Filippo Fasulo
On June 23rd-24th, Chinese President Xi Jinping will (virtually) chair the 14th BRICS Summit, gathering leaders from Russia, Brazil, India, and South Africa. After losing steam over the last few years, the meeting has gained newfound significance, due to the rekindling between China and Russia as a consequence of the war, India’s renewed role on the international stage (neutral with Russia yet active in the Indo-Pacific), and the perception of developing economies vis-à-vis mounting great power competition. For China, this summit represents an opportunity to gain consensus over an “alternative" world order not based on values and rules designed by the West. The meeting aims to “Foster High-quality BRICS Partnership, Usher in a New Era for Global Development”, a title that reminds of key words from China’s most relevant policies, such as Xi’s New Era and the Global Development Initiative. Will China convince the other BRICS members to adhere to its worldview and support its policies for development and security based on South-South cooperation?
Why it mattersAt the BRICS Summit, China and Russia will confirm their desire to question and challenge the existing world order. The two countries indeed already announced their “no-limits-friendship” at the Beijing Winter Olympic Games. The Summit now represents an opportunity to prove that challenging the “Western” world order is not only a strategic goal for the world’s two biggest autocracies but holds a wide consensus among other developing countries. For this reason, finding a viable framework (e.g. BRICS+) to enlarge the BRICS membership to other members from the Global South is one of its main goals.
Since the first BRICS summit in 2009 – BRIC at that time, before South Africa joined in 2010 – the economic gap between China and the other members has widened significantly. In 2009, China’s GDP accounted for three times that of Brazil and four times those of India and Russia. In 2021 it was ten times bigger than Brazil’s and Russia’s and over five times larger than India’s, while the comparison with South Africa has always been almost out of scale. Overall, China today clearly dominates the BRICS in terms of economic size and now aspires to lead the group’s narrative, too. Beijing recently implemented policies such as the Global Development Initiative on economic cooperation and the Global Security Initiative on a new security architecture, with the aim of changing the international consensus. The Summit will test their efficiency in aligning developing countries with Beijing’s goals. If these policies are mentioned in the final communiqué, it would be a victory for China.
All eyes will be on India at this Summit, as it was the case when Joe Biden launched the Indo-Pacific Economic Framework (IPEF) in May. In the fast-evolving scenario of the Indo-Pacific, India initially alarmed its Western allies when it did not condemn the Russian invasion of Ukraine. However, the situation has changed significantly: New Delhi has joined the Indo-Pacific Economic Framework and Prime Minister Modi has made clear that he shares Biden’s belief that China is the major international strategic rival. Against this backdrop, it is hard to tell how China and India might reach an agreement over the architecture of a new global order.
Our Take
The war in Ukraine and the US’ pressure to restrain China — started by then-President Donald Trump and reinforced by President Joe Biden — put Beijing in an inconvenient position. Beijing is currently more isolated than in 2015 – when the China-led Asian Infrastructure Investment Bank (AIIB) gained large support across advanced and emerging economies. China also finds itself more segregated than in 2017, when Xi Jinping’s speech on globalization in Davos, as well as the Belt and Road Forum for International Cooperation held in Beijing, represented the peak of China’s global consensus. At this stage, China needs to prove the world once again that it enjoys substantial support by non-Western countries. The BRICS summit could represent a crucial step forward in this direction. However, the outcome is likely to produce mixed results, with some countries supporting Xi Jinping’s worldview and ready to join BRICS (such as Argentina or Nigeria), while India might prefer not to fully side with China and manifest its loyalty to the other Indo-Pacific partners (e.g., the Quad fellows: the US, Japan, and Australia).
On the spotlight
The start of the war in Ukraine completely overshadowed the Forum for the cooperation in the Indo-Pacific organized by the French Presidency of the Council of the European Union on the 22nd of February. The event was supposed to launch the EU’s bid to take center stage in the region, but the beginning of the war in Ukraine naturally diverted the world’s attention. However, the upcoming – from July 1st – Czech EU Presidency decided to keep the Indo-Pacific among its top priorities and organized the Prague Dialogue on the Indo-Pacific on June 13th-14th, with the aim of implementing the European Strategy for the region presented last September.
