China’s BRICS game : Foreign Policy Watch

NEWS HIGHLIGHTS

Theme : International Relations
Paper : GS - 2

Jim O’Neill, a British economist, coined the term ‘BRIC’ to describe the four emerging economies of Brazil, Russia, India, and China. He made a case for BRIC on the basis of econometric analyses projecting that the four economies would individually and collectively occupy far greater economic space and become among the world’s largest economies.

TABLE OF CONTENT

1. Context
2. BRICS
3. BRICS For China
4. Important Links with Belt & Road Initiative
5. Why BRICS is needed to Promote BRI
6. India’s Concern
7. Road Ahead

Context : At the 14th Leaders’ Meeting of the BRICS, held virtually in June 2022, China dwelt on the issue of expanding the group beyond its five existing members to include more emerging economies. 

BRICS : 

• BRICS is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China and South Africa.
• Jim O’Neill, a British economist, coined the term ‘BRIC’ to describe the four emerging economies of Brazil, Russia, India, and China. He made a case for BRIC on the basis of econometric analyses projecting that the four economies would individually and collectively occupy far greater economic space and become among the world’s largest economies.
• The importance of BRICS is self-evident: It represents 42% of the world’s population, 30% of the land area, 24% of global GDP and 16% of international trade.
• The five BRICS countries are also members of G-20.

BRICS For China : 

• Strategy of multiple engagements: For China, it is the grand strategy that is the Belt and Road Initiative (BRI) that threads its many engagements: BRICS, the Shanghai Cooperation Organisation (SCO), the Association of SouthEast Asian Nations (ASEAN) where it is not directly a member, the Eurasian Economic Union, and the Regional Comprehensive Economic Partnership (RCEP).
• Projecting the connection between BRICS and BRI: BRICS as an entity, has not signed any memorandum of cooperation with the BRI, In Chinese strategic thinking, the BRI and BRICS are deeply connected.
• Repeated assertion by Xi Jinping: President Xi Jinping himself has harped on this notion in his speeches on multiple occasions, such as the 9th BRICS Business Forum in September 2017 and the 11th BRICS Leaders’ Meeting in November 2019. In his speech he stated that China would cooperate with other multilateral development institutions such as the BRICS New Development Bank to support BRI and jointly formulate guidelines to finance development projects. 

Important Links with Belt & Road Initiative : 

• Policy of Five connectivities: Chinese scholars are of the opinion that the “five connectivities'' in policy, infrastructure, trade, finance, and people-to-people constitute the common way forward for both the BRI and BRICS.
• Economic development strategy: China has been working towards strengthening the interconnection of economic development strategies of different states along the BRI, particularly the BRICS nations, aligning and integrating BRI and BRICS infrastructure projects, ensuring unimpeded trade, pursuing multiple forms of cooperation.
• China’s Silk Road Economic Belt and EEU: The most significant progress made so far by China in this regard has been the official docking between China’s Silk Road Economic Belt (the land part of the BRI) and the EEU (where Russia is the dominant player) in May 2015.
• Infrastructure models that China is emphasizing: A high-speed railway project from Moscow to Kazan is being constructed under this strategic cooperation, funded by the BRICS New Development Bank. This is the model that China wants to replicate with other BRICS nations as well. In December 2015, South Africa and China signed a memorandum of understanding on jointly promoting the construction of the “Silk Road Economic Belt” and the “21st Century Maritime Silk Road.”

Why is BRICS needed to Promote BRI ?

• To use resources effectively: To improve efficiency in the use of funds and other resources, China, it is argued, should shift from individually leading specific projects to constructing and leading various international institutions and exerting itself through institutional norms.
• Strategic alignment and ambition to lead: President Xi emphasized this as well at the ‘Belt and Road’ International Cooperation Summit Forum in May 2017, saying that the BRI “is not about starting from scratch and reinventing the wheel, but realizing strategic alignment and (reaping) complementary advantages (of various existing or new mechanisms).”
• Dominating the financial mechanism through BRI partnership: Chinese scholars point out that all the BRICS countries have already been made part of the Asian Infrastructure Investment Bank (AIIB), one of China’s key financing mechanisms for the BRI. Further, given China’s clear dominance in the New Development Bank (NDB), Contingency Reserve Fund (CRA), the AIIB, as well as Silk Road Fund, it is only imperative for it to use these institutions to incentivise more BRICS countries to participate in the BRI, and to lay the foundation of a global financial system for the Chinese currency (RMB) trade settlement.
• Creating an acceptable front: China is aware that the BRI has provoked extensive discussion around the world. It has been interpreted differently by different countries and has even drawn suspicion and caution in certain quarters. China is aware that to implement the BRI smoothly, it needs an additional front that is less controversial and more acceptable to the international community at large, and in particular, to developing countries.

India’s Concern : 

• Promoting priorities in contrast: China prioritizes the ‘BRICS + Asia’ cooperation mechanism – ‘BRICS + ASEAN’ on the one hand, and ‘BRICS + Bay of Bengal’ on the other, thereby integrating BRICS more closely with the Southeast Asian countries as well as with the Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC) and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) nations.
• Aligning with BIMSTEC to counter India’s resistance to BRI: The aligning with BIMSTEC is particularly aimed at countering India’s reticence to endorse the BRI, while seeking its cooperation through either coercion (i.e., using other member states of the said groupings as bargaining chips to pressure India to cooperate) or deception (i.e., temporarily ignoring the BRI banner).
• Using BRICS at its advantage: China wants to use the BRICS platform to establish links and influence policies of these key regional organizations, including the African Union in Africa, the Arab League in West Asia, the SCO in Central Asia, the South Asian Association for Regional Cooperation (SAARC) in South Asia, and ASEAN in Southeast Asia.
• Ambition to formulate the world order in its own way: It wants BRICS, especially the BRICS New Development Bank, to strengthen cooperation with the IMF, the World Bank, and the World Trade Organization. This will enable China, through BRICS, to strengthen its international leadership, play a bigger role in the formulation of international rules, and influence the overall global governance mechanism.

Road Ahead : India needs to accurately grasp the geopolitical shifts taking place within BRICS and deftly navigate the complex dynamics between the member states to safeguard its own interests within the grouping and avoid being drawn passively into China’s Great Game.

FAQs : 

1. What is BRICS ?

Answer : BRICS is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China and South Africa.

2. Who coined the term BRICS?

Answer : Jim O’Neill, a British economist, coined the term ‘BRIC’ to describe the four emerging economies of Brazil, Russia, India, and China. He made a case for BRIC on the basis of econometric analyses projecting that the four economies would individually and collectively occupy far greater economic space and become among the world’s largest economies.