The Economic Colossus built with BRICS
The trade ministers of the five BRICS nations (Brazil, Russia, India, China and South Africa) met this week in Shanghai, ahead of the annual summit of heads of state in Xiamen next month.
Trouble looms across the board. China and India are immersed in a silly, almost Monty Pythonesque face-off in the Tibet/Sikkim/Bhutan tri-junction, with People’s Daily blasting India for “wrong history”, “disordered logic”, and “blind moral confidence”.
India has de facto been snubbing China’s New Silk Roads, aka Belt and Road Initiative – the most ambitious infrastructure project of the 21stcentury – while Russia wants BRI firmly connected to the Eurasian Economic Union (EEU).
Brazil, hostage to a House of Rats and “presided” over by a Dracula-esque crook rejected by 95% of the population, has been reverse-engineered since last year into the most blatant banana republic of modern history, tasty bananas included.
Adding to the gloom, the proverbial Cassandras insist BRICS will never become a united powerhouse; what matters for China is its complex global supply chain, while the other BRICS are in essence commodities exporters. Moreover, even when considering the group’s New Development Bank, launched in Shanghai two years ago as an alternative to the World Bank, BRICS isn’t credited with enough power to revamp the global economy.
Chinese Commerce Minister Zhong Shan
attending a BRICS trade meeting in Shanghai on August 2, 2017
All about BRI
Since 2001, BRICS in fact adopted a slow and steady path of progress, while eschewing a reductionist “winner takes all” mentality. The latest example is what happened this week in Shanghai, which Chinese Commerce Minister Zhong Shan hailed as a “great success”.
Trade ministers concentrated on creating the conditions for better cooperation in investment, service trade, e-commerce and intellectual-property-rights protection – aiming at progressively coordinating their trade policies.
China and Brazil, for instance, already key partners in infrastructure, energy and telecommunication, signed a memorandum of understanding to improve service trade in eight areas: engineering, architecture, e-commerce, banking automation, shipping, healthcare, finance, smart-city development and tourism. This MoU will be the framework for other BRICS nations to be engaged in service trade cooperation.
It also helps that Beijing is bound to open the Chinese market further to BRICS imports – and that President Xi Jinping himself is involved in a campaign against trade protectionism. In the past six months, China’s imports from BRICS went up 33% year on year. And China will host an international imports exhibition next year in Shanghai.
It was up to minister Zhong to come up with the clincher: “We hope that BRICS countries can further expand their cooperation with economies related to the Belt and Road Initiative. This will help to better meet the challenges brought by the uncertainties of the global economy and generate new growth momentum.”
Yes, it’s all about BRI
What the proverbial Cassandras don’t understand is that the BRICS group aims to work with a different template, as an “aggregating platform”, something that is being discussed at the highest levels, especially in the framework of the Russia-China strategic partnership.
Each BRICS member is indeed a leading economy in its continent or subregion, within a regional integration arrangement: Russia in the EEU; Brazil in Mercosur; South Africa in the South African Development Community (SADC); India in the South Asian Association for Regional Cooperation (SAARC); and China in the Shanghai Cooperation Organization (SCO) and the prospective Regional Comprehensive Economic Partnership (RCEP). Not to mention that Russia and India are also SCO members.
Thus the notion, enthusiastically backed by China, of a BRICS+ – an inevitable expansion uniting all countries that are BRICS partners in regional integration frameworks.
Then there’s what has been extensively discussed behind closed doors in BRICS summits since the previous decade: the increasing leverage, especially by China, at least to deal serious blows to the petrodollar.
Add to that the Russian commitment, after the latest declaration of war/sanctions package concocted by the House of Cards, sorry, Capitol Hill, increasingly to bypass the US dollar.
And that will be the day when Beijing will demand, globally, that energy sales be denominated not in US dollars but in yuan – as BRICS+ will have been, for a while, trading among themselves with their own currencies. That’s where we’re heading, slowly but surely, and that’s the – inexorable – game-changer that will silence the Cassandras for good.
Source: Asia Times