What is the context of the BRICS China summit?
It was the group’s first meeting since the U.S. announced its withdrawal from the Trans-Pacific Partnership trade deal and the Paris agreement on climate change. In addition, BRICS members have become increasingly disappointed with the level of trade and investment cooperation within the group, originally one of its core priorities. The completion of major infrastructure projects through BRICS instruments—the New Development Bank (NDB) and Contingent Reserve Arrangement—has been delayed. However, an IMF forecast states there is the likelihood of some improvement in the economies of Brazil, Russia, and South Africa in 2017, which could influence the perception of BRICS as competition for the G7. The BRICS countries also try to coordinate their policies in the G20 in the context of IMF reform and in weakening global protectionist trends.
What are the main outcomes of the summit?
BRICS as a group expressed its support for globalization processes and actions towards climate protection. It reported its members unanimously condemned North Korea’s sixth nuclear weapon test, which was carried out on the first day of the summit, and they appealed for a peaceful resolution of the conflict. The BRICS summit declaration also included a statement opposing the activities of terrorist groups operating from Pakistan, which has always been raised in past summits by India but blocked until now by China. During the summit, the group also agreed to stick to existing NBR investment projects in, e.g., South Africa and Brazil. Even though all BRICS members publicly declare a willingness to cooperate on various matters, the differences in their interests prevail and mostly dominate BRICS relations.
What is BRICS’ role in China’s foreign policy?
China uses BRICS as a tool to present itself as the leader of emerging economies, as seen by summit invitations to the leaders of Egypt, Mexico, Thailand, Tajikistan, and Indonesia. However, China’s highest priority is the success of its Belt and Road Initiative (BRI) and the Asian Infrastructure Investment Bank. In that context, its financial declarations of support for sectoral cooperation projects within BRICS ($80 million) and new NDB projects ($4 million) are quite small compared to announcements of funding made during the Belt and Road Forum in May (more than $120 billion). The North Korean nuclear test also undermined China’s credibility not only as a country thought capable of influencing Kim Jong Un but also as leader of the region.
Did the summit improve China-India relations?
The arrival of India’s prime minister at the summit in Xiamen was not certain until the last moment. The main reason was the worsening of a China-India border dispute in June. The crisis was quieted a few days before the summit after India withdrew its forces from the disputed territory and China ceased its aggressive rhetoric towards India. The declaration of cooperation made by Chinese leader Xi Jinping during his meeting with Indian Prime Minister Narendra Modi also had a conciliatory tone. Neither side is interested in escalation and instead seek deeper economic relations, including within BRICS. India was keenly interested in keeping two out of the seven projects financed by the NDB, and ongoing in the country.
What did Russian President Vladimir Putin’s attendance at the summit mean for BRICS and China?
Besides the summit, Putin was also paying an official visit to China, his fourth this year. Russia uses BRICS to bolster its position in the international arena and gain investment capital through the BRICS instruments. Russia’s president also suggested intensifying the group’s actions to strengthen the yuan as a reserve currency at the expense of the U.S. dollar. In September 2016, the IMF included the Chinese currency in its “special drawing rights” basket, an international financial instrument, but market interest in the yuan remains low. Putin and Xi also discussed the need for synergy between the BRI and the Russia-led Eurasian Economic Union, as well as delays in the construction of the Moscow–Kazan high-speed railway. Russia wants an increase in funding for the project, but China has yet to agree. During the official visit, an agreement was signed between Russian state oil firm Rosneft and CEFC China Energy on the joint development of hydrocarbon projects in Siberia.
