Russia
Source: infobrics.org

Daria Saperova, participant of the VI BRICS International School – special for InfoBRICS

The term "digital economy" since its inception in the mid-1990s has been characterized by rapidly changing technologies and how businesses and consumers use them. In the late 1990s, the first studies in the field focused mainly on the spread of the Internet and contained initial reflections on its economic consequences. An example is Understanding the Digital Economy: Data, Tools, and Research. As the Internet has spread since the mid-2000s, more and more attention has been paid to the conditions under which the digital economy emerges and, most importantly, can develop. In recent years, the trends of the digital economy have shifted to the search for optimal ways to distribute goods, services and technologies. Global brands and companies are going through the process of digital transformation as a standard, using the technologies and innovations of the digital economy for this. The digital economy continues to gain momentum thanks to the ability to collect, use and analyze huge amounts of electronic data on all topics. Such data is collected based on the analysis of the digital footprint left on various online platforms as a result of the activities of individuals, social groups or enterprises. The volume of global Internet Protocol (IP)-based traffic, which provides a rough indication of the magnitude of data flows, has grown from about 100 GB per day in 1992 to over 45,000 GB per second in 2017. Global IP traffic is predicted to reach 150,700 Gb/s by 2022 as a result of more new Internet users and increased penetration of the Internet of Things into everyday life (UNCTAD, 2019)

The emergence and rapid spread of the digital economy is one of the most important trends in world development in recent decades. The digital economy and related phenomena, among which digitalization stands out (the use of digital data and technologies, leading to the emergence of new or transformation of existing activities, have an increasing impact on the world economy, individual national economies and people's lives. The digital economy is developing very its progress in recent years is especially noticeable: the volume of world trade in goods, one way or another related to information and communication technologies (ICT), in 2015 exceeded 2 trillion US dollars, the production of ICT products provides about 6.5% of th of GDP, exports of ICTrelated services grew by 40% in five years (2010-2015), and more than 100 million people are employed by ICTs.

As the digital economy develops, new economic and political forces appear on the world stage that have to compete with the US and the EU. These economic systems are counterbalanced by the BRICS countries (Brazil, Russia, India, China and South Africa), the strongest of the emerging economies. The BRICS 2019 summit held in Brazil identified the key issues around which the members of the Commonwealth need to increase synergy: the digital economy, cybersecurity, as well as cooperation in the field of science, technology and innovation.

The most common challenges faced by the BRICS countries in the development of e-commerce include a lack of accurate data, logistics infrastructure, consumer confidence, regulatory requirements, facilitated crossborder customs clearance and talent. In addition to these general issues, each BRICS country has its own unique problems and challenges. For example, the development of e-commerce in Brazil faces customs and taxation issues. There are serious barriers in cross-border e-commerce in Russia. In South Africa, there are problems with payment and logistics. In China, the loss of confidence in e-commerce is coupled with the need to improve its regulation, especially in the area of consumer protection. The growth of the digital economy is becoming a determining factor in global development. The digital economy creates new incentives and opportunities for economic growth, which accompanied by deepening global inequality. At the moment, the BRICS countries are at different levels of development of the digital economy. In my opinion, this problem is serious and urgent. As Chen Chao said, "the need to focus on bridging the digital divide and narrowing the gap in digital infrastructure, digital technology and digital services." I fully agree with this statement.

I believe that in order to solve this problem and overcome the difference in the levels of development of the digital economy, it is necessary to deepen the dialogue and exchange of best practices in promoting digital development; Develop common standards for the production of digital goods and services, as well as promote the common interests of the BRICS countries in ensuring global information security.

Due to the fact that not all BRICS countries have comprehensive programs for the digitalization of the national economy, it can be proposed to develop within the framework of the BRICS a model strategy for introducing digital technologies into the economy, which would take into account the main modern trends in digitalization and could be used by individual BRICS economies as a basis for creating or developing national digitalization plans.

Digital technologies are entering modern life and production very quickly. The BRICS countries, in order to maintain their competitiveness in the future, are also forced to quickly introduce digital solutions into their economies. In order to contribute to the unification of the capabilities of the BRICS economies in the creation and implementation of digital technologies, it is proposed to create a Technological platform for sectoral ecosystems of the Digital Economy of the BRICS countries. On the basis of this platform, the formation of the National Information Infrastructure could be carried out to provide high-speed communication and a cloud platform for various government departments: from the government to the level of rural settlements.

The rapid development of e-commerce in international practice has already raised the issue of developing international agreements governing e- commerce. There are different approaches to the definition and classification of "digital products" and the types of agreements that should govern the online sale of goods and services (GATS or GATT). In this regard, it would be advisable for the BRICS countries, within the framework of the BRICS working group on e-commerce, with the involvement of representatives of interested departments, to develop synchronized approaches to these issues, which will create conditions and contribute to the development of national laws on the regulation of Internet commerce, the conclusion in the future multilateral trade agreement on e-commerce issues, including the procedure for taxing telecommunications services and e-commerce using automatic exchange of tax information, strengthening the positions of both individual BRICS countries and the forum as a whole in negotiations on e-commerce issues with countries outside the BRICS.

To create conditions for the development of all types of electronic commerce (B2B, B2G, B2C), equal recognition of foreign and national electronic signatures is required. In this regard, it seems important to develop rules and documentation requirements that regulate the procedure for cross-border electronic document management within the BRICS countries. At the initial stage, it is necessary to sign an Agreement on the use of information technologies in the exchange of electronic documents in cross-border trade. E-commerce will develop steadily (especially in the B2B and B2G sectors) only if financial transactions are reliably protected from access by unauthorized persons. The development of cryptographic information protection tools is a common problem facing all BRICS economies. Based on this, it seems appropriate to develop a project of the BRICS countries for the joint development of specialized means of cryptographic information protection. In particular, a scientific and innovative platform for digital security can be created based on the Kaspersky Lab, which provides for the study and exchange of experience of the BRICS countries.

The development of software and data transmission protocols for cross-border e-commerce is going on in parallel in many countries, which leads to a variety of technical solutions that are not always compatible with each other. In this regard, the BRICS countries could launch a project through the relevant departments (Ministries of Communications and ICT) to develop common approaches to the applied technical solutions and standardize all software protocols. The use of unified solutions will create additional conditions for the development of electronic commerce between countries.

The development of e-commerce will be actively influenced by emerging digital technologies. Russia is already actively engaged in the standardization of mechanisms for distributed ledger technology and blockchain technology and the introduction of blockchain in financial transactions. Considering the high degree of reliability and transparency of transactions carried out using blockchain technology, it would make sense for the BRICS countries to launch a joint project to develop and implement this technology. In the case of the introduction of this technology in cross-border trade, both the seller and the buyer get the opportunity to track the movement of goods in real time, which increases the transparency, predictability and attractiveness of foreign trade operations.

The development of cooperation between the BRICS countries in the implementation of digital technologies will be facilitated by the harmonization of national laws governing the use of technologies of the Internet of things, distributed information storage (blockchain) and big data, as well as the deployment of fifth generation networks.

One of the central problems in cross-border trade is the problem of VAT payments. The lack of a uniform approach to resolving this issue leads to the erosion of the tax base of a number of countries and the withdrawal of profits from taxation. The BRICS countries at this stage are actively developing ecommerce, in this regard, it is important to agree in principle on the positions and reach agreements on this issue. It would be advisable to consider the possibility of creating a unified mechanism for the collection of VAT when foreign organizations provide services via the Internet to individuals. It is important to define a unified list of such services, the places of their provision, the procedure for paying VAT, etc.

