BRICS has a China problem, and it is a bit concerning

TL;DR Breakdown

  • The BRICS alliance is facing an imbalance with China’s economic dominance overshadowing other members.
  • China’s assertive stance in foreign and military affairs due to its economic might poses issues for the consortium.
  • Strained relationships with India and Russia and rivalries with the U.S. are raising concerns.

Description

A keen observer of global diplomacy might have noticed an unusual absence at an upcoming international summit. This is not the first time that the BRICS assembly has seen such a situation, with Russia’s President, Vladimir Putin, choosing to bypass the meeting out of fear that the host country, South Africa, might act upon an … Read more

A keen observer of global diplomacy might have noticed an unusual absence at an upcoming international summit. This is not the first time that the BRICS assembly has seen such a situation, with Russia’s President, Vladimir Putin, choosing to bypass the meeting out of fear that the host country, South Africa, might act upon an international arrest warrant against him.

The implications of this hiccup might not run deep, but they highlight a much larger issue looming over the five-country alliance, where the role of China is increasingly becoming a source of disquiet.

An unbalanced alliance

BRICS, the political entity that sprouted from a mere marketing term coined by economists from Goldman Sachs, has steadily grown into a significant global consortium since its establishment in 2009.

It originally grouped together Brazil, Russia, India, and China, later adding South Africa to its roster. But as BRICS grew in size, so did the inequality within it, as China’s economic prowess overshadowed that of the other members.

The alliance was forged during a propitious convergence of economic shifts during the late ’90s and 2000s.

China capitalized on economic reforms to spearhead its low-cost manufacturing sector, while Russia and Brazil climbed out of economic turmoil and hitched a ride on the commodities boom.

India saw a spurt of growth after economic liberalization due to a payments crisis, while South Africa prospered following the end of apartheid.

But as the dust settled, it became evident that China was the only country that had truly bridged the gap towards developed-world status.

The country embraced technological innovations to transform into a knowledge-based economy, while the other BRICS nations remained tethered to their low-growth models and resource-dependent economies, plagued by varying degrees of political dysfunction and corruption.

China’s ascendancy in BRICS: A double-edged sword

China’s economic might now contests that of the United States. The size and affluence of China’s economy afford it an assertive stance in foreign and military affairs, leaving other BRICS members in its shadow.

Proposals for a common BRICS currency have floundered, with the Chinese renminbi being the only viable international currency amongst the five nations.

The power disparity within BRICS is further underscored by China’s ambitious Belt and Road Initiative. While BRICS’ own New Development Bank has extended a modest $32.8 billion in loans, China has doled out nearly $1 trillion bilaterally, using the initiative to build infrastructures and foster trade and political alignment.

But China’s growing dominance has had its downsides. It has led to strained relationships with other BRICS members, particularly India due to historical military tensions, and Russia due to China’s leverage in the energy sector.

Moreover, China’s position as a strategic rival to the U.S. threatens to destabilize the group’s relationship with Washington and Brussels.

China’s proposition to expand the BRICS alliance was met with reluctance from existing members like Brazil. If nations indebted or beholden to China are accepted, BRICS risks transforming from an advocate for emerging economies to a mouthpiece for China’s hegemonic ambitions.

If BRICS decides to manage its affairs independently, the stark differences in economic trajectories and strategic interests may pull the alliance apart.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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