Why is China, contrary to its habitual low profile in world affairs, so active in promoting BRICS – the grouping with Brazil, Russia, India and South Africa? What does it expect to gain out of encouraging mutual co-operation among the club of the world’s largest emerging market economies? Dr. Lui Youfa from a key foreign relations thnk tank in China, gave a very straightforward answer: “We don’t want to put all our eggs into just one basket.”
Lui called the bloc a “new basket” – and a “a fairly good basket” that would help China diversify its business interests in the developing world and avoid overdependence on developing economies.
At the International Monetary Fund, the BRICS nations would also have a substantial effect on the balance of power if they consolidated all their voting rights, amounting to 11.28%, against the US 16.82%. It takes 15% to veto any issue. It would be ideal if the BRICS nations could co-ordinate their positions first before they negotiated with the developed countries on the global economy and financial system.
by 2050, the BRICS’ total share of the world economy might exceed that of the developed economies combined, offering China a good way to diversify risk and seek more opportunities.
In terms of their contribution to the world’s additional wealth, the share of the BRICS nations sky-rocketed, from next to nothing at the start of the 1990s to more than 60% last year. In contrast, the developed countries’ contribution to the world’s new wealth has steadily declined.