As a basis for expanding cooperation between the BRICS countries in the tax sphere at the first stage, the OECD Agreements on the automatic exchange of information, the Common Transmission System of the transport infrastructure for the automatic exchange of information for tax purposes and the Network on joint information exchange in the field of international taxation (JITSIC). Based on already existing international agreements and opportunities, the BRICS countries can intensify their cooperation in their national segments.

Online purchases are delivered via international mail and are often regarded as goods for personal use, in this regard, foreign online stores do not bear the burden of import customs duties and can offer lower prices, which creates unequal conditions for the functioning of online and offline trade. In order to intensify mutual electronic commerce, maintain healthy competition and equalize the conditions for conducting trading activities on the Internet for domestic and cross-border transactions, it is advisable for the BRICS countries to develop common approaches to regulating electronic commerce, up to the adoption of an interstate agreement in the future. Considering that the positions of the BRICS countries on this issue may differ, in order to mitigate the contradictions, it would be possible to propose not a one-time, but a gradual reduction in the threshold for duty-free Internet commerce.

Almost all BRICS countries face poor (in terms of delivery time) quality of cross-border B2C e-commerce. In this regard, the BRICS countries could implement a project to exchange best practices in organizing logistics for the delivery of goods within the framework of electronic commerce. Quite often, goods supplied as part of electronic cross-border trade do not meet the declared quality. In this regard, it would be advisable for the departments of the BRICS countries responsible for the development of cross-border trade (ministries of trade, economy, etc.) to create on a temporary basis a special group of experts authorized to discuss possible measures and practices to improve the quality of the supplied goods. The result of the work of this group could be a set of agreed recommendations to the governments of member countries aimed at mutual protection of consumer rights in the segment of Internet commerce and improving the quality of goods in foreign trade.

An interesting direction in the development of modern economies is the formation of new financial technologies. One of the areas of fintech is the use of cryptocurrencies. Currently, the Central Bank of the Russian Federation has a negative attitude towards the introduction of cryptocurrencies into widespread practice. Despite this, given that the BRICS countries (PRC, South Africa) have experience working with cryptocurrencies, it seems appropriate to intensify cooperation within the BRICS on the use of cryptocurrencies. In particular, it would be possible to consider the issues of harmonization of approaches to the use of cryptocurrencies in international settlements within the BRICS; creation of a single exchange of cryptocurrencies of the BRICS countries; the use of cryptocurrencies in international settlements, etc. Russia's participation in such projects will provide Russia with access to the experience of the BRICS countries in regulating the cryptocurrency market and will allow it to keep up with global trends in the development of the use of cryptocurrencies.

The role and significance of the joint activities of the BRICS countries in the formation of the digital environment, as well as in the formation of instruments for supranational regulation of electronic commerce, will be due to the fact that the BRICS countries will undoubtedly be able to take advantage of the results of the synergistic effect from cooperation. The BRICS countries can form such norms of supranational regulation that will allow them to be active participants in the digitalization of the world economy, determining trends and prospects for the development of the global economy.

At the same time, the level and degree of regulation of the digital environment in the BRICS countries varies significantly and is determined by national priorities. Thus, the problem of ensuring national cyber security is essential for the PRC, for which the Law on Cyber Security was adopted in November 20163. As required by the Law, companies are required to store their data locally in offices and provide the authorities with encryption keys upon request. Providers are required to store user passwords and ensure that they are freely transferred to the authorities to ensure access to any data.

A direct consequence of the implementation of the law will be support for national IT companies and indirect restrictions on the activities of Western companies in this sector of the economy. The implementation of the law will allow law enforcement agencies to freeze the accounts of foreign citizens and organizations that are suspected of causing damage to China's state information infrastructure. The state also intends to tighten power control over the Internet space: special police units will be created to ensure cybersecurity. Control over software vendors for critical infrastructure facilities will be strengthened.

China demonstrates consistency in upholding its sovereignty and national security in cyberspace. The main direction of regulation of cyberspace is the tightening of regulations for working in it, which is quite understandable, if we keep in mind the scale of the Chinese Internet market. Tighter regulation of cyberspace will create inconvenience, but is unlikely to entail the voluntary exit of foreign providers from the Chinese market, unless they are forced to leave the Chinese market under pressure from the authorities, as was the case, say, with Google, which abandoned Chinese censorship and exited the Chinese market in 2010.

India
Source: www.orfonline.org

Introduction

At the 14^th Leaders' Meeting of the BRICS (Brazil, Russia, India, China and South Africa) countries held virtually on 23 June 2022, China dwelt on the issue of expanding the group beyond its five existing members to include more emerging economies. It had first raised the subject during the BRICS Xiamen Summit in September 2017. At a time when China-India relations are at a low point, the proposal has raised concerns in New Delhi. As India deliberates its stance on this contentious issue, it is important to understand China's approach towards BRICS.

For China, it is the grand strategy that is the Belt and Road Initiative (BRI) that threads its many engagements: BRICS, the Shanghai Cooperation Organisation (SCO), the Association of South East Asian Nations (ASEAN) where it is not directly a member, the Eurasian Economic Union, and the Regional Comprehensive Economic Partnership (RCEP). Although BRICS as an entity, has not signed any memorandum of cooperation with the BRI, nor has it ever jointly published any statement of intent about participating in China's flagship project, in Chinese strategic thinking, the BRI and BRICS are deeply connected.

President Xi Jinping himself has harped on this notion in his speeches on multiple occasions, such as the 9^th BRICS Business Forum in September 2017^[1] and the 11^th BRICS Leaders' Meeting in November 2019.^[2] In his speech at the opening ceremony of the BRI Forum for International Cooperation in 2017 too, Xi had stated^[3] that China would cooperate with other multilateral development institutions such as the BRICS New Development Bank to support BRI and jointly formulate guidelines to finance development projects.

There exists a huge body of Chinese-language research that analyse the feasibility of cooperation between BRICS and the BRI.^[4] Such literature emphasise the sameness of spirit and concept, principles, and goals of the two: that of reshaping the geopolitical and economic order, and fostering cooperation between mostly non-Western emerging economies. Commerce and trade, infrastructure construction, and people-to-people cooperation are seen as the key points of convergence.

This brief analyses China's domestic discourse on BRICS to understand its strategic thinking towards the grouping. It describes the various formats of expansion being discussed within Chinese strategic circles, and China's modus operandi vis-à-vis other member states to steer BRICS in a direction in line with its interests.

China's Approach towards BRICS: The Link with BRI

Chinese scholars are of the opinion that the "five connectivities"—in policy, infrastructure, trade, finance, and people-to-people—constitute the common way forward for both the BRI and BRICS. They highlight how China has been working towards strengthening the interconnection of economic development strategies of different states along the BRI, particularly the BRICS nations—aligning and integrating BRI and BRICS infrastructure projects, ensuring unimpeded trade, enabling deep integration of financing mechanisms, and pursuing multiple forms of cooperation. The latter include people-to-people and cultural engagements between think tanks, and initiatives in the areas of education, sports, and tourism.

The most significant progress made so far by China in this regard has been the official docking between China's Silk Road Economic Belt (the land part of the BRI) and the EEU (where Russia is the dominant player) in May 2015. A high-speed railway project from Moscow to Kazan is being constructed under this strategic cooperation, funded by the BRICS New Development Bank.^[5] This is the model that China wants to replicate with other BRICS nations as well. In December 2015, South Africa and China signed a memorandum of understanding on jointly promoting the construction of the "Silk Road Economic Belt" and the "21st Century Maritime Silk Road."

