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Monday, September 11, 2017, 11:36
Golden opportunities
By Karl Wilson in Sydney
Monday, September 11, 2017, 11:36 By Karl Wilson in Sydney

China summit ushers in the next decade of the BRICS grouping, with a call for a more ‘just and equitable’ world order

In the East China city of Xiamen on Sept 4, President Xi Jinping proudly declared that the ninth summit of the BRICS countries had opened the bloc’s second “Golden Decade”.

He urged leaders of the five BRICS nations — Brazil, Russia, India, China and South Africa — to “join hands” and usher in the second Golden Decade of BRICS cooperation and deliver greater benefits to the people of “our five countries and around the world”.

In the same speech, at the summit’s plenary session, Xi set the tone for the Sept 3-5 gathering on the coast of Fujian province when he said: “We need to make the international order more just and equitable.”

He said the BRICS countries should “speak with one voice” to jointly present their solutions to global problems, safeguard common interests and oppose the growing tide of protectionism.

Analysts agreed, adding that BRICS has given a new voice to the developing world.

Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong, said: “The one thing the BRICS have in common is that they are not rich or advanced economies.

“Together they present quite a solid voice on the world stage. You could say together they represent the voice of the developing world.

“While the G20 (the Group of 20 leading industrialized and emerging economies) has both rich and poor nations, it has reduced the relevance of the G7, leaving the way open for the BRICS.”

Kuijs said the fact that Xi and India’s Prime Minister Narendra Modi were able to talk about their “differences” was an “achievement” in itself.

However, he also voiced some concern about the ability of the BRICS nations to avoid becoming protectionist, and cited India as an example of where protectionist sentiment is strong.

Protectionism, free trade, security, mutual respect and cooperation in many fields including trade and development were central themes at the Xiamen summit, under the banner: Stronger Partnership for a Brighter Future.

This year China also adopted a “BRICS Plus” approach by inviting leaders from Egypt, Guinea, Mexico, Tajikistan and Thailand to attend the summit. 

The goal was for “a more broadly based partnership”, Foreign Minister Wang Yi said on Sept 6.

The summit produced an impressive joint declaration — the Xiamen Declaration. It was signed by Xi and all other BRICS leaders: Brazil’s President Michel Temer, Russian President Vladimir Putin, Modi and South Africa’s President Jacob Zuma.

Xi described it as the “new blueprint for strengthening BRICS partnerships and deepening practical cooperation”.

President Xi Jinping delivers the keynote speech at the Sept 3 opening of the BRICS Business Forum, part of the BRICS Summit, in the coastal city of Xiamen. (FENG YONGBIN / CHINA DAILY)

Wang Huiyao, president of the Center for China and Globalization, said the Xiamen Declaration sends a clear message that the BRICS nations believe in an open trade agenda.

“The BRICS nations have firmly rejected the protectionist position being taken by the US and fully support open trade. This is a very important message,” Wang said.

Rajiv Biswas, Asia-Pacific chief economist with consultancy IHS Markit, identified a number of positives that came from the summit. Some were in the areas of economic cooperation, such as the BRICS Action Agenda on Economic and Trade Cooperation and the BRICS Trade in Services Cooperation Roadmap. 

“An important focus of the ninth summit was to develop an action program of people-to-people exchanges among BRICS countries,” Biswas said. 

He said another important focus was the report on the BRICS-led New Development Bank (NDB) on its first year of operations, with total project loans of around US$3 billion having already been approved.

Biswas said the BRICS grouping, led by China, has “been a key driver for growth in world trade and investment flows over the past decade”.

“In the face of rising protectionism in some parts of the world, BRICS can champion new initiatives for trade liberalization and development cooperation to boost South-South trade and investment flows and strengthen economic cooperation for sustainable development,” he added.

Deeper cooperation

During his press briefing on Sept 5 at the end of the summit, Xi said BRICS leaders believe it is in their common interest to deepen political and security cooperation, and “this is also what the international community expects us to do”.

The Xiamen Declaration reflects the desire of all five nations to boost cooperation, foster a just and equitable global economic order, safeguard world peace and promote people-to-people exchanges.

It was “the overarching objective and our desire for peace, security, development and cooperation that brought us together 10 years ago”, the leaders said in the declaration. 

“BRICS countries have since traversed a remarkable journey together on their respective development paths tailored to their national circumstances, devoted to growing their economies and improving people’s livelihoods. 

“Our committed and concerted efforts have generated a momentum of all-dimensional and multi-layered cooperation fostered by the previous leaders’ summits. 

“Upholding development and multilateralism, we are working together for a more just, equitable, fair, democratic and representative international political and economic order,” they said.

Addressing the summit leaders earlier, Xi said that although the five countries have different “national conditions”, their pursuit of partnership and prosperity is shared, enabling them to go beyond disagreement and achieve mutual benefits.

Noting that only 5.7 percent of the BRICS countries’ total US$197 billion in outbound investment took place among the five countries last year, Xi said there remains huge potential for economic cooperation among the BRICS members.

The president pointed out that the “gold content” of BRICS has been rising constantly in recent years along with such measures as boosting services trade, facilitating investment, initiating e-commerce cooperation, and strengthening ties on innovation.

The five countries should increase cooperation in sectors such as trade and investment, monetary and financial areas, connectivity, sustainable development, innovation and industrial cooperation, Xi said.

“We should speak with one voice and jointly present our solutions to issues concerning international peace and development,” Xi said, adding that many pressing global challenges cannot be resolved effectively without the participation of BRICS countries.

“We hope that through our joint efforts, these activities will take place regularly and be institutionalized,” he said.

The Xiamen Declaration stressed greater trade and investment cooperation, including in services and e-commerce.

Financing development

The declaration also stressed the importance of enhancing BRICS financial cooperation “to better serve the real economy and meet the development needs of BRICS countries”.

The bloc agreed to “explore convergence of accounting standards” in bond issuance.

“We agree to promote the development of BRICS Local Currency Bond Markets and jointly establish a BRICS Local Currency Bond Fund, as a means of contribution to the capital sustainability of financing in BRICS countries, boosting the development of BRICS domestic and regional bond markets, including by increasing foreign private sector participation, and enhancing financial resilience of BRICS countries,” the group said in the declaration.

Founded in 2006, the bloc accounts for roughly 40 percent of the world’s population, more than 50 percent of world growth (driven mainly by China and India) and 23 percent of global GDP.

While some critics may have questioned the viability of the bloc, it has nevertheless managed to shift the global power balance toward the developing world, and has won a bigger say in global economic discussions at the International Monetary Fund and World Bank.

“There is enormous potential for cooperation in trade, investment, finance and infrastructure among the five countries,” Jiang Zengwei, head of the China Council for the Promotion of International Trade, told Xinhua News Agency.

Jiang cited factors including huge markets, rich natural resources, economic disparities, favorable policies and active businesses.

“Uncertainties and unstable factors exist, but opportunities outshine challenges,” he said.

The NDB, launched in Shanghai in July 2015, has become firmly established. On Aug 30, just before the Xiamen summit, the bank announced US$1.4 billion in new loans for sustainable development projects in China, India and Russia.

In his address to the summit, Xi urged members to “forge unity” and to “jointly advance solutions for international peace and development”.

“A partnership forged with the right approach defies geographical distance; it is thicker than glue and stronger than metal and stone,” Xi said, quoting an ancient Chinese proverb.

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