The Czech interest might come as a surprise, given that Prague, unlike Paris, has no direct economic or strategic interests in the Indo-Pacific. Things, however, appear clearer when considering the evolving relationship between the Czech Republic and China. In the past, the country used to support Beijing’s investment and diplomatic initiatives like the “16+1” (China alongside 16 countries from Central and Eastern Europe). But now the Czech Republic has become a strong critique of Chinese influence, casting a shadow over its continued participation in the group. As such, this high-level dialogue held in Prague could signal a continuing decline for EU-China relations.
What to expect from the 14th BRICS summit hosted by China?
Russia’s expectations for the upcoming BRICS Summit under China’s chairmanship will mainly focus on financial cooperation among the BRICS economies, including a greater use of national currencies and the creation of BRICS payment systems. Russia will also be gauging the discussions on the reform of the BRICS CRA mechanism and the expansion in the operations of the New Development Bank (NDB). Another important factor to track is the potential institutionalization of the BRICS+ format, launched by China back in 2017. Discussions around the expansion of the core BRICS circle will continue at the Summit, but Russia is likely to favor a cautious approach to BRICS expansion, with particular emphasis on accession norms and selection criteria.
Yaroslav Lissovolik, Programme Director with the Valdai discussion club
With less than four months before Brazil’s national elections, the next BRICS Summit may be President Jair Bolsonaro’s ultimate foreign policy test, for three reasons. First, his administration will have to take a clear stand regarding the Russian invasion of Ukraine. So far, Brazil has adopted an ambiguous position of condemning Russia at the United Nations yet publicly praising Vladimir Putin. Second, Bolsonaro will have to position Brazil within an international order that is moving away from the West, while affirming his commitment to Western values. Finally, Brazil will have to deal with China and Russia’s pledge to include Argentina in the bloc, which would not be a problem if Bolsonaro had not portrayed Brazil’s neighbor as a rival. Therefore, we should not be surprised if, for electoral reasons, Bolsonaro was to altogether skip what may be his last diplomatic act as President. But in case the Brazilian President decides to attend the Summit, we may expect a lukewarm and uncommitted speech.
Guilherme Stolle Paixão e Casarões, Fundação Getulio Vargas
Like much of the Global South, South Africa is suffering from the aftermath of the COVID-19 pandemic and the current economic impact of the conflict in Ukraine. These challenges add urgency to the need for job creation and economic development, and I believe this will be an important priority for South Africa at this year’s BRICS summit. Increasing trade and investment will also be a key focus in its relationship with China. The current discussion around expanding the BRICS group may also resonate with South Africans, who joined the group during its previous expansion. It could be an opportunity to build a broader alliance to further amplify the voices of Global South states, which ultimately lies at the heart of South African foreign policy.
Cobus van Staden, South African Institute of International Affairs
What and Where
NORTH KOREA’S COVID OUTBREAKS ARE NOT UNDER CONTROL
After years of propaganda by the Kim family, who long held that North Korea remained Covid-free, the government finally admitted to being affected by a Covid outbreak in mid-May. Pyongyang has so far claimed that the situation is under control in the country and has continued to reject offers of foreign help. Skepticism over the effective handling of the pandemic wave remains high. The country’s medical infrastructure is considered rudimental, there is shortage of vaccines and medicines, and the population is both vastly unvaccinated and in a state of poor health due to the food shortage of the past years. In addition, in the last few weeks the state media Korean Central News Agency (KNCA) reported that a sweeping fever was affecting the population along with an undefined intestinal epidemic. The mere admittance of the presence of Covid-19 in the country speaks to the gravity of the situation, suggesting it must have become impossible to ignore. Moreover, such public announcement could be a way to signal North Korea vulnerability to China—the only country Kim seems willing to dialogue with. It remains unclear how much help Beijing would be willing to provide and whether Kim will be left with no choice but to ask for international support. In the meantime, to save face domestically and justify its expenses on weapons, North Korea continues with its missile tests – more than thirty this year alone – keeping tensions high in the peninsula.
