The impacts of Ukraine crisis on the world economy

OUYANG Xiangying1

(1.Research Division of Marxism World Political Economy Theory, Institute of World Economics and Politics, Chinese Academy of Social Sciences)

【Abstract】In 2015, the world economy keeps its slow recovery, yet intense geopolitics as well as armed conflicts still contribute to primary risks which lead the world economic downturn. While the Ukraine crisis is far from settlement, it would have five significant impacts on the world economy. First of all, the process of de-dollarization would be accelerated in the world; although the US dollar, playing the role of international currency, could not be threatened in the short run, it would not go the same in the long run. Second, the international supply condition of energy would vary, and then a rebalanced situation of supply and demand in American, European and Russian market is expected to take shape. In the third place, the price of international crude oil drops sharply; food supplies meet a shortage in the world; the bulk commodity market fluctuates significantly. In the fourth place, the gold price in the international market experiences a slight increase, while stock prices in the world continue rising; as both the developed economies and the emerging markets have booming stock markets, the Ukraine crisis would make limited influences on the flow of international capital. Last, European economies face a tough recovery process, which gives more uncertainties to the development of world economy; as a result, the world economy is trapped in a fatigued, weak and unbalanced state.

【Keywords】 Ukraine crisis; world economy; de-dollarization; international price of crude oil;


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(Translated by MENG Chao)


    [1]. ① According to explanatory terms of database of the Russian Central Bank, Russian international reserves are composed of foreign exchange reserves, gold reserve, IMF reserve position and the special drawing rights (SDR). [^Back]

    [2]. ② Till April 2009, China’s officially published gold reserves were 1,054 ton; however the real amount was far more than this. See Jeff Clark, China Gold News (中国黄金报), August 5. 2014. This passage adopts official data, without any adjustment. [^Back]

    [3]. ① As a strategic pillar industry, Russian natural gas is negotiating with the Stock Exchange of Hong Kong Ltd. in terms of listing. If listed successfully, Russian natural gas would be the third Russian company to list in Hong Kong after RUSAL and Russian IRC Mining Company. [^Back]

    [4]. ① The imported natural gas in Europe includes both pipeline gas and liquefied natural gas. Most pipeline natural gas is imported from Russia, Norway and so on; most liquefied natural gas is imported from Qatar, Nigeria and so on. There are four primary pipelines connecting Russia and Europe: the first channel is across Ukraine, reaching Slovakia, Czech Republic, Germany and Austria in the west, and reaching Moldova and Bulgaria in the south; the second pipeline reaches Germany via Poland and the Republic of Belarus; the third pipeline reaches Turkey via eastern Ukraine and across the Black Sea; the fourth pipeline crosses the Baltic Sea and directly reaches Germany from Russia. [^Back]

    [5]. ② In May 2015, the engine of European economy, Germany announced that it would end all nuclear power station by the end of 2022. The energy gap resulted from ending nuclear power station would be mostly compensated by natural gas. This means Germany would import more natural gas. [^Back]

    [6]. ① China Oil Press Center, China Petroleum Daily (中国石油报), February 25, 2014. [^Back]

    [7]. BP Statistical Review of World Energy, June 2013. [^Back]

    [8]. ① America is the largest consumption country of natural gas, weighting 22% of world aggregate amount. Before 2014 it relied on import. Since 2010, benefited from shale gas revolution, America has gradually reduced its natural gas import, generally realizing a supply and demand balance. Precisely, America imported slight natural gas till 2013, among which there was 78.9 billion cubic meters of pipeline natural gas and 2.7 billion cubic meters of liquefied natural gas. The degree of import reliance in 2011 and 2012 are 6.5% and 5.9% respectively. [^Back]

    [9]. ① There are two components in the New York Mercantile Exchange, NYMEX and COMEX. NYMEX is in charge of energy, platinum and palladium transaction, while COMEX is in charge of gold, silver, copper, aluminum futures and options transaction. [^Back]

    [10]. ① [America] Condoleezza Rice, Washington Post (华盛顿邮报), March 7, 2014. [^Back]

    [11]. ① Li, L. China Gold News (中国黄金报), August 15, 2014. [^Back]

    [12]. ① In Ukraine, large companies in industries including machinery manufacturing, metallurgy, shipbuilding, national defense, military and aerospace, they were originally managed by the Soviet Union and now have close cooperation with Russian relevant companies, especially in eastern cities like Kharkov, Dnepropetrovsk, Donetsk and Odessa. Since Ukraine got independent, every government take adjusting the industrial structure as the breakthrough of reform, but only got little effect. This reality is what Ukraine has to face up. [^Back]

This Article


CN: 10-1168/D

Vol , No. 03, Pages 90-108+128

June 2015


Article Outline


  • 1 The process of de-dollarization is accelerated in the world
  • 2 The international energy supply is expected to be rebalanced
  • 3 The impacts on crude oil and bulk commodity like food
  • 4 The impact on gold market and global stocks
  • 5 The impact on the European as well as world economy
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