The question is why China needs BRICS to promote the BRI. Chinese policymakers believe that although China is the main proponent of the BRI, it needs to avoid both strategic overdraft and direct conflicts with the pillars of the present international order while implementing the strategy.^[6] To improve efficiency in the use of funds and other resources, China, it is argued, should shift from individually leading specific projects to constructing and leading various international institutions and exerting itself through institutional norms.^[7] President Xi emphasised this as well at the 'Belt and Road' International Cooperation Summit Forum in May 2017, saying that the BRI "is not about starting from scratch and reinventing the wheel, but realising strategic alignment and (reaping) complementary advantages (of various existing or new mechanisms)."^[8] Chinese scholars point out that all the BRICS countries have already been made part of the Asian Infrastructure Investment Bank (AIIB), one of China's key financing mechanisms for the BRI. Further, given China's clear dominance in the New Development Bank (NDB), Contingency Reserve Fund (CRA), the AIIB, as well as Silk Road Fund, it is only imperative for it to use these institutions to incentivise more BRICS countries to participate in the BRI, and to lay the foundation of a global financial system for the Chinese currency (RMB) trade settlement.

At the same time, China is aware that the BRI has provoked extensive discussion around the world. It has been interpreted differently by different countries and has even drawn suspicion and caution in certain quarters. China is aware that to implement the BRI smoothly, it needs an additional front that is less controversial and more acceptable to the international community at large, and in particular, to developing countries.

The overall idea is to pool the strength of influential external forces, especially the best performing emerging economies, to facilitate the construction of the BRI; from such perspective, BRICS is the key international mechanism that China seems to be banking upon.^[9] After all, the BRICS countries are the key representatives of the developing world, and have a broad radiating role in their respective regions. They are often seen in China as the nodal countries that can take a lead in connecting and driving the economic development of other smaller/medium-size nations along the Belt and Road, help China expand its opening up agenda from the coastal areas to the interior, address its domestic surplus production capacity, deepen the influence of 'Made in China' across the regions and thereby assist in promoting and implementing the Belt and Road Grand Strategy. Therefore, in the Chinese assessment, if BRICS and BRI can be strategically aligned,^[10] it will not only bolster China's national interests but will also help shift the international order further in China's favour.^[11]

However, China is aware that a complete strategic docking between BRI and BRICS is unlikely in the short term, due to various issues between the BRICS member states such as asymmetry in economic power, the lack of mutual trust, and internal leadership competition. India and Russia, for instance, are strategic fulcrum countries along the Belt and Road, but both have misgivings, to varying extents, regarding the BRI. Thus China believes it should neither rush for BRICS's official support for the BRI, nor hype the issue up. Instead, it should ensure that the two mechanisms develop relatively independently of each other and leverage their unique advantages, while preventing them from conflicting. In the words of Zhang Weiwei, Distinguished Professor of Fudan University, BRICS and the BRI should function simultaneously as two levers, two thrusts in China's one big chess game, promoting a new type of globalisation, building a new international order, and driving the global governance system decisively in China's favour.^[12]

Some Chinese scholars are of the opinion that under the present circumstances China should use BRICS as a tool to hedge against risks facing the BRI.^[13] They argue that if and when the US and the West actively respond to China's BRI, and even sacrifice some of their vested interests to cooperate with China in promoting the reform of the international order in China's favour, the political significance of BRICS cooperation will automatically weaken. However, when the West ups the ante against China, and takes radical measures to hinder the development of BRI, the political-economic significance of BRICS cooperation rises for China. ^[14]

The Timing of China's Expansion Push

Chinese strategists believe that expanding BRICS will bring both challenges and opportunities. There may be new challenges in terms of declining organisational efficiency due to the increase in the number of members. However, the opportunities might just surpass the challenges. Expansion can be a short-cut to rapidly increasing the strength and international influence of BRICS, coping better with the ongoing economic slowdown facing the grouping^[15] and making up for the limited cooperation, both economic and strategic, among the current member countries.^[16] It would also become easier to get these new members to coordinate their positions with China on global and regional issues, thereby pushing the Chinese agenda more efficiently through BRICS to G20 to the greater global governance system.

The growing chorus in China is that internally, BRICS has started showing signs of weakness, is in retreat, and is lacking coherence in its actions. By attracting new members and replenishing it with fresh blood, China hopes to inject new impetus into it. It believes that the economic performance of BRICS countries, including China, in the past seven or eight years has deteriorated, and "golden BRICS" have turned into "stone BRICS"^[17] (金砖变成石砖). The era of rapid growth of BRICS seems to have passed for member countries Brazil, South Africa, and Russia. Brazil's gross domestic product (GDP) growth rate was negative in 2015 and 2016, increased to 1-2 percent in 2017-19, before dropping below zero again with the COVID-19 pandemic. Meanwhile, South Africa's fell from 3 percent in 2010 to barely 0.1 percent in 2019, before plunging into negative territory once the pandemic struck. So too, did Russia's GDP grow barely 0.7 percent in 2014, turned negative in 2015, recovered slowly to 2.8 percent in 2018, before contracting again in 2020.^[18] (All three, however, have shown some compensatory recovery in 2021.)

Chinese analysts maintain that the economic distress in Brazil and South Africa has been causing domestic political changes that are weakening their association with BRICS and their enthusiasm to cooperate. Both countries are unwilling to prioritise the BRICS agenda (read: Chinese agenda of reforming global governance in China's favour through its BRI grand strategy) as they fear it could weaken their foreign policy flexibility and thereby jeopardise their national interests.^[19]

The pandemic and the Russia–Ukraine war have compounded the situation. The international competitiveness of the BRICS countries has lost traction, while the economies of the United States (US) and Europe are showing better signs of recovery. The US is still at the forefront of technology and industry. It is trying to regain its leadership of the global economy.^[20] With the overall strength of the BRICS countries declining and facing heightened competition from traditional developed country-led cooperation mechanisms, China feels that limiting BRICS to its five members will further reduce its overall global influence and discourse power, which is detrimental to its interest.

Some Chinese observers also feel that unlike the G7^[a] where all members are highly developed nations, China's economic weight within BRICS far surpasses that of the others combined. They fear that the contradictions between developed and developing nations, between G7 and BRICS, may eventually come down to a contradiction between G7 and China. By absorbing new emerging market countries as BRICS members, this threat can be countered to a certain degree.^[21]

The external factor behind China's interest in BRICS expansion is the intensifying China–US competition. Chinese observers recall how, when Barack Obama was US president, some political analysts had proposed a 'G2', or increased cooperation between the world's two biggest economies, the US and China. This had weakened the significance of BRICS for Chinese foreign policy. However, under the Donald Trump presidency, G2 quickly turned from high-level cooperation to high-decibel confrontation, and a larger, better coordinated BRICS (representing the broader developing world) became China's priority. It was in 2017, in the first year of Trump's presidency, that China, for the first time, proposed an expanded BRICS. Later, despite Joe Biden coming to power after defeating Trump, Chinese observers believe that US policy towards China has hardly changed, and that the 'new Cold War'—initiated during the Trump era—has instead been taken to a higher level.

