Xiamen Summit Raises Golden Hopes

September 2, 2017
Editor: Arnold Hou
Aerial photo taken on Aug. 24, 2017 shows the scenery of a park in Xiamen, a scenic city in southeast China's Fujian Province. The 9th BRICS summit will be held in Xiamen from Sept. 3 to 5, 2017. [Xinhua/Song Weiwei]

 

Leaders from the world's top emerging markets will gather in the southeastern Chinese coastal city of Xiamen this month, marking the 11th anniversary of the BRICS cooperation mechanism.

The original term "BRIC," coined by former Goldman Sachs economist Jim O'Neill in 2001, referred to Brazil, Russia, India and China, four emerging markets with fast growth and great potential.

In 2006, foreign ministers from those countries met in New York to formally establish the BRIC grouping. When South Africa joined in 2010, the acronym changed to BRICS.

Together, the five countries now represent 44 percent of the world's population and 23 percent of global GDP, up from 12 percent a decade ago.

Amid a sluggish global economic recovery and setbacks in globalization, the Xiamen summit from Sept. 3 to 5 may be able to put a new shine on emerging markets and developing countries.

This year marks the first time for Chinese President Xi Jinping to chair a BRICS summit.

A traditional shipping center, Xiamen has been a window for the Chinese economy. As one of the first special economic zones in China, it has been a pilot city for many market-oriented economic reform experiments, a hub for attracting foreign industries, and a symbol of the nation's ambitions to reform and open up to the world.

Xiamen is also a pioneer of BRICS cooperation in trade and investment. In 2011, it hosted the China International Fair for Investment and Trade, where representatives of the five BRICS countries jointly participated for the first time.

The choice of Xiamen to host the latest BRICS summit reflects that openness and growth will have an important place on the agenda.

China has already emerged as a staunch advocate for globalization and open trade, particularly as the world struggles to close a widening development gap while protectionism rears its ugly head.

Xi, in his speech in January at the World Economic Forum at Davos, declared that protectionism was like "locking oneself in a dark room."

Though economic globalization has created new problems, this is no justification to write off economic globalization completely.

"Rather, we should adapt to and guide economic globalization, cushion its negative impact and deliver its benefits to all countries and all nations," Xi said.

This stance is likely to be reaffirmed at the Xiamen summit, which is themed "BRICS: Stronger Partnership for a Brighter Future."

China has consistently pinned high hopes on BRICS for emerging markets with which it can find natural common ground.

While the English acronym is itself catchy, the Chinese translation -- four characters meaning "gold bricks countries" -- conveys confidence in the future.

That sense of confidence is backed by concrete growth. Weathering through the global financial crisis, the BRICS countries have managed to exceed even O'Neill's bullish expectations.

Over the past 10 years, the five countries have contributed more than half of global growth. Their total volume of trade and overseas investment accounts for 16 percent and 12 percent of the world's total, up from 11 percent and 7 percent in 2006.

It can truly be said to have been a golden decade.

Strong economic performance means the BRICS countries are now key players in the world economy, and the inclusion of South Africa has given the group more political weight in global governance when speaking for the emerging world.

As a stabilizer in regional and international relations, BRICS has been working hard to gain a bigger say on the international stage.

On April 18, the BRICS countries aired their views on important global issues for the first time since their establishment as a group, as Liu Jieyi, China's permanent representative to the United Nations, made their collective voice heard in a Security Council debate.

On behalf of the BRICS five, Liu called for financing to better implement the 2030 Agenda for Sustainable Development, as well as more international efforts in conflict prevention.

Ruan Zongze, executive vice president of the China Institute of International Studies, said: "BRICS cooperation has not only helped the countries themselves, but enhanced the right to speak on global issues for all developing countries."

As Xi said in June, the BRICS cooperation is "an innovation, which transcends the old pattern of political and military alliance and pursues partnerships rather than alliances."

