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According to many policy analysts and observers in Beijing, China is facing an unprecedented global situation — the rise of the Rest, the rise of the West and the rise of the Different. In this new world with increasing uncertainties, Beijing finds that groupings like the BRICS assume critical importance in confronting domestic and external challenges.What the Chinese new leadership finds disturbing is an unhappy reality that the BRICS countries have been suffering from various economic difficulties, falling currencies and social instability recently. Many observers including known BRICS-baiter Ruchir Sharma, the head of Emerging Markets and Global Macro at Morgan Stanley, began a viral campaign against what he termed, the broken BRICS. The international business club is seemingly shifting their investment interests from the BRICS countries to the NEXT 11, such as Mexico, Indonesia and Nigeria. For the BRICS countries, the rest of the emerging economies have been catching up and could end up as serious competitors.
US backed transatlantic alliances and the containment of China
In the meantime, a more confident Uncle Sam is coming back with relatively steady economic recovery, ambitious goals of restructuring the world trade architecture by pushing for the TPP and the TTIP and its long awaited energy self-sufficiency. The US push for revitalisation of these transatlantic alliances in geo-economics and geo-strategic terms may pose significant and multiple challenges to emerging powers like China. For many policy planners in Beijing, the TPP and the TTIP are regarded as the tools of economic containment aiming to hold down the rise of China. As Arvind Subramanian, an economist with the Peterson Institute points out, by lowering trade barriers in Asian and US markets, but only to countries in the TPP, Chinese firms are discriminated against and it is the imposition of this cost that merits the term “containment”.
Beijing’s dilemma over strife in MENA
China and other emerging powers as well as the Western countries, however, are united in worries about the surge of political Islamism and profound changes to the strategic landscape in the Middle East and North Africa (MENA).
The rise of the different in the MENA region evidenced by both endless domestic political turmoil and recent terrorist/extremists’ attacks is a gathering threat. Given its increasing energy and security dependence on this important region, what strategy China may adopt here is the subject of the most interesting debate in policy circles in Beijing.
We have no clue about what the endgame there will be, but the MENA region will certainly be very different from what it is like now. Local realities in the greater Middle East trumped American ambitions recently. The Obama administration was self-professedly determined to disengage with the troubles in the region, though it has to show the appetite for intervening in the Syrian crisis and brokering the Palestine-Israel peace talks.When Ian Bremmer and David Gordon coined the term — the rise of the different, they were referring to states that do not buy into the post-war system like the BRICS countries.
Beijing’s BRICS pivot
Facing this increasingly complex tangle of global affairs, the BRICS is very vital for China to seek stabilising forces and improving its own strategic resilience. The BRICS is an empowering identity for Beijing on the contemporary world stage.
And doubts regarding China’s seriousness about BRICS should be laid to rest by this fact:
In the work report of the 18th CPC party congress in 2012 which serves as the guideline for China’s grand strategy in the coming years, only the UN, G20, BRICS and Shanghai Cooperation Organisation (SCO) were mentioned as the main international institutions China will make more efforts to strengthen.
The report also said these are the principle platforms which China can capitalize on to enhance its positions and bargaining powers in world affairs.
The current economic slowdown contagion across the BRICS is a reality, and such reality is sounding alarms and urging China to accelerate the institutionalization of the grouping. In March 2013, President Xi Jinping joined the BRICS summit in Durban, South Africa in his first foreign trip after taking office. The 2013 Durban summit was really a turning point for the development of the BRICS as a grouping, when a number of specific and meaningful cooperation proposals were unveiled including the BRICS development bank and the currency reserve pool to address the balance-of-payments difficulties of the member states.
No doubt, these moves will pose challenges to the domination of the Bretton Woods institutions like the IMF and the World Bank.
They have undoubtedly resulted from the delayed reforms of global economic governance institutions and the reluctance of the established powers to cede their privileges.
The underlying, but unstated, message is that the BRICS countries as the emerging powers do not want to compete with and confront against the established powers and institutions, but they are making more efforts to escape them. They have absolutely no luxury to be passive.
The heterogeneity of the BRICS bloc
Indeed, there still exist so many disagreements, if not conflicting views, on the institutionalisation of the BRICS among its member states. Everyone has its own global ambition and strategic calculus to make use of this grouping in maximising its relative gains. India and Brazil are constantly worried about the risks associated with the potential domination position of China in the BRICS development.
While China expects the BRICS development bank to do more on promoting intra-BRICS trade, India — the inventor of this initiative — seeks to make the bank play a larger role in infrastructure investment.
More visible doubts exist in the feasibility of the BRICS as a platform for deep policy coordination on the intractable regional and international issues of political and geostrategic significance.
Russian President Vladimir Putin strongly urges the political transformation of the grouping into “a full-scale strategic cooperation mechanism”.
But the others seem to be more cautious on that and they insist a gradual approach with international economic governance reform as top priority of the BRICS.
For China, its relations with Russia would be a push while China-India relations potentially a pull in the BRICS development.Both China and Russia feel heightened pressure in their immediate peripheries from US enhanced efforts to build up its alliance networks and make interventions in the troubled West Asia.
Syria is akin to the last fort of Russia in the region and the disorder of West Asia with the fall of Syria will be far more threatening to Moscow and Beijing than to Washington.
And because of the North American energy revolution, the international energy market is likely to become a buyer’s one, which facilitates energy deals between China and Russia.
In contrast, China-India relations are more complex and layered. For China’s new premier Li Keqiang, the choice of India for his first foreign trip in May 2013 meant to send out a signal.
Li made it clear to Indian leaders that “we are not a threat to each other, nor do we seek to contain each other”. He pledged to open China’s markets to Indian products for addressing the trade imbalance. The premier also sought to reassure India over the boundary issue and called on both sides to use their wisdom to find “a fair and mutually acceptable solution.”
However, the Indian elites and public’s growing wariness towards China is a big problem. A poll released by the Lowy Institute in Australia in June 2013 suggested that more than 80 per cent of Indians view China as a security threat, even though China has become India’s largest trading partner. Moreover, 65 per cent agree that India should join with other countries to limit China’s influence.
In this sense, the challenges facing China on its involvement in the BRICS are daunting. Beijing needs to find solutions to curb the geopolitical competition in bilateral ties, adopt a low-profile strategy in the collective leadership, and enhance the reputation of the BRICS as a global public goods provider rather than a shortsighted club.
Maybe, it would be wiser for China to seek more advice and assistance from Brazil and South Africa which are expected to play larger mediating roles among the other three Eurasian giants.