In the backdrop of the Russia–Ukraine war, Europe has been dragged into a new Cold War environment, with a cohesive western bloc being formed,^[22] comprising the US and Europe. The war, Chinese analysts note, has become a glue^[23] that effectively binds the US and Europe. They also argue that in Asia, the US is driving an increasing number of countries—Japan, Australia, India, New Zealand, and South Korea—into 'smaller circles' like the Quadrilateral Security Dialogue (QSD), the Indo-Pacific Economic Framework (IPEF), the Australia-United Kingdom-United States (AUKUS) pact, and even into North Atlantic Treaty Organization (NATO).^[b] All these at a time when the BRI is facing a plethora of challenges: intensifying geopolitical competition in the form of hedging strategies from the developed world like the Blue Dot Network and Build Back Better World (B3W); funding shortfalls; delays due to the pandemic; economic recession in participating countries; and bad publicity over issues of neo-colonialism and debt-trap. Under such circumstances, if China does not expand its circle of friends, it might risk appearing passive or falling behind in competition with the US.

Of particular concern to China is how amidst heightened geopolitics, trade conflicts, the epidemic, and industrial upgrading—the global industrial chain is being restructured at an accelerated pace, with efforts being made to replace the existing 'US + West + China' industrial model with newer models, particularly a 'US + West + India' one.^[24] They believe this is aimed at isolating China and undermining its power and position in the emerging fourth wave of industrialisation. It is all the more reason for China to promote "a community of supply chains interests,"^[25] by getting other emerging economies to join the BRICS supply chain (read: China's supply chain). By embedding these countries in a China-led supply chain, potential competitors like India can be neutralised, and any effort to replace China in the current round of reorganisation of supply chains can be thwarted.

The Models for China's BRICS Plan

Chinese strategists are exploring various models for expanding BRICS.

• 'BRICS + new members'

The economic strength of a country and its development potential (i.e. large or medium-size countries showing rapid economic growth), are no longer the sole criteria for China while considering potential BRICS members. Political and identity commonality in the context of China-US competition, and geographic and locational advantages (issues that are otherwise central to the BRI agenda) have emerged as important points of reference.^[26] Writings by Chinese scholars highlight that China is particularly keen on giving priority to emerging 11 countries (E11) from among the G2O members,^[c] (BRICS + Argentina, Indonesia, South Korea, Mexico, Saudi Arabia and Turkey), especially those whose strategic choices matter amidst the US-China game and are poised to actively participate in the BRI.

For instance, China is supporting Argentina's bid to join BRICS. Argentina joined the BRI in February 2022 on the grounds that it wants to reduce dependence on the IMF and the United States. China-Argentina cooperation under the BRI, in fields like nuclear energy, agriculture, and critical minerals has already alarmed Washington.^[27] It is also in talks with China to not only purchase China-Pakistan-developed Xiaolong fighter jets but also to absorb its production line, evolving into a regional supplier of Chinese fighter jets and other military equipment to countries in the region such as Uruguay, Peru, Ecuador, Bolivia, Venezuela and Cuba.^[28] Some Chinese scholars believe that Argentina's accession to BRICS will further motivate countries such as Brazil, Mexico and Colombia to expedite their signing into the Belt and Road Memorandum of Understanding.^[29]

• 'BRICS + region'^[30]

In the Chinese assessment, the 'BRICS + region' model provides another possible means of bringing more emerging economies into the BRICS fold, while avoiding internal divisions in the developing world. In this domain, China prioritises the 'BRICS + Asia' cooperation mechanism – 'BRICS + ASEAN' on the one hand, and 'BRICS + Bay of Bengal' on the other, thereby integrating BRICS more closely with the Southeast Asian countries as well as with the Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC) and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) nations. The latter is particularly aimed at countering India's reticence to endorse the BRI, while seeking its cooperation through either coercion (i.e., using other member states of the said groupings as bargaining chips to pressure India to cooperate) or deception (i.e., temporarily ignoring the BRI banner).^[31]

China also wants to deepen 'BRICS + Africa', 'BRICS + South America'and 'BRICS + Eurasia' formats along similar lines to further promote infrastructure interconnection and regional economic integration between China and these regions under the BRI. The 'BRICS + region' model was initiated at the summit in Durban, South Africa, in March 2013, but Chinese observers note that it has yet to achieve significant progress in the absence of a general consensus and institutional norms.[32]

• 'BRICS + major international organisations'

BRICS countries play a dominant role in multilateral organisations in their respective regions. China wants to use the BRICS platform to establish links and influence policies of these key regional organisations, including the African Union in Africa, the Arab League in West Asia, the SCO in Central Asia, the South Asian Association for Regional Cooperation (SAARC) in South Asia, and ASEAN in Southeast Asia. It wants BRICS, especially the BRICS New Development Bank, to strengthen cooperation with the IMF, the World Bank, and the World Trade Organization. This will enable China, through BRICS, to strengthen its international leadership, play a bigger role in the formulation of international rules, and influence the overall global governance mechanism.^[33]

China-Russia Convergence Within BRICS

How does China view each member state within BRICS? It sees itself as the 'leading power centre' of the mechanism, 'the dominant power' or the 'hub or core', with the greatest strength and ability to determine the grouping's future course.^[34] India, the only economy among the five that is still doing well, is often considered indispensable in terms of expanding the group's economic scale, market capacity, and discourse power and influence.^[35] However, despite its centrality to the BRICS mechanism, Chinese observers call it the group's weakest link. There are two reasons: its fraught ties with China, and its rapidly developing ties with the western world. On the other hand, Brazil and South Africa, given their limited strength and geographical distance from the other member states, are often seen as 'free-riders'.^[36] Russia, meanwhile, is understood to be both dependent on China and wary of it.

Given the backdrop, the Chinese strategy is clear: to undercut the role and agency of India, Brazil and South Africa, if possible winning over the last two, using its financial heft.^[37] Meanwhile, it seeks to utilise China-Russia ties as the bedrock for further developing BRICS in a direction that is in sync with its broader goals and objectives.^[38]

Chinese strategists believe that among the BRICS countries, Russia and China have the strongest motivation to promote the grouping, though some differences remain between the two about the speed and direction of its institutionalisation. Russia emphasises the political significance of BRICS cooperation, while China's focus is on economics followed by politics. Russia prioritises deepening and strengthening the cohesion and organisation of the mechanism, while China primarily wants to expand its scale—its influence and overall discourse power in international affairs and global governance.^[39] However, China believes that its differences with Russia are not completely irreconcilable and the two can better coordinate their positions.

Russia of late, due to changes in the international situation and its confrontation with the West, has become more receptive to the Chinese proposition of expanding BRICS. It has become more open towards accepting other regional powers as 'dialogue partners' or 'observer countries'. Its key concern is whether such expansion will meet its strategic demands and strengthen its diplomatic position vis-à-vis the US and West Europe.^[40]

Many Chinese scholars believe that it is also time for China to support Russia's proposal to establish a permanent BRICS secretariat, and push for formulating rules and regulations, particularly to restrain members like India from leaning any further towards the West. They argue that the permanent institutions established through BRICS cooperation can be incorporated into the unified institutional framework of the BRI at an appropriate time.^[41] However, they caution such plans need not be rushed, and China must adopt a step-by-step approach towards establishing a permanent BRICS Secretariat ^[42]

In the short term, the current 'forum' format of BRICS with its flexible mode of operation suits China. Unlike the G7, the BRICS countries have many inherent contradictions among them, and coordinating a permanent institution will be difficult. However, in the medium term, China wants to make BRICS an economic cooperation community, on the basis of which a BRICS executive committee can be set up, as a dry-run for the future official secretariat of BRICS. In the long term, it plans to establish a permanent BRICS secretariat, addressing the current weaknesses of the BRICS mechanism, particularly the lack of cohesion, and thereby ensure concrete implementation of the consensus reached at the leaders' summits. Some Chinese scholars^[43] even advocate a China-Russia-India Trilateral Cooperation Organisation within the overall framework of BRICS. The body will be a deputy-minister-level permanent entity that will unify and coordinate positions, solve problems, deepen cooperation, and most importantly, frustrate any US attempt to win over India.^[44]

