Emerging markets ‘new force to reckon with’
China India cooperation will off set impact of anti-globalization
By Chu Daye
Cooperation among BRICS (Brazil, Russia, India, China and South Africa) countries will offset the adverse effects of trade protectionism stirred up by the US, experts said on Tuesday.
Wang Yiwei, director of the Institute of International Affairs at Renmin University of China, told the Global Times on Tuesday that the rise of emerging countries such as China and India are representative of markets powered by their real economies, and they represent a hope to reform the global economic order, which is afflicted with problems. The US is likely to be the biggest loser from the tariff war it initiated, as
other countries involved would start trading with each other to make up losses from US market, experts said, especially considering the enormous size of markets in some emerging countries, such as China and India.
The current trade structure of the BRICS countries and the new model of globalization that emerging countries stand for would also enable such a transition.
“The decline of the US is of its own making, while the multilateral cooperation model supported by countries including China and India is based on a form of globalization featuring shared growth and opening-up, and this is different from the colonialism and hegemony that dominated the last century,” Wang said.
One sign of emerging countries’ growing importance is their economic scale. According to a report by global financial services provider DBS, the 10 major Asian economies, including China and India, will see GDP amounting to more than $28 trillion and surpassing that of the US as early as 2030. “Together, China and India are a
2.6-billion population market.
Such a market would feature induses tries with economies of scale, and the two geographically close markets have factors that will boost trade and invest, ment,” Zhang Ning, a research fellow at the Chinese Academy of Social Sciences, told the Global Times
The BRICS agreed to fight against trade protectionism together after a meeting during the Group of 20 summit of finance ministers and central bankers in Buenos Aires on Monday. The agreeahead ment was reached a head of a three-day BRICS summit in Johannesburg that will kick off on Wednesday, according to
“The multilateral cooperation model supported by countries including China and India is based on a form of globalization featuring shared growth and opening-up.” Wang Yiwei, director of the Institute o Renmin University of International Affairs at China
media reports.
The world’s two most populous countries also seem to be working toward a common goal. China has removed tariffs on some Indian agricultural products and vowed to make the imports of Indian drugs easier. To combat US protectionist policy, India joined China, Canada, Mexico and the EU to impose tariffs on US imports.
Zhao Gancheng, director of the Center for Asia-Pacific Studies at the Shanghai Institute for International Studies, pointed out that trade among BRICS is far less developed than each member’s trade with developed countries.
“Should they trade more among the bloc, BRICS countries are themselves a vast stage for trade, investment and exchanges,” Zhao said.
“China and India are in the same boat amid the anti-globalization trend, and India must be willing to side with China to stand for multilateralism at the BRICS summit,” Zhao said, noting that US policy will also hurt India as its drive to develop Indian manufacturing, such as the “Make in India” initiative, makes progress.
Zhang said as Chinese labor-intensive industries leave the nation, they could tap India’s vast labor resources in the process.
US restrictions on Chinese imports of American high-technology goods will prompt China to intensify cooperation with India to tap the latter’s tech talents, Zhang said.
Wang said a change in the direction of capital flows and a remaking of the global value chain will be concrete methods for emerging countries to reform a global economic system dominated by the US.
However, experts also said emerging countries’ challenge to the US world economic order will take a long time.