‘BRICS of Gold’ Continues to Shine

Facing both opportunities and challenges， China will join hands with other BRICS countries to enhance cooperation and better contribute to global growth

With fruitful outcomes yielded after 10 years of hard effort， BRICS countries （Brazil， Russia， India， China and South Africa） are now standing ready to embrace their second decade of cooperation.

Together， BRICS countries account for 30 percent of global land area and 44 percent of the world’s population. Over the past decade， BRICS’ economic aggregate has soared from 12 percent of the global total to 23 percent， its share in international trade has increased from 11 to 16 percent， overseas investment originating from the emerging-market bloc has risen from 7 to 12 percent and the contribution it has made to global economic growth has exceeded 50 percent. The bloc is thus considered a major engine driving global economic growth. It has witnessed a “golden decade” since its birth.

In recent years， however， due to sluggish global economic recovery and a grim trade outlook， a lingering slowdown and even depression has begun to haunt BRICS economies. While Russia， Brazil and South Africa have endured their respective economic problems， China and India are also faced with complex challenges to address. Some media suggest that “the BRICS of gold are seeing a fading shine.” Will the “BRICS of gold” continue to glitter in a second decade？ The world is watching.

In early September， global attention will be focused on Xiamen， a beautiful coastal city in southeastern China’s Fujian Province. Xiamen will host the 9th BRICS Summit as China holds the rotating chair of the bloc.

This July， when presiding over an informal BRICS leaders’ meeting ahead of a G20 summit in Hamburg， Germany， Chinese President Xi Jinping expressed his sincere hope to， centering on the theme of “deepening the BRICS partnership and opening up a brighter future”， work with other BRICS leaders to push the Xiamen Summit for fruitful outcomes， so as to inject fresh impetus into BRICS cooperation， offer new solutions on improving global governance， and make new contributions to advancing global economic growth.

Since the first BRICS foreign ministers’ meeting took place in 2006， the five emerging economies have worked together to bring benefits to not just their own people， but also the world as a whole. The forthcoming Xiamen Summit is expected to usher in the second golden decade for BRICS cooperation.

Mutual Benefit and Common Prosperity

“Xiamen is my home away from home， where I started my career and found my love，” said Marcos Caldeira， a young Brazilian businessman who has relocated to the Chinese city. “I have witnessed so many happy events this year， and to me， the BRICS Summit is another one to celebrate.”

Caldeira came to Xiamen from Vitoria in eastern Brazil more than two years ago to learn the Chinese language. In the meantime， he started his own business for exporting Chinese stone products to Brazil and other countries in the Americas.

“Brazil is the largest South American country with huge demand for stone products， but its domestic stone market is traditionally dominated by natural stone， usually at high prices，” said the businessman. “China’s artificial stone is now gaining growing popularity in Brazil for its good quality and affordable prices.”

Thanks to his business savvy， considerable market potential and unimpeded trade among BRICS members， Caldeira has become one of the leading traders exporting Chinese marble to Brazil. In addition to business success， Caldeira has also found love in China.

“Developed economies try to stay invincible in the face of fierce market competition， while market potential for developing countries remains largely untapped，” said Liu Yi， who has engaged in international trade in Johannesburg， South Africa， for many years. “South Africa is one of the countries with the greatest trade opportunities. Here， Chinese commodities are very popular among consumers， and businesses enjoy a favorable trade environment that radiates to Zimbabwe， Namibia， Mozambique and other countries in southern Africa.” According to China’s Ministry of Commerce， China has become a leading trade partner of South Africa. In the first four months of this year， bilateral trade between the two countries amounted to US$7.19 billion， a year-on-year increase of 17.9 percent.

Caldeira and Liu are just two of the many people doing business among BRICS countries， who share the view that emerging markets have untapped market segments and great potential for growth. Increasing numbers of people in BRICS countries have chosen to study， work and pursue their dreams in their peer countries.

Emerging Markets

Under the BRICS cooperation mechanism， many Chinese enterprises have begun to actively seek opportunities in other member states from which they would further expand business to developed markets.

As early as 2011， the Fujian-based Fuyao Glass Industry Group， China’s largest automotive glass maker， invested US$200 million to establish its first and so far only overseas factory in Kaluga， Russia. Ninety percent of the factory’s employees are locals， and the factory itself produces 1.2 million pieces of tempered glass and laminated glass a year.

