Implications of the Xiamen BRICS Summit

Counting from the inaugural BRIC Summit in Yekaterinburg in 2009, the BRICS cooperation has gone through eight full years. This year the Xiamen Summit has called people’s attention towards both current development and future prospectsof the BRICS. Meanwhile, they are also concerned about the further cooperation among the BRICS and the improvement in global governance promoted by the BRICS cooperation as well.

I. Economic Cooperation and Development: Still the Primary Goal of the BRICS

Since the BRIC concept was first proposed by the Western scholar O’Neill in 2001, the economy of the BRICS once performed prominently early in the new century. Later, due to the impacts of the international financial crisis and problems occurring during the development of the BRICS, the BRICS were frustrated in the past three or four years. However, with the gradual stabilization of European and American economy, in addition to perseverant efforts the BRICS on their own, since the first half of 2017, the economy of the BRICS has generally improved significantly.

In the past ten years, the proportion of the economic aggregate of the BRICS in the world economy increases from 12% to 23%, the proportion of the total trade increases from 11% to 16%, the proportion of foreign investment increases from 7% to 12%, the contribution rate to world economic growth is over 50%. In the first half of 2017, China’s imports from the BRICS gained rapid growth, the amount of which is over $70.16 billion, with a growth rate of 33.6%, which is 14.7% higher than that during the same period last year.

As far as China is concerned, since the first half of this year, its economy has grown by 6.9%. In late July, the IMF raised its economic growth forecast for China in 2017 for the third time this year.

Over the past few years, some have said, “The BRICS has faded.” Nevertheless, the signing of the Xiamen Declaration and the results of over 40 agreements shows that the BRICS is still an important driving force and source for the recovery, development and cooperation of the world economy. In detail, a series of documents in trade have been formally passed, including the BRICS investment facilitation outline, roadmap of trade cooperation services, economic and technological cooperation framework, e-commerce cooperation initiatives. Meanwhile, in the field of investment, China will formulate the first BRICS economic and technological cooperation exchange plan with a total amount of 500 million RMB, strengthening policy exchanges and pragmatic cooperation in economy and trade.

II. The BRICS Make Efforts to Practice and Optimize the Governance Structure

The BRICS not only endeavors to achieve the due status of emerging countries in the international financial institutions through the reform in shares within the institutes such as the IMF, but also aims to provide a model through establishing creatively the NDB. On the one hand, the BRICS maintains cooperation with such traditional international financial institutions as the World Bank, the Asian Development Bank and on the other hand, it tries to establish a financial institutional structure where equalities and differences co-exist, laying foundations for future larger-scale cooperation.

In addition, this summit decides to establish the CRA macroeconomic information exchange mechanism in the field of international finance, as well as to further improve the research capacities of the CRA and to enhance the consensus of a closer cooperation with the IMF. China will contribute $4 million to the preparation funds of the NDB project, supporting the banking operations and long-term development. This summit also supports to establish the first regional office of the NDB, namely the African Regional Center, in South Africa. Besides, it is also supportive to set up a project preparation fund of the NDB and approve the second batch of projects.

III. BRICS-Plus Deepens Regional Cooperation Among Developing Countries

Over years, many emerging economies and developing countries have always been expecting to participate in the BRICS, including Argentina in South America, Indonesia in Southeast Asia, Egypt in the Middle East in and Turkey across Asia and Europe. These countries have basic attributes, i.e., all of them are developing countries with certain regional influences, with rich endowment in resources and great potentials for economic development, and they play indispensable and important roles in international affairs.

Regarding the issue whether the BRICS should enlarge or not, some members hold that, there is no hurry to expand but should instead advance it in depth, focusing on implementing the existing agreements. While others argue that, the BRICS should gain victories through scale effects and enroll new members in time. Although BRICS has not expanded during this summit, some of these key countries are invited as participants, which paves the way for the further development of the future BRICS cooperation.

In addition, the BRICS members are all regional major countries. Therefore, since the Durban Summit in 2013, whenever the annual BRICS summit was held, there was also a dialogue with the leaders of the regional cooperation organization where the host country is located, to highlight the leading and coordinating role of the five BRICS members as major countries within that region.

For instance, the BRICS dialogue with leaders of South American countries was held during the Fortaleza Summit in Brazil. Russia’s Ufa Summit witnessed the dialogue between leaders of the BRICS and the Eurasian Economic Union Member States. During the Durban Summit in South Africa, there was a dialogue between the leaders of the BRICS and African leaders. A dialogue was held between the BRICS leaders and leaders of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation during the Goa Summit in India. Obviously, this mechanism will continue during the following summits.

IV. Strengthening Humanities and Security Cooperation, Laying Solid Foundations for the BRICS Cooperation

One of the most valuable experiences of international multilateral cooperation is that we should strengthen the links between humanities and cultural exchanges, advancing the mutual understanding of the BRICS members. This summit not only established the BRICS University League, signed sports exchange memos, agreed to promote the medical cooperation projects, but also began to plan the establishment of the BRICS cultural exchange funds.

It is noteworthy that the Xiamen Declaration attaches great importance to international security issues. According to this summit, not only the annual meeting of foreign ministers will become a formal mechanism, but also the meetings among senior representatives of the BRICS security issues will be held at the same time. This summit also criticized seriously terrorism, the spread of drugs, all kinds of destruction activities against public order and the nuclear test of North Korea as well.

The recent good development momentum of the BRICS does not necessarily mean that the BRICS have already overcome in-depth problems in economic structures, market foundation, innovation abilities and many other aspects. Furthermore, it also does not mean that there does not exist cognitive differences or collision of interest, including border turmoil and many other pressing issues.

However, the progress clearly demonstrates that the future of the BRICS cooperation is bright. First, the great economic complementarities between the BRICS promotes the deepening of their internal trade and investment. It will lay foundations for the connectivity between the BRICS cooperation with the One Belt, One Road Initiative. Second, through economic cooperation, it adopts non-alignment and non-confrontational ways to provide basis and paths to solve global and regional security issues. Third, it strengthens the existing basis for the BRICS cooperation, further exploring the mechanism construction of the BRICS cooperation and providing effective pragmatic paths and concrete experience for the future regional and international order.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.