Ten scenarios that could turn the world upside down in 2022

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A U.S. stock market crash and widespread social unrest are the two most likely threat scenarios in 2022, significant events that could derail global security and melt economies, a new report has predicted.

Deteriorating relations between Washington and Beijing and a real estate crash in China also feature prominently in the Economist Intelligence Unit (EIU) Risk outlook 2022 relationship, with the two “high” probability events.
The Economist Intelligence Unit has summarized 10 key risks that threaten to derail global security in 2022. (Economist Intelligence Unit)
A highway cyber war affecting the infrastructure of the large economy was, of the 10, ranked the least likely to unfold.
The EIU expectedCOVID-19[female[feminine the recovery will continue in 2022, with an increase in global gross domestic product of 4.1%.

However, the rebound will mask large variations in the pace of the recovery between different regions, according to the report.

These 10 threats could jeopardize global security next year.

The aircraft carrier USS Ronald Reagan and the guided-missile destroyer USS Milius conduct a photo exercise with ships of the Japanese Maritime Self-Defense Force.
The aircraft carrier USS Ronald Reagan and the guided-missile destroyer USS Milius conduct a photo exercise with ships of the Japanese Maritime Self-Defense Force. (PA)

1. The worsening of relations between the United States and China forces the total decoupling of the world economy

The world’s two biggest superpowers, the United States and China, are vying for global influence and domination.

“US President Joe Biden is trying to convince ‘like-minded’ (mostly Western) countries to co-press China,” the report says, including restrictions on trade, technology, finance and investment, as well as sanctions, forcing some markets and companies to choose sides.

The report warns that this could lead to a “neutral position becoming economically prohibitive” for third countries, dividing the economies supporting China and the United States.

The fallout could increase uncertainty in global trade and investment.

2. Unexpectedly rapid monetary tightening leads to US stock market crash

Supply chain disruptions, rising energy prices and ultra-accommodative monetary policy all contributed to a sharp rise in inflation in the United States in 2021, according to the report.

This could force the Federal Reserve to start tightening monetary policy, which in turn could cause interest rates to rise by mid-2022.

“Accelerated increases in interest rates may be enough to initiate a sharp adjustment in the stock markets,” the report warns.

Shares of struggling property developer China Evergrande Group and its property management unit Evergrande Property Services fell.
Shares of struggling property developer China Evergrande Group and its property management unit Evergrande Property Services fell. (PA)

3. The real estate crash in China causes a sharp economic slowdown

The financial problems plaguing the Chinese real estate giant Evergrande “represents a serious risk of financial contagion” in the Chinese economy.

Many Chinese real estate companies are also over-leveraged, according to the report.

If worsening real estate sentiment leads to a series of defaults in China’s real estate sector, Beijing could struggle to contain a wider collapse.

4. Tightening domestic and global financial conditions derail recovery in emerging markets

The economies of emerging countries are vulnerable to inflationary pressures due to the rebound in commodity prices.

“The risks will be particularly high in countries with particularly high foreign currency debt,” the report says, such as Argentina and Turkey.

Brazil, Mexico, Russia, Sri Lanka and Ukraine all raised their policy rates in 2021.

Health officials wearing protective gear prepare to spray disinfectant to help reduce the spread of the novel coronavirus before school reopens in a high school cafeteria in Seoul, South Korea
Health officials wearing protective gear prepare to spray disinfectant to help reduce the spread of the novel coronavirus before school reopens in a high school cafeteria in Seoul, South Korea (Getty)

5. New COVID-19 variants are emerging that are resistant to vaccines

The Delta and Mu variants of the coronavirus have been reported as examples of COVID-19 mutations and questioning the effectiveness of vaccines.

“One of the main risks to the global recovery is that new, more aggressive variants of Covid-19 will prove resistant to current vaccines,” the report says.

The report warns of a “perpetual cycle” of boosters and new vaccines, indicating that no effective vaccine has been developed for HIV / AIDS, despite massive investment and effort.

6. Widespread social unrest weighs on global recovery

The report warns that “a peak in unrest is possible” in 2022 due to the pandemic’s negative effect on income and quality of life.

“Traditionally stable” Western states and long-standing authoritarian regimes were both seen as vulnerable, with the Middle East, Africa and Latin America most at risk.

Major unrest can lead to government collapse, panic investors and destabilize economies.

A Chinese H-6K military bomber conducts training exercises over the South China Sea.
A Chinese H-6K military bomber conducts training exercises over the South China Sea. (PA)

7. A conflict breaks out between China and Taiwan, forcing the United States to intervene

Growing tensions between China and Taiwan have “increased the risk” of military conflict in the Taiwan Strait.

“We expect China to refrain from deliberately entering into a direct conflict with Taiwan, due to concerns about US involvement,” the report said, adding that the president of Taiwan rejected the statement. independence as an explicit political objective.

A conflict would destroy the Taiwanese economy and “risk attracting” the United States, Australia and Japan.

8. EU-China relations deteriorate considerably

EU-China relations have collapsed since the EU imposed sanctions on China for human rights violations in Xinjiang.

The ongoing intensification of sanctions will hurt European and Chinese businesses, the report said, with implications for the wider global economy.

Flames lick a tree as the Windy Fire burns in the Trail of 100 Giants grove in the Sequoia National Forest, California.
Flames lick a tree as the Windy Fire burns in the Trail of 100 Giants grove in the Sequoia National Forest, California. (PA)

9. Severe droughts cause famine

Droughts are expected to become more frequent.

“Water shortages in southern Europe, the Mediterranean, the southwestern United States and southern Africa – the breadbasket of the world – would have short- and long-term consequences for the global economy. The report says.

Multiple poor harvests will cause global commodity prices to rise, with impacts on global inflation.

The report pointed to intense heat waves in Canada and the United States this year, and bushfires hitting Greece, Turkey and Spain.

10. Interstate cyber warfare cripples state infrastructure in major economies

Expect an increase in cyber attacks, the report warned.

Attacks on critical infrastructure, such as food and energy supply lines, or the removal of a national electricity grid, destabilize national economies, with potential global impact.

“Tit for tat cyber attacks” will become commonplace, with geopolitical competition continuing to “heat up” in the years to come.


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