CHINA’S INTEREST IN THE PACIFIC ISLANDS IS HEIGHTENING COMPETITION IN THE REGION
China’s expanding influence in the Pacific is a major source of concern for many actors in the region. Indeed, the last months have seen an increase in the engagement between Beijing and the Pacific islands: in April, Beijing signed a security agreement with the Solomon Islands before Chinese Foreign Minister, Wang Yi, embarked on a tour across the Pacific insular countries in late May. The Pacific has traditionally been considered Australia’s and New Zealand’s “backyard”, but fear is mounting over Chinese ambition in the region. However, this worry might be overstated. During his Pacific tour, Wang Yi proposed a multilateral agreement to create an economic and security environment more favorable to China. However, the Pacific Islands did not support the agreement which was quickly withdrawn. The insular states seem inclined to remain outside of the competition between the US and China and appear unwilling to complicate the existing relation with Australia and New Zealand. By focusing on building ties within the region, the PRC might have inadvertently prompted New Zealand, Australia, and the US to deepen engagement in the region. It is not by chance that the newly elected labor government in Australia immediately paid visits to other Pacific states, while New Zealand is working on a maritime security pact of its own with the Solomon Islands. Ultimately, the PRC is strongly committed to the Pacific, but, while the insular countries welcome trade with China, they remain wary of its interference in the security of the region.
SRI LANKA’S CRISIS IS NOT OVER
Prime Minister Ranil Wickremesinghe has announced that Sri Lanka’s economy has collapsed. The economic crisis that has hit the island over the last months has left Colombo unable to pay for imports, triggering shortages of fundamental products: there is nearly no fuel left in the country and the reserves of fertilizers are diminishing. This is causing farmers to abandon their fields, sparking fear of a looming food crisis which is further exacerbated by the lack of food produce and high inflation of consumer goods. Fuel shortages have also worsened in June, with the country struggling to secure fuel stocks. Already facing domestic critiques for failing to find a rapid solution to the situation, the newly settled PM Wickremesinghe is trying to strike deals with numerous countries - including Russia - to secure fuel imports. So far, India has stood out for its active support to Sri Lanka: since January 2022, New Delhi has supplied the country with over $3 billion and has recently opened a credit line of $55 million for fertilizers. As for fuel, there have been talks on an additional credit line of $500 million to ensure its procurement. However, India will not be able to provide enough credit to push Sri Lanka out of the crisis. A delegation from the IMF arrived in Sri Lanka on Monday to discuss bailout conditions, while Wickremesinghe is requesting prompt assistance as time is running out for the crisis-torn country.
I2U2: INDIA LOOKS FOR NEW GLOBAL PARTNERSHIPS
The first summit of the I2U2 - which includes India, Israel, the United Arab Emirates and the United States - will take place in July. The virtual meeting is intended to discuss food security issues, the energy crisis, as well as possible areas of cooperation among the four countries. The I2U2 Summit has been described as Biden’s ulterior attempt to strengthen partnerships with other powerful countries at a time of rising competition with China over global preeminence. However, while US attempts to revitalize international standing, India’s activism is slipping under the radar. The South Asian nation has been particularly active in the past months, hosting and visiting many foreign heads of states. Indian involvement in international deals can be attributed to the country’s wish to limit China’s influence by increasing its global alliances. It is interesting to note that while India has not detached itself from Russia and is an active participant in the BRICS Summit, it continues to engage in other US-led initiatives - such as the Indo-Pacific Economic Framework and the I2U2 – as well as showing interest for an increased partnership with the EU and Japan. New Delhi is once again trying to strike a delicate balancebetween its long-time ally Russia, fundamental for India’s supply of military equipment, and the Western bloc, instrumental for Modi’s objective of countering China and beneficial for the Indian economy in view of its rich market.
Looking ahead: cars are becoming an Asian affair
Amid the energy transition, the future of the automotive industry has been a main concern for the European and US manufacturing sectors, which fear losing market share to Asian producers. However, a look at historical data tells the story of a shift already under way. China is the outlier, given that, in the last 20 years, it has jumped from 4.1% to 32.5% of global motor vehicle production. However, other emerging economies in the region have also significantly improved their shares. India – standing at 1.8% in 2001 – currently holds 5.4%, more than traditional car manufacturers like Germany (4%), South Korea (4%), and Italy (1%). Next in line among emerging Asian economies are Thailand, Indonesia, and Malaysia, accounting for 2%, 1.3%, and 0.6% of global vehicle production, respectively. The decrease is not only a Western issue but also affects advanced Asian economies such as Japan, which has dropped from 17% to 9.8% of the market in just two decades.
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