China Daily Global Edition (USA)
China’s success can provide positive signal
Economist who coined ‘BRIC’ acronym stresses importance of common policies with a shared interest
Economist Jim O’Neill, who created the “BRIC” acronym, said China primarily remains the most important economy in the world, leading the economic growth in the five BRICS countries to contribute more than 20 percent of the world’s GDP.
“Even though its growth rates have fallen to around 6.5 to 7 percent, in nominal dollar terms, China is still adding the equivalent of a whole new Switzerland or Turkey every year to the world,” O’Neill said in an interview with China Daily ahead of the summit of the group. “Or a new UK economy every three years.”
It was the former Goldman Sachs chief economist who coined the term in 2001, grouping together four states — China, Brazil, Russia and India — as potential growth powerhouses of the future. Now the group also includes South Africa.
China’s economy continued its steady expansion in the first half of the year, with GDP up by 6.9 percent to about 38.2 trillion yuan ($5.6 trillion), according to the National Bureau of Statistics.
O’Neill said China’s development can be an example to other developing countries, especially in the area of attracting foreign direct investment.
“Most of the world’s largest companies have played an important role in helping China’s development, and it is to the government’s credit,” he said. “Other BRICS countries should take note.”
O’Neill said Brazil’s and Russia’s emergence from recession is another key contributor to the global economy staying strong in 2017.
The recovery of these two, along with the eurozone, is probably the main reason why growth is stronger than for many years, said O’Neill, who forecasts global GDP growth in the first half of this year close to 4 percent.
He encourages China, Brazil, Russia and India to move beyond symbolism and agree on some common policies with a shared interest.
Although he said the BRICS group is less likely to achieve anything alone in terms of world governance due to the exclusion of the world’s most important advanced countries, the former UK Treasury minister sees disease prevention as one potential area in which BRICS countries could take a collective position.
“I strongly encourage the BRICS leaders to be bolder in this area,” O’Neill said. “It is surprising to me that they have not gone down this path. But if they did, it would be impressive and send a very large positive signal.”
O’Neill, however, concedes it is not easy for the BRICS countries to coordinate between themselves to achieve stronger collective growth without ambitious plans for a free trade zone with no tariffs.