Development finance: the new engine for BRICS Co-operation and Development
THE TENTH BRICS Summit, to be held in Johannesburg, is a significant event for co-operation between BRICS countries. President Xi Jinping and President Cyril Ramaphosa will attend the meeting, aiming to enforce mutually beneficial co-operation among BRICS countries and the comprehensive strategic partnership between China and South Africa.
They will also make a contribution to constructing a community of common destiny for all mankind.
Last September, at the invitation of President Xi, BRICS leaders gathered in Xiamen, China, to hold the ninth meeting, where they reviewed and summarised the achievements made throughout the 10 years under the BRICS co-operation mechanism, put forward the Xiamen Declaration, reached a broad consensus on further deepening co-operation and ushered in the second golden decade of BRICS co-operation.
Through the joint efforts made by member countries, BRICS has become an important engine for global economic growth, with remarkable accomplishments in a variety of areas, including economy, finance, international security, environmental protection and global governance, which have brought about greater fairness and reasonableness in the global economy and governance system.
At present, the world is in a period of great development, huge change and major adjustment. The global trends toward multi-polarity and economic globalisation are intensifying, the global economy is in difficult recovery and all countries are facing many common threats and challenges. Only by strengthening solidarity and co-operation can we achieve lasting stability and development. The initiation of BRICS is the very response to the common needs of the five member countries and follows the trend of history.
Therefore, we highly expect the Johannesburg summit of BRICS leaders to achieve fruitful results, deepen practical co-operation in various fields, and inject new impetus into a closer, more comprehensive and stronger strategic partnership.
Financial co-operation is at the core of BRICS co-operation. Each BRICS country is at a critical stage of development and the economic connections among the five countries are getting increasingly closer, creating new demands for BRICS financial co-operation.
As an important financial form, development finance operates on market principles with the backing of sovereign credit, ensures principal safety and modest profitability, and upholds strategic planning and pluralistic financial services, so as to promote the BRICS financial co-operation with more vigour, order and efficacy to deliver greater achievements.
China Development Bank (CDB) is a Chinese development finance institution and also the largest outbound investment and financing co-operation bank in China.
For years, we actively implemented the concept of “building a community of common destiny for all mankind” proposed by Chinese President Xi Jinping and made full use of development finance to support BRICS cooperation and development.
We initiated a BRICS interbank co-operation mechanism, which provides member banks with a platform to actively carry out multilateral or bilateral financial co-operation and plays an important role in promoting the economic development and trade co-operation of BRICS countries.
During the Xiamen Summit in 2017, we signed the Interbank Local Currency Credit Line Agreement Under BRICS Interbank Co-operation Mechanism and the Co-operation Memorandum Relating to Credit Ratings Under BRICS Interbank Co-operation Mechanism with member banks, including the South African Development Bank, which further deepened the interbank financial and monetary co-operation among BRICS countries and therefore enhanced the practical co-operation of BRICS.
By the end of May 2018, CDB’s loan balance in BRICS countries had reached $110 billion (R1.47 trillion), accounting for 40 percent of the bank’s total international loans, covering areas including ports, highways, industrial parks, power stations, energy resources, small and medium enterprises, people’s livelihoods, etc.
South Africa is an important member of BRICS and also a priority for CDB’s international operations. Up to now, CDB has provided a total of $6.5bn medium- and long-term loans to South Africa, in areas of electricity, manufacturing, resource development, telecommunication, roads, airlines, ports, urban utilities and people’s livelihoods, supporting projects such as Transnet’s purchasing locomotives from CRRC Corporation, and the Eskom coalfired power station, etc.
In addition, CDB has invested $680 million in South Africa through China Africa Development Fund, leveraging investment of more than $3.4bn from Chinese enterprises.
Furthermore, we lent a total of $2bn through African SME Loans to African countries, including South Africa, which created 88 000 jobs and benefits 470 000 farmers.
Currently, BRICS has become an important platform for communication and co-operation between emerging markets and developing countries with a broad prospect for development. The “BRICS+” model proposed by China will attract more emerging markets and developing countries to participate in the BRICS mechanism, promote a broader partnership and expand BRICS’ “circle of friends”.
The Belt and Road Initiative will improve the international market environment, including BRICS countries, and conform to the interests of all countries and bring new opportunities for the co-operation of BRICS countries.
CDB is willing to work together with all parties to carry out broader, deeper and more practical co-operation to make new contributions to the common prosperity and development of BRICS countries.
Development finance operates on market principles with the backing of sovereign credit, ensures principal safety and modest profitability.