Chinese President Xi Jinping pledged this week to help advance four economic powers, despite pandemic problems at home and knock-on effects from Russia’s war in Ukraine. Analysts expect the pledges to take time, with no immediate results.
Xi made his remarks Thursday at the virtual BRICS Summit hosted by Beijing.
The other countries are Brazil, Russia, India and South Africa, which together with China make up the grouping known as BRICS. These large emerging economies see themselves as an alternative to the U.S.-led world order.
The leader of China advocated BRICS cooperation in cross-border payments and credit ratings, the official Xinhua News Agency in Beijing reported Thursday. The report says he further recommended “facilitation” of trade, investment and financing.
Xi as host of the group’s 14th summit said he would work with the BRICS countries to support global development that is “stronger, greener and healthier,” Xinhua added.
The leader urged more countries to join the New Development Bank, a concessional lender founded by BRICS countries in 2015. He called, too, for improving the group’s emergency balance-of-payments relief mechanism, the Contingent Reserve Arrangement, Xinhua added.
View toward future deals
Substantive progress on these goals will likely take time, analysts say, as the member countries do not always get along with one another and China’s ambitions may take time to evolve given issues at home and abroad.
“At the highest level, there’s a little bit of a discussion, then that may lead to further opportunities to be further engaged down the road,” said Song Seng Wun, a Singapore-based economist in the private banking unit of Malaysian bank CIMB.
China’s economy has outgrown the others after decades of export manufacturing for much of the world. But the keeper of a $17.5 trillion GDP has teetered this year amid lockdowns to contain a COVID-19 surge — which snarled world supply chains originating in China.
BRICS member Russia faces economic sanctions from the West over its war in Ukraine, which has sparked food shortages and inflation. China still faces tariffs on goods shipped to the United States, fallout from a bilateral trade dispute.
India and China have their own differences. The world’s two most populous countries contest sovereignty over mountain territories between them, and China bristles at India’s geopolitical cooperation with the West.
Developing countries, including those among the BRICS, can easily turn to Japan, the European Union and other alternatives to China for economic support, said Stuart Orr, School of Business head at Melbourne Institute of Technology in Australia. Those choices will slow China’s ambitions to sow BRICS cooperation as developing states prefer not to over-rely on Beijing, he said.
“There’s a lot of talk but probably not so much real progress in that regard and I suspect things will probably end up sort of getting pushed back to the next BRICS meeting for further progress once the dust has settled,” Orr said.
China still “struggles with health issues” while its historic political rival the United States is finding new suppliers and customers for soy exports, Orr said.
Officials in Beijing want to expand cooperation with other countries as the United States sanctions Russia over the war and China over trade, said Huang Kwei-bo, associate professor of diplomacy at National Chengchi University in Taipei.
The BRICS countries might reassure one another over energy and food shortages linked to the war, Song said. Later, he said, they could “flesh out” substantive agreements.
China regularly offers economic aid, investments and COVID-19 vaccines to friendly developing countries from Africa into Central Asia. Its flagship is the Belt and Road Initiative, a 9-year-old, $1.2 trillion list of foreign infrastructure projects aimed at opening China-linked trade routes.
Chinese officials feel the BRICS nations will welcome their support, and in turn, accept some of their political views, analysts say. Of the BRICS states, only Brazil voted against Russia’s invasion of Ukraine at the United Nations earlier this year. China, India and South Africa abstained.
India, despite its West-leaning political activity and reservations about China’s Belt-and-Road, still takes Russian oil.
“India-China relations are very sensitive, but outside these existing relations, like in the Caribbean and Latin America, those spots are where India and China wouldn’t have clashes of interest,” Huang said.
Brazil in particular is looking for more international support to overcome the “devastating impacts” of COVID-19 in the country, Orr said.
“There should be some other countries that would think about joining this kind of regime,” Huang said. “Then, if a lot of those countries don’t have such good relations with the U.S. side, doesn’t that mean it’s one more thing causing a headache for the United States in terms of geopolitics?”
A declaration issued at the summit Thursday says the five countries support talking further about expanding their group.