HONG KONG, 24 APR – China is seen to continue hold a dominant position with the major emerging economies’ bloc BRICS (originally comprising Brazil, Russia, India, China and South Africa).
Brussels-based think tank Bruegel’s senior research fellow Alicia Garcia-Herrero analysed that China’s economic size and increasing assertiveness in foreign policy give it a dominant position in BRICS, which ws reflected in intra-bloc trade flows and in the bloc’s foreign policy positions. She opined that the future of BRICS was uncertain given its heavy dependence on China’s economic future and the deteriorating sentiment towards China among its members.
“India’s fast growth and increasing geopolitical heft also pose a challenge for the continuation of BRICS as a China-centric grouping,” wrote Garcia-Herrero, who is also a Hong Kong University of Science and Technology adjunct professor.
She noted that the origins of BRICS, which now includes Egypt, Ethiopia, Iran and the United Arab Emirates, could be traced back to a 2001 publication by Goldman Sachs economist Jim O’Neill titled ‘Building Better Global Economic BRICs’.
She said that O’Neill argued that Brazil, Russia, India and China were poised to play an increasingly significant role in the global economy.
“His prediction was that by 2050, these countries would collectively account for 40 per cent of the world’s economic output.
“In reality, from 2012 to 2022 China alone has accounted for around a quarter of global gross domestic product (GDP) growth, and the BRICS countries together contributed over 45 per cent,” Garcia-Herrero said.
The original BRIC was officially launched in 2009 and renamed BRICS in 2010 when South Africa joined the group.
Garcia-Herrero observed that since then, trade relations had clearly grown, but in a very unbalanced manner.
“Most of the growth in trade has been China-centric, with the contribution from the rest of BRICS remaining quite flat until recently.
“The recent increase is mostly explained by India, which has experienced an acceleration in economic growth. “BRICS members are increasingly intertwined with China as far as trade is concerned, but the remaining members have very few ties among themselves.
“Bilateral trade between BRICS members other than China remains extremely low,” Garcia-Herrero said.
She saw that China’s sheer economic size – five times greater than India’s – and China’s increasing assertiveness in foreign policy explained China’s dominance of BRICS. “BRICS countries have increasingly similar positions to China at the United Nations.
“This is not only the case for issues within China’s sphere, such as Xinjiang-related resolutions, but also more global issues such as resolutions on the invasion of Ukraine and the Israel-Palestine crisis.
“The only exception on Ukraine has been Brazil, which voted in line with the West in March 2022.
“But Brazil’s diplomatic stance on Ukraine has become much more blurred since then and its position has fully aligned with China’s on the conflict in Gaza,” Garcia-Herrero said.
She figured that China had been the leading proponent of expanding BRICS to BRICS+.
“The main reason for expansion was to make BRICS more representative of the developing world and give it a stronger voice on the global stage.
“But the six countries invited to join – which has become five after Argentina’s withdrawal – are quite heterogenous. “Some are net creditors (such as Saudi Arabia and the United Arab Emirates), while others are net debtors and in a very weak financial position.
“Half of them are large exporters of fossil fuels (Saudi Arabia, the United Arab Emirates and Iran).
“Ethiopia and Egypt stand out as members from Africa, a continent that has become increasingly important for China’s and India’s foreign policy,” Garcia-Herrero observed.
The questions that arise, she said, were what BRICS could achieve with such a heterogeneous group of members, and whether it would be able to maintain its objectives after expansion.
“The group has called for comprehensive reform of the International Monetary Fund and the World Bank to make the institutions more representative, accountable and effective in addressing global challenges.
“BRICS has also consistently advocated for comprehensive reform of the United Nations, arguing that its current structure with five permanent members holding veto power does not represent the interests of all member states.
“One increasingly important objective of BRICS is to become the new platform for developing countries to voice their concerns and interests.
“The international financial architecture is an area where members’ positions can clearly be aligned,” said Garcia-Herrero.
She stressed that BRICS promoted the use of local currencies in trade between its member states, especially in trade with China, as well as supporting rules-based, open and transparent global trade.
The expansion of its membership, she said, evidently supported that objective.
“The actual impact of BRICS expansion will depend on several factors, including the group’s ability to overcome its internal challenges and the response of the West.
“Still, the smooth expansion is a clear sign that the global balance of power is shifting and that developing countries are playing an increasingly important role in global affairs.
“How BRICS will fare over time depends on several factors.
“First and foremost is how China’s power evolves.
“There is increasing consensus that China’s long-term growth will continue to decelerate, which will reduce the opportunities that the Chinese market has to offer for BRICS members and others.
“A second important factor is how BRICS members and their populations come to perceive China,” she said.
Garcia-Herrero zeroed-in on that fact that the heterogeneity of BRICS was not only economic but also political.
“The elephant in the room is India, which finds itself in an increasingly uncomfortable position in groupings that are dominated by China.
“Still, the group’s diversity and its members’ respective comparative advantages could turn out to be a boon not only for China but also for India,” she said.
Garcia-Herrero summarised that BRICS, which started as a primarily economic initiative to mark the transfer of economic power to the emerging world, had grown into an important geopolitical grouping.
“China’s centrality and the diversity of its members present both challenges and opportunities.
“The future of the grouping is uncertain, given its heavy economic dependence on China and the deteriorating sentiment towards China among its members.
“India’s fast growth and increasing geopolitical heft create additional challenges for the continuation of a China-centric BRICS,” Garcia-Herrero concluded. – airtimes.my
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