After our first guest post by Floriano Filho (2001, MA Communications, Westminster), I am pleased to share comments from our Chevening China network. Mr Wang Xin studied Business at Edinburgh University in 1997/98, Mr Peng Xiang was at Westminster in 2006/7 where he did Law, Mr Chen Hanlin is a 1999-00 Cambridge alumni in Education. Ms Liu Hong is also studied at Cambridge where she did a Finance Masters in 2012/13 and Mr Liao Lei studied globalization at University College London in 2012/13 and has shared his thoughts via an amusing power point presentation. I would like to thank all contributors and encourage your comments on these interesting points of view*.
BRICS in a sentence:
“We may not feel big differences until the next world financial crisis comes”. Mr. Wang Xin, 1997-98,MBA, Edinburgh
“ If BRICS break the barriers between each other, they will become the most important bricks of the world economy”. Mr. Peng Xiang, 2006-07, LLM, Westminster
And in a few words:
“It is a profound, but interesting question. BRICS was forged under China’s initiative to counter other regional blocks. The aim of BRICS is an economic, rather than a political alliance with the major emerging markets, which are rich in natural resources. The recently established New Development Bank, with US$50 billion initial funding, which will be headquartered in Shanghai, and have a Russian and a Brazilian at the head of the bank’s operation. The New Development Bank is an alternative to the World Bank and IMF, both headed by the US and Europe, respectively. As an international citizen, BRICS formation is one more economic institution to speak for the emerging markets; I would see the global financial market becoming more stable and China’s global financial influence increasing in the meanwhile. I look forward to seeing how Argentina’s economic difficulties might be overcome with help from the New Development Bank. Mr. Chen Hanlin, 1999-00, Education, Cambridge
An economic rather than a political forum – “a loose partnership rather than an organization”:
BRICS are a group of 5 large, fast emerging countries. The initiative of the forum is economic rather than political, although the two are not clearly separate. Being large and emerging, their growth moves the needle on the world economic map. At the same time, they are carefully manoeuvering among intricate global balances and their own internal problems. As a result they are at a higher risk. Considering their size, the risk is nevertheless posed to the whole world. That is the main reason why I believe BRICS benefit not only the member countries, but also the globe. On July 15th, an agreement was reached to create a BRICS Development Bank (DB) and Contingency Reserve Arrangement (CRA). The development bank will support infrastructure projects in the same way the World Bank (WB) and Asian Development Bank (ADB) are doing. The CRA will be a standby facility to shield currency crisis. So far BRICS has only been a nascent venue to improve communication among member countries. Now that it has decided to create a tangible bank, co-operation is certainly expected to deepen. The authorized capital base of the bank will be $100 billion, which is significant considering ADB’s capital base was just tripled to $165B from 67 member countries. Despite of the similarities to WB and ADB, I think BRICS DB may develop a different framework for choosing projects. It is likely this bank will be more growth oriented rather than ending extreme poverty and hence require less stringent austerity. Regarding the future of BRICS, I think the first and foremost issue is how far it will go. Typically in a well-connected organization, one or two members play a core role and undertake more responsibilities setting the tone in disputes as Germany in EU and the US in multiple organizations. Based on my observations, the core role players usually are equipped with superior economic power and commonplaces in political / cultural terms. Unfortunately this is not anticipated with any member of BRICS. Hence I believe BRICS will be a loose partnership rather than an organization. Ms. Liu Hong, 2012-13, Finance, Cambridge
The BRICS in graphics – here is an lighthearted look at the BRICS in maps.
*Please note that these opinions do not reflect those of the UK Government.