"The BRICS mechanism surpasses the old zero-sum game mindset and practices a new concept of mutual benefit and win-win cooperation," he said.

But of course, that does not mean that the BRICS countries are without problems.

For example, while China and India are expected to see their economies expand by around 6.5 percent and 7.2 percent respectively this year, there is less optimism about Russia, Brazil and South Africa.

According to the World Economic Outlook, updated in July by the International Monetary Fund, South Africa's economy will expand by 1.0 percent in 2017, Russia's by 1.4 percent and Brazil's by 0.3 percent.

However, with concerted efforts, the BRICS five could well expand their pragmatic cooperation.

Wang Yi, the Chinese foreign minister, told reporters in March, citing Xi: "The BRICS countries are like five fingers -- short and long if extended, but a powerful fist if clenched together."

And Xi, addressing an informal meeting of BRICS leaders before the G20 summit in the German port city of Hamburg in July, urged the five member countries to unswervingly promote the building of an open world economy, multilateralism and common development.

The Chinese president said he looked forward to working with other BRICS leaders to ensure the Xiamen summit would deliver results that would inject fresh impetus into BRICS cooperation, offer new solutions on improving global governance, and make new contributions to world economic growth.

To this end, China, as the holder of the BRICS presidency this year, has hosted a series of meetings to drum up support for the Xiamen summit.

Early last month, trade ministers met in Shanghai and agreed to unite against protectionism and safeguard the multilateral trade system. Days before that, a BRICS security meeting was held in Beijing, with discussions on global governance, anti-terrorism, the internet, energy, national security and development.

In June, finance ministers and central bank governors agreed to strengthen cooperation in several fiscal and financial areas, including the BRICS New Development Bank (NDB) and regulatory collaboration.

Shen Yi, director of the center for BRICS studies at Fudan University, said, "I think this year's summit in Xiamen will produce more practical and concrete cooperation, and improve trust and confidence among the BRICS countries."

Over the years, the five participating countries have improved macroeconomic policy coordination, promoted structural reform, infrastructure and taxation cooperation, and pushed forward new progress in fiscal and financial domains.

The grouping, which is based neither on ideology nor geopolitics, is seen as a new and perhaps better form of global governance in which emerging markets play key roles.

But the bloc does not want to limit future cooperation to the five nations.

In March, Chinese Foreign Minister Wang Yi said that China would explore options for expansion to a "BRICS plus" and build a wider partnership through dialogue with developing countries and international organizations.

Yaroslav Lissovolik, chief economist of the Eurasian Development Bank, said "BRICS plus" would provide opportunities for other economies and inject impetus into economic globalization.

"The proposals of Wang Yi regarding the expansion of the BRICS partnership zone are not only timely in light of China's presidency of BRICS, but they are also aimed at giving new impetus to integration processes under the complicated conditions of protectionism's spread in the world economy," Lissovolik said.

To help finance infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, China co-founded the NDB in 2014 with its headquarters in Shanghai.

The bank became fully operational last year and approved loans involving financial assistance of more than 1.5 billion U.S. dollars for projects in green and renewable energy, and transport.

Meanwhile, the Belt and Road Initiative, proposed by Xi in 2013 to better connect countries along and beyond the ancient Silk Road, will also inject new vitality to BRICS cooperation.

Named after the historic Silk Road, the Belt and Road Initiative is an example of China sharing its solutions for global growth and governance by linking countries and regions that account for about 60 percent of the world's population and 30 percent of its GDP.

Sixty-eight countries and international organizations have signed agreements with China on Belt and Road cooperation. Total trade between China and other Belt and Road countries exceeded 3 trillion U.S. dollars between 2014 and 2016, and Chinese investment in these countries exceeded 50 billion U.S. dollars.

The initiative has been applauded by BRICS countries. With such inclusive platforms as the Belt and Road and the NDB, the Xiamen summit looks likely to add yet more glitter to the BRICS of gold and prepare the five nations for another successful decade to come.

(Source: Xinhua)

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