BRICS Summit: The Largest Gathering of Emerging Markets, will it Revive the World Economy?

The 2017 BRICS Xiamen summit will kick off on Sept 3 in Xiamen, a coastal city in Fujian province, and run until Sept 5. The key theme of this year’s summit will be BRICS: Stronger Partnership for a Brighter Future. Leaders from the world’s largest emerging markets will come to Xiamen, and this will be the 11th anniversary of the formation of the BRICS cooperation mechanism.

Chinese President Xi Jinping will attend the opening ceremony of the BRICS Business Forum and deliver a keynote speech, reviewing the progress that the BRICS countries – Brazil, Russia, India, China and South Africa – have made in the past 10 years, and looking to the future. During the summit, Xi will preside over the Dialogue between Emerging Market Economies and Developing Countries.

The upcoming summit is expected to pave the way for more practical cooperation among emerging markets and developing countries, aiming to inject impetus into the global economic recovery.

Then, what are the particular points of interest and what should be our expectations from this summit?

Is the Mechanism Working?

The BRICS nations have a long-agreed consensus on the need to unite and forge a community of common economies and common destiny. According to data from the Ministry of Commerce, the overall contribution of the BRICS nations to the global economy has rocketed from 12% to 23% in the past ten years. Within this overall figure, total trade volume rose from 11% to 16%, and foreign investment climbed from 7% to 12%.

The international trade of the BRICS nations has grown at an average of 28%, 10% higher than the world average. The contribution of BRICS to world economic growth has reached almost 50%.

Trade and investment are two key drivers of the economic growth of BRICS. The unique natural resources and complementary strengths possessed by the BRICS nations offer the grouping a promising future for further cooperation in trade and economic activity.

The world economic recovery is still weak, and there is a growing trend of opposition to globalization. Confronted with this challenging and complex external environment, the BRICS nations should work together even more closely to proactively promote reform of global economic governance, and to strengthen the power and voice of emerging markets and developing countries.

At the press conference on the eve of the Xiamen meeting Andrei Denisov, Russia’s ambassador to China, stated that Russia has benefited a great deal in the last decade from cooperation under the framework of BRICS. In the arena of international politics, the collaboration practiced among the BRICS nations has given Russia greater support and allowed them to present their position with more confidence.

In terms of the economy, BRICS has achieved more quantifiable goals – the BRICS New Development Bank, the Contingency Agreement Fund and the BRICS Customs Cooperation Committee have all been established through the joint effort of the five BRICS member nations, Mr. Denisov added.

In 2016, the New Development Bank allocated 1.5 billion US dollars to 7 projects, one of which was proposed by Russia, said Mr. Denisov. He also expressed the hope that Russia can benefit from the mechanism in other ways in the future.

More Cooperation Potentials

The BRICS summit has attracted widespread attention from all walks of life, including academic circles. Think tanks and various institutes have held a range of seminars to analyze the problems and challenges we face, and how this mechanism might address them.

In the view of Chen Wenling, the chief economist of the China Center for International Economic Exchanges (CCIEE), the BRICS nations are moving forward in both politics and economic influence; they not only operate as an economic engine, but also forge a shield in defense of international peace. The general revival of the BRICS nations is a hard fact – they are becoming indispensable and vital elements of global economic governance. BRICS not only stands for a cooperation mechanism of five countries, it also represents the rise of all the emerging economic entities and developing countries.

Liu Youfa, the senior researcher of Pangoal Institution and the former consul-general of China in Mumbai, India, suggested that after ten years’ of cooperation, BRICS should layout a blueprint for its development in the next decade. A platform for future cooperation should be established and stronger growth in trade and investment can also be expected. Technological, cultural and ideological cooperation will be future strong points.

Constantly Expanding Network of BRICS

The concept of “BRICS Plus” is now gaining more popularity.

On August 30, 2017, when responding to questions from the media, Foreign Minister Wang Yi noted that this year China has prepared a summary of its previous successful practices and proposed the “BRICS Plus” arrangement, which has quickly gained widespread support among many emerging markets and developing countries.

The idea of “BRICS Plus” is “openness, inclusiveness, cooperation and mutual benefit”, which is very much consistent with the BRICS spirit. Wang Yi said that BRICS is not a locked club and the influence of BRICS cooperation goes far beyond the borders of the five countries. “The BRICS mechanism has become an important platform for emerging markets and developing countries to strengthen solidarity and cooperation and to safeguard common interests,” he said. “It has also played an increasingly important role in promoting international peace and development.”

The purpose of “BRICS Plus” is to strengthen dialogue and cooperation between BRICS countries and other emerging markets and developing countries, promote the establishment of broader partnerships, and facilitate common development and prosperity on a larger scale.

Mr. Denisov also shared his view on “BRICS Plus” model by pointing out that any forum or mechanism will be attractive only when it is beneficial to its participants, and BRICS is one such. BRICS does not force any country to participate, but it still attracts attention from a growing number of countries as it moves towards becoming a global cooperation mechanism.

Once the idea of “BRICS Plus” was raised, it quickly gained popularity in other emerging markets and developing countries, and has evoked a lively discussion in the academic community.

He Weiwen, senior researcher of the Center For China and Globalization (CCG), suggested that the “BRICS Plus” model can maximize its impact by binding all its participants together to jointly tackle key economic and political problems like security and climate change. BRICS can also work with the Asian Infrastructure Investment Bank (AIIB) and the Belt and Road Initiative and become a vital force to propel them forward.

Shi Yinhong, professor of the School of International Studies, Renmin University of China, listed several benefits to be anticipated from a proportionate expansion of the BRICS membership: first, it adds potential power to BRICS; second, it adds to the flexibility of BRICS; third, it offers further opportunities to reach agreement and will therefore expand BRICS influence in the world.

The “BRICS Plus” pattern will fully release the vitality of BRICS cooperation. It is expected that continually expand the influence of BRICS cooperation, revive the world economic growth, improving global governance and promoting democracy in international relations.

Source: Foreign Ministry’s press conference; Seminars of Center for China and Globalization (CCG), Chongyang Institute for Financial Studies and the Pangoal Institution