Despite the seemingly growing convergence of interest between Russia and China within the BRICS format, the 'Russia-optimism' shared by a section of Chinese strategic community needs to be viewed with caution. Overall, China's strategic community remains particularly suspicious of Russian actions and their impact on China. For instance, in 2016 as Russia invited Greece to join the BRICS Bank, there were angry commentaries in the Chinese internet accusing Russia of misusing China's generosity to achieve its (Russian) strategic goals. One Chinese author described the situation as "Russia treating guests to dinner, and China having to foot the bill."^[45] More recently, there were heated debates in the Chinese internet, including strong objections, as Russia proposed to form a new G8 (BRICS+ Indonesia, Mexico, Iran, and Turkey) right after China's BRICS expansion proposal at the 14th BRICS Summit. Possibly after a Chinese push-back, Russian Foreign Minister Sergey Lavrov had to retract on the decision, saying Russia no longer needs to set up a new group as it is already part of EEU, SCO, BRICS, and G20, among others.^[46]

Conclusion

In Chinese strategic thinking, the BRI and BRICS are deeply interconnected. BRICS, comprising the world's best performing emerging economies, is a less controversial platform and more appealing to the developing world. It is often seen as the key international mechanism that can act as the second front or as the "leading geese", aiding and advancing China's BRI objectives. As China-US rivalry intensifies and the BRI faces a plethora of challenges, BRICS is increasingly gaining significance for China.

Within the grouping, China sees itself as the 'core' of BRICS, while India as its weakest link. Brazil and South Africa are often dismissed as "free-riders", while Russia is considered the main tool to advance Chinese interests within the BRICS framework. China is aiming to undercut the role and agency of India, Brazil and South Africa—if possible, winning over the last two using its financial heft—while utilising China-Russia ties as the bedrock for further developing BRICS in a direction that suits their interests.

As noted in this brief, however, it is not always easy for China to implement such a strategy. Brazil and South Africa, with their deteriorating economic performance and unstable domestic political situations, are unwilling to commit much to China and thereby compromise on their foreign policy flexibility. On the other hand, there is a constant game between China and Russia over who will use whom, to further its self-interest.

It is against this backdrop that China is proposing a BRICS expansion. Economic strength and development potential are not the sole criteria for China while considering potential BRICS members. Political and identity commonality in the context of China-US competition, geographic and locational advantages, willingness to support the BRI, are seen as important points. India needs to accurately grasp the geopolitical shifts taking place within BRICS and deftly navigate the complex dynamics between the member states to safeguard its own interests within the grouping and avoid being drawn passively into China's Great Game.

Antara Ghosal Singh is a Fellow at ORF's Strategic Studies Programme.

Endnotes

^[a] G7 members are Canada, France, Germany, Italy, Japan, the UK and the US.

^[b] QSD members are the US, Japan, India and Australia; IPEF members are Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, Australia, New Zealand, the US and Vietnam. South Korea and Japan participated in a NATO summit in June 2022 for the first time, and are seen as NATO's 'partners across the globe'.

^[c] The G20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union.

[1]"Full text of President Xi's speech at opening ceremony of BRICS Business Forum", FMRC.gov.cn, September 3, 2017.

^[2]"Xi Jinping Attends the 11th BRICS Summit and Delivers an Important Speech", FMRC.gov.cn, November 11, 2019.

^[3] "Full text of President Xi's speech at opening of Belt and Road forum", Xinhua, April 15, 2017.

^[4] Wang Weiwei, Lyu Zhiling, "Analysis of the Cooperation Path between BRICS Cooperation Mechanism and the Belt and Road Initiative," 石河子大学学报(哲学社会科学版) 2019,33(06),1-7

^[5] Li Xing Gengjie, Cheng Zhijie," "一带一路"框架下的金砖合作机制与中俄关系" (The BRICS Cooperation Mechanism and Sino-Russian Relations under the Framework of the " Belt and Road"), Foreign Theoretical Trends 2019, (04), 115-126

^[6]Li Xing Gengjie, Cheng Zhijie, "一带一路"框架下的金砖合作机制与中俄关系" (The BRICS Cooperation Mechanism and Sino-Russian Relations under the Framework of the " Belt and Road")

^[7]Li Yiping, Fu Yuheng, "Leadership Competition in International Cooperation: Strategic Alignment with BRICS Countries by the "Belt and Road" Initiative"", Southeast Academic 2019, (03), 118-129+248

^[8]"Full text of President Xi's speech at opening ceremony of BRICS Business Forum", FMRC.gov.cn, September 3, 2017.

^[9]Li Xing Gengjie Cheng Zhijie,"一带一路"框架下的金砖合作机制与中俄关系(The BRICS Cooperation Mechanism and Sino-Russian Relations under the Framework of the " Belt and Road"), Foreign Theoretical Trends 2019, (04), 115-126

^[10] Wu Qiaoyikang, Wu Xingnan,""一带一路"与金砖合作的对接路径", (The Docking Path of "One Belt, One Road" and BRICS Cooperation), 学习月刊, 2019,(09),17-19

^[11]WANG Wei-wei LYU Zhi-ling ,"金砖合作机制与"一带一路"建设的合作路径分析" (Analysis of the Cooperation Path between BRICS Cooperation Mechanism and the Belt and Road Initiative), 石河子大学学报(哲学社会科学版) 2019,33(06),1-7

^[12] Zhang Weiwei, ""金砖"加"一带一路"，我们这盘大棋就活了"(BRICS+, "One Belt, One Road": our big chess game is alive), Guancha.com, September 11, 2017.

^[13] "国际合作中的领导权竞争:以"一带一路"倡议与金砖国家合作的战略对接为" (Leadership Competition in International Cooperation: Taking the Strategic Alignment of the Belt and Road Initiative and BRICS Cooperation as an Example), 东南学术 2019,(03),118-129+248

^[14]"国际合作中的领导权竞争:以"一带一路"倡议与金砖国家合作的战略对接为" (Leadership Competition in International Cooperation: Taking the Strategic Alignment of the Belt and Road Initiative and BRICS Cooperation as an Example).

^[15]Wang Xueren, "Research on the Expansion of BRICS Countries", South and Southeast Asian Studies. 2020(03) Page:22-32

^[16]Jin Cangrong, "金砖国家之间首先要搞好团结" (The BRICS countries must first improve their unity), zgzzs.com.cn , September 19, 2017.

^[17] "新金砖峰会：中国就应脱颖而出" (New BRICS summit: China should stand out), Netease, June 24.

^[18] "新金砖峰会：中国就应脱颖而出" (New BRICS summit: China should stand out).

^[19] Antara Ghosal Singh, "Why China wants to expand BRICS", July 21, 2022,

^[20] Antara Ghosal Singh, "Why China wants to expand BRICS"

^[21] "推动金砖+，意味着中国将开启外交新周期吗？", (Does the promotion of BRICS+ mean that China will start a new cycle of diplomacy?), Sohu.com, July 12, 2022.

^[22] "推动金砖+，意味着中国将开启外交新周期吗？", (Does the promotion of BRICS+ mean that China will start a new cycle of diplomacy?)

^[23] "推动金砖+，意味着中国将开启外交新周期吗？", (Does the promotion of BRICS+ mean that China will start a new cycle of diplomacy?)

