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Abstract
Cooperation between Brazil, Russia, India, China and South Africa (BRICS) has increased since the first BRIC (Brazil, Russia, India and China) meeting in 2006. We have witnessed the establishment of various BRICS institutions, including the New Development Bank and the Contingent Reserve Arrangement. Because of its politico-economic weight, China exerts great weight on the BRICS exceeding that of its partners. Additionally, Beijing has pursued its own initiatives including the Belt and Road Initiative (BRI), and the Asian Infrastructure Investment Bank, with for instance the BRI having created frictions with other BRICS members including India. This article examines how and why China and the BRICS are reshaping global economic governance, and to what degree the BRICS and BRICS institutions represent anything new. More importantly, it analyzes China’s use of the BRICS to reshape global economic governance, and the potential for its independent initiatives to undermine the BRICS’ impact on global economic governance. It shows that the dynamics of the BRICS limit their potential of reshaping global economic governance. What is critical is the domestic political economy and interests of China, India and the other BRICS countries that all hold different positions and preferences in the international system.
Acknowledgments
The author would like to thank the two anonymous reviewers for their insightful comments and suggestions. The author is also grateful to Shaun Breslin, Jean-Marc F. Blanchard, and the participants in the International Studies Association 2019 Annual Convention in Toronto for their comments. Lastly, the author would like to thank Zhu Jiejin for discussing BRICS matters.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1 As pointed out by Stuenkel, an overarching trend of the 2011 BRICS Sanya Summit was China’s definitive rise as each BRICS members’ main bilateral economic partner, which cemented China’s special role in the BRICS grouping, arguably allowing it to exert considerable influence during intra-BRICS debates prior to and during the BRICS Sanya Summit, and it was in this context that the inclusion of South Africa has been ‘continuously described’ as a Chinese initiative, even though negotiators from Brazil, India and Russia have always been supportive of the move (Stuenkel, Citation2013, p. 315).
2 In June 2019, the AIIB also announced that from the second half of 2019 the Bank was going to start piloting local currency financing (South China Morning Post, Citation2019).
3 Still, civil society organizations have expressed their concerns over what they perceive as a lack of transparency in the NDB’s social and environmental safeguards (Devex, Citation2016).
4 As an illustration: In July 2016, the NDB issued a 3 billion yuan (USD $448.37 million) bond denominated in RMB to fund green investment projects (Wang, Citation2017).
5 China has medium to high investment grades in its sovereign rating, while the other four NDB countries have ratings below or bordering investment grade, and thus it is not surprising that so far the NDB has relied heavily on the Chinese capital market, as for instance in 2016 and 2017 the NDB obtained a AAA credit rating with stable outlook from two leading Chinese rating agencies (Wang, Citation2019). For instance the AIIB differs in this respect due to the membership of this multilateral development bank including a substantial number of developed countries, contributing to obtaining a good credit rating (see Wang, Citation2019).
6 Russian President Vladimir Putin supported the complementarity between the Eurasian Economic Union and the BRI; Then South African President Jacob Zuma hoped the BRI can accelerate his country's industrialization, and then Brazilian President Michel Temer said the BRI was in line with the country's current development needs, particularly in regard to infrastructure construction (Belt and Road Portal, Citation2017).
7 This is in line with the practice of inviting befriended nations of the host country to the annual BRICS Summit, as since 2013 the chairing country has invited states that are geographically and geopolitically close to it. For instance in 2015 Russia invited the SCO and the Eurasian Economic Union (EAEU) countries to the Ufa Summit, India invited the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) countries to the 2016 BRICS Goa Summit, the PRC invited Egypt, Guinea, Tajikistan, Mexico and Thailand to the 2017 Xiamen Summit, and South Africa hosted the BRICS-Africa Outreach during the 2018 BRICS Johannesburg Summit (Purushothaman, Citation2019; see also Zhao, Citation2019).
8 The AIIB’s regional members are the majority shareholders with non-regional members holding smaller equity shares, reflecting the ownership of regional members while providing non-regional members the opportunity to participate actively. China is the AIIB’s largest shareholder and holds the highest percentage of its voting rights, followed by India, Russia, Germany and South Korea. On this issue it differs from the NDB that has equal voting shares. In total 18 EU Member States have joined, including the Big Three, and apart from Japan virtually every American ally in Asia. It illustrated the struggle, with the USA demanding its allies not to join as it regarded the AIIB as an unnecessary rival to the World Bank and its regional affiliate the ADB, while on the other hand China attempted to get them on board. China’s BRICS partners all joined.
9 For a graphic overview of emerging power alliances and other multilateral frameworks see also Keukeleire and De Bruyn, Citation2017, p. 437.
10 In December 2018, Russian Ambassador in Beijing Andrey Denisov said that “Russia is willing to work with China on long-term and stable supply cooperation in the energy industry,” adding that “If China partners with Russia, [both sides will] benefit from healthy development in bilateral ties and establish a security network [on energy]” (South China Morning Post, Citation2018a).
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Bas Hooijmaaijers
Bas Hooijmaaijers is Assistant Professor and Chenhui Research Fellow in the School of Advanced International and Area Studies at East China Normal University (Shanghai, China), and an affiliated scholar with the Leuven International and European Studies Institute at KU Leuven (Leuven, Belgium). He obtained his Ph.D. from Shanghai Jiao Tong University’s School of International and Public Affairs. His research activities include projects on the European Union’s China policy, the BRICS, and the global power shift towards the Asia-Pacific Region. He has published in leading journals including the Journal of Common Market Studies, Global Governance, Journal of European Integration, and Journal of Chinese Political Science, and has contributed to ad hoc studies for the European Parliament. Dr. Hooijmaaijers is fluent in multiple languages and has a functional proficiency in Mandarin.