For China, BRICS Is a Means to an End

6 MINS READSep 2, 2017 | 12:57 GMT
The BRICS group -- made up of Brazil, Russia, India, China and later South Africa -- were envisioned as a gang of the world's up-and-comers.
(JIM BARBER/Shutterstock)

The BRICS group -- made up of Brazil, Russia, India, China and later South Africa -- were envisioned as a gang of the world's up-and-comers.

It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.

Over the years, the group of countries known as BRICS has seen its members' relationships develop and mutate with the shifting geopolitical climate. When a Goldman Sachs analyst came up with the premise of BRICS in 2001, he saw the group — made up of Brazil, Russia, India, China and later South Africa — as a gang of the world's up-and-comers. These were countries, he reckoned, that it would be smart to invest in. After receiving the BRICS title, representatives from these nations went to town, organizing annual meetings and developing their own institutions. From the perspective of BRICS members, the best way to force themselves into the global governance conversation was by presenting a united front.

But today, the BRICS group is being driven increasingly by China, now the world's second largest economy. When the country's thriving east coast city of Xiamen hosts the annual BRICS summit on Sept. 3, the event will not only be of personal significance to Chinese president Xi Jinping, who was once Xiamen's mayor, but also an opportunity for China to expand its global influence. And while Beijing's economic heft will give it plenty of power to direct the course of this year's meeting, there is another major BRICS player that is not so keen to let China have its way entirely.

Looking Out For Number One

The economic links between the BRICS members are not of equal strength: Brazil, Russia, India and South Africa are all much more closely tied to China than they are to one another. And the way that each member will engage with this year's annual meeting can be traced to what it hopes to get out of China.

In this regard, Brazil and South Africa share similar ambitions. Both are struggling with economic slowdowns and see the meeting as an opportunity to garner investment from China as well as from the BRICS' New Development Bank (NDB), which was designed as a counterpart to the World Bank. Indeed, Brazilian President Michel Temer arrived in China several days before this year's summit in order to grease some wheels ahead of negotiations. He brought a new privatization plan to present to prospective Chinese investors, as well as a desire to strengthen the NDB to get more money flowing from it. Meanwhile, South Africa has also maintained strong support for the BRICS bank, as part of its larger goal of diversifying so it can rely less on Western-backed organizations.

For its part, Russia has become an increasingly enthusiastic partner to China across multiple fronts, as relations with Western nations sour and as Moscow's global economic growth potential increasingly shifts toward Asia. Russia is currently building infrastructure to divert energy exports east. Meanwhile, trade with China is up 30 percent so far this year. Beijing and Moscow are further cooperating in areas such as security, intelligence and cyber-security, and in October they are expected to sign a joint space exploration agreement. Finally, the two are conveniently in lock-step on many foreign policy fronts, including dealings with North Korea and the United States. Ultimately, Russia sees China, and BRICS as a whole, as a way to show the developed world that it is not isolated.

Clashing Powers

If BRICS was a four-member group consisting of China, Brazil, South Africa and Russia, it would likely have little in the way of disagreement. But India, which has also seen major economic growth in recent years, is increasingly disrupting the party, at least as China sees it. After last year's meeting, India emerged frustrated with Russia and China's refusal to endorse its anti-terrorist message, largely aimed at Indian rival Pakistan. 

And during the past year these tensions have grown, particularly with China, which has further strengthened its ties to Pakistan.

In May, India skipped the summit for China's Belt and Road Initiative, which plans to build economic infrastructure in Pakistan. Then, India and Japan began working on a competing project, known as the Asia-Africa Growth Corridor. Issues between Beijing and New Delhi came to a head in June, when Indian and Chinese troops began a military standoff on a remote Himalayan plateau. After almost three months, the conflict came to an end on Aug. 28. But the last twelve months have certainly been the rockiest for Sino-Indian relations in at least five decades.

China's Big Plans

When considering China's wider global strategy, tension with India presents a complication. No longer just an up-and-comer, Beijing is now trying to establish itself on the world stage as a worthy rival to Washington and as a potential leader of a new global order. With this goal in its sights, China has launched several major initiatives, including its flagship Belt and Road project. For President Xi, China's own international development bank, known as the Asian Infrastructure and Investment Bank, is a much higher priority than the NDB; it boasts a whopping 56 members, including global heavyweights such as the United Kingdom, Germany and France.

Meanwhile, China is also trying to present itself as a supporter of free trade following the United States' withdrawal from the Trans-Pacific Partnership, a multilateral trade deal it crafted in part to contain Chinese influence. Beijing views the U.S. departure as an opportunity to expedite the launch of its own mega-bloc, the Regional Comprehensive Economic Partnership (RCEP), which it aims to finalize by end of the year. But the RCEP in its current form also includes India, and while there are other reasons for delayed trade negotiations — such as different priorities among the ASEAN countries and Japan, Australia and South Korea — India's stubbornness has played a major role in the group's dysfunction.

As it strives to enact its ambitious plans for BRICS, China faces additional headwinds from India. In March, Chinese Foreign Minister Wang Yi proposed a "BRICS Plus" model, which would open up membership to other interested developing countries. But India, sensing a Chinese plot to dilute its influence, demurred. And though China has invited Tajikistan, Egypt, Thailand, Mexico and Guinea to attend this year's summit, it is on the understanding that it will be for one year only.

Fifteen years ago, both India and China were small enough that their differences could be overlooked. But now, the two have both reached sizes that cause them to clash, and as China looks to increase its global influence, India is in the way. But any Chinese attempt to remove India from BRICS would be difficult: The country is firmly enmeshed in the group's institutions — the NDB's president is, for example, Indian. And then Russia, which still has warm ties with India, would likely resist any efforts to remove New Delhi.

The BRICS countries were originally brought together by their potential for growth, but now the reality of that growth is causing problems among its members. As China strives to make BRICS a cog in its larger global strategy, the time is quickly arriving when the Beijing will have to assess how to manage India's continued (and increasingly disruptive) presence in so many of its multilateral groups.

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