^[24] "China, India and the contest for global supply chains", China-India Brief #206 June 18, 2022 – June 30, 2022, Centre on Asia and Globalisation, Lee Kuan Yew School of Public Policy, June 30, 2022,

^[25]"金砖国家将扩员，美国拉拢印度搞破坏，印度能否上套？", (The BRICS countries will expand their membership, and the United States will attract India to sabotage. Will India be able to do it?), Netease, June 21, 2022.

^[26]Wang Xueren, "Research on the Expansion of BRICS Countries", South and Southeast Asian Studies. 2020(03) Page:22-32

^[27] Yang Jing, "中国与阿根廷共建"一带一路"研究：进展、驱动因素与挑战" (Research on the Joint Construction of the "Belt and Road" between China and Argentina: Progress, Driving Factors and Challenges), 西南科技大学学报(哲学社会科学版). 2022,39(04)

^[28] "中国战机要在南美站稳脚跟！阿根廷：想成为中国战斗机地区代理商", (Chinese fighters must gain a firm foothold in South America! Argentina: Want to become the regional agent of Chinese fighter jets), qq.com, June 24, 2022.

^[29]"Argentina officially joins BRI in major boost for China-Latin America cooperation", Global Times, February 6, 2022.

^[30] Li Feng, "创新"金砖+"模式扩大金砖国家合作", 中国经贸导刊" (Innovating the "BRICS+" Model to Expand BRICS Cooperation), 2017,(19),59-61

^[31] Wang Zhuo, "金砖国家组织视域下中印关系问题研究" (Study on Sino-Indian Relation from the Perspective of BRICS), 长沙理工大学学报(社会科学版), 2022(03) Page:98-107

^[32]Zhao Chunzhe, "Improve the thinking and path design of the BRICS cooperation platform", 全球化2018, (11),81-93+134-135

^[33] Li Feng, "创新"金砖+"模式扩大金砖国家合作", ( Innovating the "BRICS+" Model to Expand BRICS Cooperation), 中国经贸导刊, 2017,(19),59-61

^[34]Cheng Zhijie, "The Balance of Intensification and Expansion: The Key to Promote the Development of BRICS", Indian Ocean Economic and Political Review, 2020, (02), 118-137

^[35] Chen Lijun; Lu Sen, "Indian Involvement in Sino-Indian Multilateral Cooperation: A Stag Hunt Game Strategy?", South Asian Studies. 2021(03) Page:56-86+156-157

^[36] "国际合作中的领导权竞争:以"一带一路"倡议与金砖国家合作的战略对接为" (Leadership Competition in International Cooperation: Taking the Strategic Alignment of the Belt and Road Initiative and BRICS Cooperation as an Example), 东南学术, 2019,(03),118-129+248

^[37] "国际合作中的领导权竞争:以"一带一路"倡议与金砖国家合作的战略对接为" (Leadership Competition in International Cooperation: Taking the Strategic Alignment of the Belt and Road Initiative and BRICS Cooperation as an Example)

^[38]Li Xing Gengjie Cheng Zhijie, "一带一路"框架下的金砖合作机制与中俄关系(The BRICS Cooperation Mechanism and Sino-Russian Relations under the Framework of the " Belt and Road"), Foreign Theoretical Trends, 2019, (04), 115-126

^[39]Cheng Zhijie, "The Balance of Intensification and Expansion: The Key to Promote the Development of BRICS", Indian Ocean Economic and Political Review, 2020, (02), 118-137

^[40]Sun Yanxiao, "金砖国家的扩容:基础、路径与风险" (The BRICS Expansion: Foundation, Path and Risks), Russian Studies 2019, (01), 56-85

^[41] "国际合作中的领导权竞争:以"一带一路"倡议与金砖国家合作的战略对接为" (Leadership Competition in International Cooperation: Taking the Strategic Alignment of the Belt and Road Initiative and BRICS Cooperation as an Example), 东南学术2019,(03), 118-129+248

^[42]Zhao Chunzhe, "Improve the thinking and path design of the BRICS cooperation platform", 全球化2018, (11),81-93+134-135

^[43] Wang Zhuo, "金砖国家组织视域下中印关系问题研究" (Study on Sino-Indian Relation from the Perspective of BRICS), 长沙理工大学学报(社会科学版), 2022(03) Page:98-107

^[44]Zhao Chunzhe, "Improve the thinking and path design of the BRICS cooperation platform"

^[45] "一带一路下还需金砖国合作机制吗" (With BRI in place, is BRICS cooperation mechanism still needed?), Sohu.com, May 21, 2016.

^[46] Zhang Jiadong, "中国提议金砖国家扩员，阿根廷愿意加入，这比俄方的八国集团靠谱" (China proposes the expansion of BRICS countries, and Argentina is willing to join, is Russia's G8 more reliable than this?), Baijiahao, June 17, 2022.

Russia
Source: infobrics.org

Alexandra Gorshkova, RUDN, participant of the VI BRICS International School – special for InfoBRICS

Russian-Chinese relations have a very long and eventful history. The states have gone through a lot together: conflicts, truces. Now Russian-Chinese relations are flourishing like never before, which is why it is so important to pay special attention to them. This includes politics, economics, and humanitarian cooperation. And they are also connected by an organization like BRICS, which helps countries to evolve in terms of economy and diplomacy together. In my essay, I will talk about how BRICS has influenced the diplomatic relations between Russia and China.

At first, let's take a look at prehistory: The first diplomatic agreement was registered as a result of the Albazin War of 1685-1686. Nerchensky peace of 1689, which was signed by Fyodor Golitsyn. According to the Aigun Treaty of 1858 the territories along the left bank of the Amur River were joined (the Usuri Territory was in common ownership). In the Beijing Treaty of 1860, the accession of the Usuri Territory, and the Left-Bank Amur was prescribed. In 1891, the construction of the Trans-Siberian began. In 1897-1903 the CER was built. In 1939, a trade agreement was concluded between the USSR and China. Accordingly, all these steps led to the building of trusting relationships, if not for one "but": in 1969 there was a conflict with China on Damansky Island on the Ussuri River. There was an armed clash of border troops. Reforms have begun in China. The USSR accused the PRC of counter-reformation. Only after the death of Mao Zedong in 1976 and L. I. Brezhnev in 1982 did relations begin to gradually recover. Under Yu. V. Andropov and K. U. Chernenko, negotiations began on the normalization of relations between the USSR and the PRC. Relations were finally restored under M. S. Gorbachev, a symbol of which was his visit to China (the first in 30 years after N. S. Khrushchev) in May. Relations between the two states moved from simple normalization to good neighborly partnership, and in 1996 to strategic interaction.

The prerequisites for the creation were discussed back in 2001 at a meeting of the SCO organization. In September 2006 (during the 61st session of the UN) a meeting of the foreign ministers of the four countries took place in New York. The first meeting of the BRIC heads of state took place on July 9, 2008th in Toyako-Onsen. A full-format meeting took place in Yekaterinburg on June 16, 2009.

Activity in bilateral relations can be noted since 2014, when the Russian establishment started talking about the "Eastern turn in the country's foreign policy." It is possible to note the joint positions of the countries on international platforms, both countries made almost identical statements on such issues as the situation in Afghanistan, the development of nuclear programs in the DPRK and the Islamic Republic of Iran, as well as on the Ukrainian crisis. The issue of joint formation in the Asia-Pacific region of a new inclusive security architecture, involving the participation of all countries, was not overlooked either.