“Our global expansion began in Russia before we set up factories in America and Europe， which has made us the world’s largest auto glass producer，” said Cao Dewang， chairman and chief executive of Fuyao Group.

China and India are both emerging developing countries with large populations and broad mass consumption markets. Thanks to China’s reform and opening-up policies that have been implemented over the past several decades， it is more developed than India in terms of electronic products manufacturing. At present， Chinese brands including Vivo， OPPO， Lenovo， Xiaomi and Huawei occupy almost half of India’s mobile phone market， enjoying great popularity for their excellent functionality and localized marketing approaches. Four of the top five players in India’s mobile phone market are Chinese brands.

About two years ago， the New Development Bank （NDB） of BRICS， the world’s first multilateral development bank to be independently established by emerging markets， started business in Lujiazui， Shanghai’s financial hub. From the completion of its feasibility argumentation in 2013 to the signing of agenda in 2014， official launch in 2015 and the issuance of its first loan in 2016， the NDB has drawn worldwide attention. In 2016 alone， the bank approved seven projects from its five member states， amounting to US$1.5 billion. This year， 10-15 projects are expected to be endorsed to provide financial support for green energy and infrastructure construction in BRICS countries.

On Aug. 1， as a major preparatory session for the leaders’ summit in Xiamen， the 7th Meeting of the BRICS Trade Ministers was held in Shanghai by China’s Ministry of Commerce. At the meeting， Chinese Minister of Commerce Zhong Shan stressed that since the BRICS cooperation mechanism was established in 2006， BRICS countries have created a paradigm for mutually beneficial cooperation among emerging and developing countries， playing an increasingly significant role in driving the global economy and governance.

Exploring New Impetus

Early in 2014， when the 6th BRICS Summit was held in Fortaleza， Brazil， Chinese President Xi Jinping proposed the establishment of a closer and more solid partnership among BRICS countries and the construction of an integrated market in areas of trade and investment. Inspired by Xi’s proposal， all five nations have made progress in trade and investment facilitation， the services trade， e-commerce and other fields， based on which the Strategy for BRICS Economic Partnership and a series of other cooperation frameworks have been formulated. In the first half of this year， despite persistent risks in a faltering global economic recovery， the BRICS has remained a powerful engine for global economic growth.

At the 7th Meeting of the BRICS Trade Ministers， guests from Brazil， India， Russia and South Africa shared their views on future development of bilateral ties between their respective markets and China. Russia proposed an expansion of Sino-Russian trade， as well as carrying out joint research and development in industry and biotechnology and promoting cooperation among small and medium enterprises. The South African government thinks highly of bilateral cooperation in auto-making and infrastructure construction. Brazil expressed anticipation for new progress in trade facilitation.

As part of the multiple areas of consensus reached by the ministers at the meeting， the BRICS Trade in Services Cooperation Roadmap is aimed at improving the countries’ services trade by conducting cooperation in pilot fields such as tourism， public health， commercial services， construction services， education and medical services. According to Zhang Shaogang， director-general of the Department of International Trade and Economic Affairs at China’s Ministry of Commerce， BRICS countries contribute nearly one-quarter of global economic output， but in contrast， their trade in services lags far behind， which implies tremendous potential for services trade cooperation among BRICS countries.

Cooperation potential in the field of investment among BRICS countries is equally intriguing. “Outward BRICS investment reached US$197 billion in 2016， but investment between the five nations accounted for only 6 percent， which indicates great potential to tap into intra-BRICS investment，” Zhong added.

Ruan Zongze， executive vice president of the China Institute of International Studies， pointed out that as the BRICS enters its second decade， it should play an even more vital role in the establishment of a new international economic order apart from its efforts in improving economic and trade cooperation and seeking a new path of development. As the largest developing country in the world and the holder of the BRICS chairmanship this year， China is well-prepared to deepen partnerships among BRICS countries， build new platforms and inject new impetus into BRICS cooperation， aiming to allow the “BRICS of gold” to shine with even more luster. This doesn’t simply reflect the expectations of the international community， but something that China views as its own responsibility.