BRICS a builder of more inclusive global order
For the second time in two months, President Xi Jinping is visiting Russia, this time to attend the BRICS summit and the 15th meeting of the Council of Shanghai Cooperation Organization Heads of State in Ufa, capital of Russia’s Bashkortostan republic, on July 8-10. At the BRICS summit, Xi is expected to meet with Russian President Vladimir Putin for the second time this year, and meet leaders of other BRICS member states— Brazil, India and South Africa. Howthe member states should cooperate to transform BRICS into a leading transnational economic bloc could be high on the agenda of the leader-toleader meetings.
As British economist JimO’Neill, now commercial secretary to theUnited Kingdom’s Treasury who coined the term “BRIC” to describe leading emerging markets, said two years ago, China is the one and only BRICS economy. In other words, he implied that the economic engine of the bloc was now China, whose annual average growth rate is estimated to drop to about 6.6 percent by the end of this decade. Among all BRICS states, India has been the biggest disappointment for the former chairman of Goldman Sachs AssetManagement.
O’Neill coined the term more than a decade ago probably to identify newoverseas destinations for Goldman Sachs and disperse the risks of investment in advancedWestern economies.
Yet it has become an international political concept and a transcontinental organization of five emerging economies, boosting China’s image and confidence in the post-Cold War era as a regional leader. By including the BRICS summit in the report of the 18thNational Congress of the Communist Party of China in 2012, Beijing attached greater importance to the bloc in order to supplement its multilateral diplomacy.
But there are signs that the days of emerging countries playing a central role in the world economy are coming to an end, with most of them sliding into slower growth or entering the “newnormal”, as in China’s case. India, too, cannot take comfort in its growth rate of just 5.5 percent in the past fiscal year.
An important fact to be noted is that theUnited States has recovered from the global financial crisis and is ready to replay the role of the world’s major economic engine, with China being the other. The ongoing energy revolution featuring shale gas, the industrial revolution led by 3D printing technology, and the consumption revolution of financial services demonstrate once again theUS’ innovating and self-repairing capability.
Seeing the progress made byWashington’s “pivot to Asia” policy, especially in advancing the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership, someUS policymakers believe their country remains the global leader and China has little chance to catch up with and “challenge” it.
But China, being a committed upholder of a more inclusive global financial order, has no interest in doing so. The BRICS summit is expected to see China, along with the other member states, pushing for the establishment of the BRICSNewDevelopment Bank. With an initial authorized capital of $100 billion, the Shanghai-based bank will fund infrastructure projects within the bloc and other developing economies.
Looking to the future, BRICS could infuse newenergy into the G20— which comprises the five BRICS member sates, G7 countries, the EuropeanUnion and seven other economies— and even the global order. As the world’s second-largest economy, leading BRICS member, and a strong supporter of medium and small economies, China has every reason to build a thriving BRICS community to unite the G20. The author is a professor of international relations at Renmin University of China.