In addition, during this period, the number of contacts in the multilateral format increased significantly: during the BRICS summit (annually), in Dushanbe during Russia's negotiations with China and Mongolia (2014), in Beijing during preparations for the next APEC summit (2014), at the G-20 Hangzhou Summit in China (2016), etc.

Inter-ministerial cooperation and intensification of interaction between the departments of the two countries is developing after the October 2014 meeting of the heads of government in Moscow. As a result of the meeting, agreements on cooperation in the field of law and order and legality, as well as in the field of justice, are being implemented, which corresponds to the common efforts to combat drugs and terrorism.

The level of trust in relations between the Russian Federation and China within the framework of BRICS makes it possible to solve a number of strategic tasks in the international sphere. Thus, in September 2010 in Beijing, the President of the Russian Federation D.A. Medvedev and Chairman of the Central Committee of the Communist Party of China Hu Jintao announced a joint initiative to strengthen security cooperation in the Asia-Pacific region. In the conditions of the current economic crisis, the states of the Asia-Pacific region are the main drivers of the development of the world economy. On February 28, 2017, the United States, France, and the United Kingdom proposed sanctions against Syria, unfoundedly accusing Syrian government forces of using chemical weapons. Russia and China exercised their veto power during the UN Security Council vote on a draft resolution on sanctions against the Syrian leadership for the use of chemical weapons.

The Russian Federation and the People's Republic of China, actively cooperating within the framework of a new model of international relations with countries with different socio-political systems, thereby create pillars for a new international order. China and Russia have repeatedly indicated that they do not intend to create a military alliance in any form, and their relationship of comprehensive strategic cooperation and partnership is not directed against a third party.

Today, both China and Russia are making efforts to increase their national power, develop the economy and improve the lives of the people. There is a comprehensive deepening of business cooperation between China and Russia in trade, economic, energy and other fields.

China and Russia have repeatedly indicated that they do not intend to create a military alliance in any form, and their relationship of comprehensive strategic cooperation and partnership is not directed against a third party. The two countries make up a wonderful political union. They follow a similar political line and often vote for the same decisions.

After doing research, I found out where else, besides BRICS, the diplomacy of Russia and China intersects.

• UN (1945) - Within this organization, both countries vote approximately equally for a particular project, and propose joint adjustments for the organization.

• IAEA (1957) - an international organization for the development of cooperation in the field of peaceful use of atomic energy.

• ASEAN (1967) is an international organization within which cooperation takes place in three areas: economic, political, and cultural.

• APEC (1989) - Asia-Pacific Economic Cooperation is an interstate forum created to promote economic growth, cooperation, trade and investment in the Asia-Pacific region. defining rules for regional trade and investment.

• WTO (1995) - in December 2001, China joined the World Trade Organization.

• SCO (2001) - an organization that ensures regional security.

But now it is worth talking about the political challenges faced by Russia and China. There are several areas in which these phenomena can be observed. First of all, this is politics, and more specifically, the clash of international interests and the formation of alliances and organizations that have disagreements. From an economic point of view, sanctions come to the fore, which, unfortunately, hinder cooperation due to the fact that China's trade with Russia can worsen relations with the United States, and the latter will impose sanctions on China in this regard. Security issues: countries are building up the military-industrial complex, which can turn into a real military threat. and the issue of global governance: in the current modern situation, it is very difficult for leaders of countries to gather at the negotiating table and come to any mutual solution.

Furthermore, the new US policy to "drive a wedge" is to exert maximum pressure on China over bilateral relations with Russia during the Ukrainian crisis. For example, if earlier the United States tried to tempt Russia to go against China, now it has outgrown the threat towards the latter, thereby forcing Beijing to join the sanctions.

The economic sanctions imposed on Russia are indeed exacerbating the situation. On the one hand, they give a certain impetus to Chinese-Russian cooperation, but on the other hand, Beijing is in a difficult situation, not knowing what will happen tomorrow, what if sanctions are also imposed against China? This may lead to secondary sanctions against Chinese financial institutions and companies, which will limit their further activities around the world, including in America and Europe, and also call into question the promotion of their economic and commercial interests.

2022 becomes a new page for China as the 20th Congress of the Communist Party of China took place. Xi Jinping has been elected to a third five-year term. Accordingly, 2022 will be a new chapter for both Russian-Chinese relations and BRICS. Most likely, this will serve for new challenges that will have to be fought.

However, we can say that BRICS is an opposition to hegemonism and the creation of a unipolar world because the position of the association is to maintain world peace. Xi Jinping also spoke out. that it is necessary to abandon the zero-sum game in support of the general unification of countries against the struggle against hegemonism. He proposed to jointly build a mutually beneficial, balanced, coordinated, inclusive, joint, mutually beneficial and common prosperous basis for global development, and announced important steps taken by China to implement global development initiatives. It should be emphasized that the "BRICS potential" in the area of innovation and development is disclosed. Xi Jinping pointed out that there is a need to seize the opportunity of the new round of scientific and technological revolution and industrial transformation, promote the global flow of innovation and development factors, and help developing countries promote the development of digital and accelerate green economy. Transformation. Build a strong "BRICS line of defense" and build a community of common future for humanity in the field of medical and health care. Xi Jinping stressed the need for active cooperation in the fight against COVID-19 and supplying more anti-epidemic drugs to developing countries to defeat the epidemic as soon as possible. In March, the BRICS Vaccine R&D Center was successfully opened, creating an integrated platform for collaborative R&D and production of vaccines in developing countries. The meeting agreed on four points, including promoting pragmatic cooperation to fight the pandemic and improving the global system of governance in this area, which naturally facilitates interaction to deal with COVID-19 and a community of common future for mankind united in the field of protection.

As the "powerful mover" of the BRICS countries, China and Russia play an important leading role in ensuring the gradual development of BRICS cooperation. Russian President Vladimir Putin personally attended these three events and admitted in his speech that the leading role of the BRICS countries is more important than ever in BRICS Presidency. Today, the development of the international structure and world order is strongly influenced by world processes, including the Ukrainian crisis, the struggle between world powers and the worst epidemic in a century. According to this situation, China and Russia should strengthen strategic cooperation, show firm will, determine the constructive role of "China-Russia relations", help the BRICS countries maintain strategic independence on pressing issues of the international and regional agenda, and support construction. "Belts and Roads". Challenge hegemonism and practice true multilateralism.

With the active support and participation of Russia and other BRICS countries, as part of the "Year of China", more than 170 events in various fields with 37 major results are planned, which will be an absolute record for the Year of China. Quantitative and qualitative development of BRICS cooperation. In the first half of 2022 alone, more than 20 ministerial-level meetings were held and representatives from more than 50 countries outside the association participated in various activities in the form of BRICS+. A series of exciting events with cultural and humanitarian interactions were successfully held, including the "BRICS Forum of Political Parties, Think Tanks and Civil Organizations". Around 80 conferences and events will take place by the end of the year in various fields, including communications, intellectual property, anti-corruption, employment, think tanks and the mass media.

In conclusion, I want to say that Russian-Chinese diplomatic relations in context of BRICS evolve over the years. BRICS is a great prospect for the future, as the countries of this organization support each other and develop together, which gives us hope for a bright economic and political future and prosperity.

Russia
Source: tass.com

"It is necessary to strengthen coordination and cooperation between the SCO member nations and within BRICS, to defend regional and global peace and stability," Chinese Foreign Minister Wang Yi said

BEIJIING, November 27. /TASS/. China calls for strengthening coordination within the Shanghai Cooperation Organization (SCO) and BRICS (Brazil, Russia, India, China, and South Africa), Chinese Foreign Minister Wang Yi said on Sunday at a meeting with Russian Ambassador to China Igor Morgulov.

