BRICS gets more byte
- By Zhou Xiaoyan
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E-mail Beijing Review, September 3, 2017
Against the headwind
Over the past 10 years, BRICS has evolved from an investment concept to a model of cooperation between developing countries. Their share in global trade has climbed from 11 to 16 percent and that in global outbound investment has risen from 7 to 12 percent. The bloc contributed 50 percent to global growth last year.
However, all BRICS countries face economic challenges on various fronts. According to IMF data, the Indian economy expanded 6.8 percent in 2016, falling short of market expectations. South Africa witnessed a meager 0.3 percent annual growth the same year; Brazil's economy contracted 3.3 percent; the Russian economy shrank 0.2 percent amid fluctuations in bulk commodity prices and sanctions imposed by the West.
China, whose economy expanded 6.7 percent in 2016, also faces the tough task of economic restructuring, with traditional competitive advantages such as low labor and land costs dwindling, as well as new economic factors not being fully explored yet.
According to Bai, the steep fluctuation of bulk commodity prices in recent years hurts raw material-exporting countries in BRICS as well as importing countries like China. So a long-term, more stable relationship between exporting and importing countries is needed to achieve more balanced development for everyone in the group.
"BRICS members need to do more to complement each other's weaknesses," Bai said. "For instance, China is a manufacturing powerhouse. If Chinese businesses carry out capacity cooperation with other BRICS countries to create local jobs and increase the added value of raw materials from those countries, we can establish an industrial chain in BRICS. When we participate in global distribution of labor, we can stop relying only on developed countries. With our own distribution of labor and our own industrial chain, we can reduce reliance on developed countries and increase economic security."
Against the backdrop of rising protectionism, strengthening cooperation will help further increase BRICS member nations' voice in the global economy, Bai said. "They should aim to raise a collective voice in economic globalization and global governance on behalf of developing countries." Bai added.
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