
The biggest long-term risk remains the failure to act on climate change,” said Peter Giger, chief risk officer at Zurich Insurance Group. There are no effective programs in place to address climate change risks, so post-epidemic recovery plans must focus on economic growth in line with the sustainable development agenda in order to rebuild a better future.”
The report is usually released at the beginning of each year before the annual meeting of the World Economic Forum in Davos, Switzerland. This year, however, the meeting has been postponed to May, when it will be held in Singapore, due to the impact of the new crown epidemic.
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