"It is necessary to strengthen coordination and cooperation between the SCO member nations and within BRICS, to defend regional and global peace and stability," the Chinese foreign ministry quoted him as saying.

The Chinese top diplomat pledged that his country will maintain contacts with Russia at a high level and stressed that the two countries should help each other in their national revival and development.

Singapore
Source: asiatimes.com

By Jan Krikke

For the last 500 years, a new dominant currency – or reserve currency – has emerged in Europe roughly every hundred years. During the colonial era, Portugal, Holland, France and England all had their turn. The change from one dominant currency to the next was typically accompanied by wars and social upheaval.

For much of the 20th century, the US dollar was the world's dominant currency. History suggests that the dollar is approaching the end of its natural cycle. This time the challenge comes from Asia. China is leading an effort to develop a parallel monetary system that will split the global financial system.

China has powerful allies. The BRICS countries, Brazil, Russia, India, China and South Africa, represent 41% of the global population. The so-called "de-dollarization coalition" has started using currency swaps to bypass the dollar system. The next step could be a BRICS settlement currency based on a basket of the currencies of participating countries.

The de-dollarization trend is not limited to BRICS. Countries in Africa, Latin and Central America, and the Middle East are likely participants. Saudi Arabia has indicated it may join the BRICS coalition.

Fifty years ago, the Saudis partnered with the US to create the petrodollar. This time they could be instrumental in creating a petro-BRICS currency. Other OPEC nations are likely to follow, which could lead to a repricing of the $7 trillion oil market.

Black gold

Despite decades of warnings about global warming and the investment of billions of dollars in green technology, the global addiction to fossil fuels continues. Oil got its moniker of "black gold" for good reasons. The wealth of a country is directly related to the amount of oil it consumes.

A 42-US-gallon (159-liter) barrel of oil that typically sells for less than $100 compresses the energy equivalent of 25,000 man-hours of labor. That is the equivalent of 12 people working an entire year before the Industrial Revolution. Virtually the entire global supply chain relies on diesel fuel.

BRICS brings together the world's largest importers of energy, China and India, with the world's largest producers of energy, Russia and Saudi Arabia. If candidate members were added, BRICS would dominate not only the global oil market but numerous other commodities such as wheat, fertilizer, industrial metals, uranium and gold.

BRICS nations have several reasons for reducing their reliance on the dollar system. As long as oil is traded in dollars, the US is a virtual toll booth for the global oil market – and most other commodities. Moreover, the US has enormous sway over the global economy.

When the US Federal Reserve raises interest rates, the dollar appreciates against the currencies of other countries, making the import of oil and other essentials more expensive. Similarly, countries and companies with dollar-denominated loans pay more in their own currency to service their debt.

BRICS countries are also concerned about the decreasing value of the dollar. The 2008 financial crisis and the 2020 Covid crisis led to massive money-printing that added trillions to US debt. Since 1971, when the US decoupled the dollar from gold, the value of the dollar has decreased by some 70%.

BRICS nations are increasingly using currency swaps to bypass the dollar system. Details are sketchy, but the next phase could be the introduction of a payment system based on a basket of currencies.

The weight of each currency would be proportional to the GDP of participating countries, their share in international trade, population, territory, natural resources, and various commodities, including gold.

The BRICS nations have been tight-lipped about the architecture of the new system, but China's central bank digital currency (CBDC) could be a model.

No gold, no oil

If the BRICS currency expanded to countries of the partially overlapping Eurasian Economic Union (EAEU) and the Shanghai Cooperation Association (SCO), it would include more than half of the global population as well as the lion's share of the world's commodities. It could lead to oil, commodities, and gold being repriced in the BRICS currency.

But the priority for BRICS nations is to put in place a parallel international payment system. It would better insulate the participating countries from Western sanctions, and it could serve as a backup for the worst-case scenario: the implosion of the global dollar system burdened by an unsustainable debt of $300 trillion, most of it denominated in dollars and currencies of other Group of Seven nations.

Before the Ukraine crisis, Europe was well placed to become an economic partner of the BRICS bloc. The European leadership eliminated that possibility when it inexplicably cut itself off from Russian energy even before securing alternative resources.

By losing access to Russia's enormous resources, the European Union virtually assures a drastic reduction in European standards of living. Germany put its business model and Wirtschaftswunder (economic miracle) at risk – and with it the broader European economy.

Macroeconomist Luke Gromen, struggling to find an explanation for the self-destructive European policy, surmised last month that "the leadership of Europe has been compromised in some way that they are acting against the interest of Europe."

Another explanation could be that the self-absorbed EU leadership has little understanding of macroeconomics. The EU will be squeezed between Eurasia and North America and may not survive in its current form.

Macroeconomist Jan Nieuwenhuis believes that over-indebted countries have six options to address the debt crisis: economic growth, default, higher taxes, austerity, debt relief, and inflation. The last of these six is now running rampant and threatening the living standards and pensions of millions of people and could lead to social unrest.

"When people on lower incomes can't make ends meet, they tend to revolt," says Nieuwenhuis. "Social instability leads to political instability, which leads to monetary instability, which leads to more social instability. In many countries, like the United States, we can already observe this doom loop."

Central bankers are now openly talking about revaluing their gold holdings to backstop their balance sheets, and thereby their currencies. Gold on the balance sheets of most central banks is valued at $35 per ounce, the same as the official price in 1971 when the US decoupled the dollar from gold. The current price of $1,800 reflects the depreciation of the dollar over the past 50 years.

Precious-metals traders in London report that gold purchases by central banks are accelerating. In the third quarter of this year, they bought 400 metric tons of gold, the largest amount in a single quarter since 1967. Commercial banks and institutional investors also increased their gold holdings.

Gold is not an investment that produces a yield, but rather an insurance policy against depreciating or collapsing currencies. Gold buyers fear the current financial system will freeze up, and that a monetary reset will follow. They expect gold to replace the dollar as the benchmark for this reset.

In much of the world, gold has historically been regarded as a store of value in times of crisis. It has always retained this status in Asia – and among bankers. When a borrower offers to provide a bank with a kilogram of gold or a kilo of silver as collateral for a loan, the banker will take the gold.

Jan Krikke is a former Japan correspondent for various media, former managing editor of Asia 2000 in Hong Kong, and author of Leibniz, Einstein, and China (2021).

Russia
Source: tass.com

"It may be interesting and profitable to create a universal payment system involving the issuance of a common payment card (BRICS + EAEU), uniting the national systems of China (Union Pay), India (RuPay), Brazil (Elo), the EAEU member states (Mir, Belkart, etc.)," Vladimir Kovalev added

MOSCOW, November 28. /TASS/. The Eurasian Economic Commission (EEC) considers it possible to create a new unit of account based on the basket of currencies of the BRICS and the Eurasian Economic Union (EAEU), Vladimir Kovalev, Advisor to the Chairman of the EEC Board, said as quoted in a statement of the EEC.

"The global financial system is changing, there is a need to create a new reserve currency and a settlement currency. Taking into account the structure of trade relations between the BRICS and the EAEU, the use of national currencies in mutual settlements is most justified, and the significant potential for cooperation indicates the possibility of creating a new unit of account," Kovalev said during the BRICS International Business Forum in Moscow.

"It may be interesting and profitable to create a universal payment system involving the issuance of a common payment card (BRICS + EAEU), uniting the national systems of China (Union Pay), India (RuPay), Brazil (Elo), the EAEU member states (Mir, Belkart, etc.)," he added.