Expanding
After BRICS, exploring a BRICS+ model By Lu Yan
Four television screens showed the same short video: a girl doing gymnastic splits exultantly in a squeaky new subway train. It was shown by Yu Weiping, Vice President of CRRC Corp., China’s largest rail transportation equipment maker, to an international audience at a discussion session at the BRICS Seminar on Governance in Quanzhou, southeast China’s Fujian Province, on August 18, to press home a point.
“That subway runs so efficiently that the girl couldn’t help making that gesture [of pure joy],” Yu explained. It was a Swedish girl having fun in Rio de Janeiro, Brazil, during the 2016 Summer Olympics. “It has been built by CRRC. There were zero breakdowns on that line during the entire Rio Olympics, which won the applause of Olympic fans worldwide.”
CRRC, which exports rail transport equipment to 101 countries and regions, is focusing, like so many large Chinese enterprises, on deepening partnerships in the other four BRICS countries—Brazil, Russia, India and South Africa.
Partnerships in progress
In India, for example, where CRRC has been supplying subway trains, locomotive engines and other railway vehicles and parts since 2007, it launched a joint venture (JV), CRRC Pioneer (India) Electric Co., to begin manufacturing in India for the first time. The JV began operations in 2016, two years after Prime Minister Narendra Modi launched his “Make in India” initiative. CRRC holds 51 percent of the stakes in the JV, which has a total investment of $63.4 million.
The trade between China and India exceeded $70 billion in 2016, according to a report released by the Embassy of India in China in February.
Yu said BRICS countries enjoy four advantages: huge markets, huge regional influence, well-developed industries and skilled technical teams. CRRC is also partnering with South African companies to export products to neighboring countries in Africa.
Not only large state-owned enterprises like CRRC, but private companies are also seeking cooperation opportunities in the bloc.
Lin Xiaofa, Chairman of the JOMOO Group, which makes kitchen and bathroom products for intelligent homes, said his company has been establishing partnerships in BRICS countries since 2012. “We can use our China business model as a reference when we do business in those countries,” he said.
The gains are mutual. For instance, according to statistics from Brazil’s Ministry of Agriculture, Livestock and Supply, China’s agro-imports from Brazil reached $20.83 billion in 2016, accounting for 24.5 percent of Brazil’s total exports, up 0.4 percent over the previous year. Beans, chicken, sugar and beef were the main items.
However, there are challenges facing BRICS, such as the weak external demand as the world economy remains in a period of recovery and deep adjustment. Besides, investment relations among BRICS are not as close as among regional groups such as the Asia-Pacific Economic Cooperation. Also, their business environment needs to be improved, given policy restrictions in areas such as market access, taxation and visa issuance, according to the 2017 BRICS Sustainable Development Report published by China Development Bank’s Financial Research and Development Center and the China Council for BRICS Think Tank Cooperation.
“I think there will be efforts and announcements in Xiamen for further economic integration among BRICS countries,” Srikanth Kondapalli, professor in Chinese studies at the Jawaharlal Nehru University in New Delhi, told Beijing Review.
Looking for solutions
Since the BRICS group of five emerging