Information Bulletin of the BRICS Trade Union Forum
Issue 52.2018
2018.12.24 — 2018.12.30
International relations
Foreign policy in the context of BRICS
India-China Relations Arrive at Equilibrium as Both Sides Enhance Confidence Building Measures (Индийско-китайские отношения достигают равновесия, поскольку обе стороны усиливают меры по укреплению доверия) / India, December, 2018
Keywords: expert_opinion, political_issues
Author: Srikanth Kondapalli

Post Doklam, India and China have been working to increase cooperation with Prime Minister Narendra Modi holding an informal summit with Chinese President Xi Jinping at Wuhan in April this year which has been subsequently followed by four more meetings in recent months. It had brought equilibrium in the bilateral relations. The second informal summit meeting between the two leaders is expected next year.

Since the "disengagement" of troops at Doklam in August 2017, and specifically after the Wuhan informal summit meeting between Prime Minister Narendra Modi and President Xi Jinping, bilateral relations appear to be arriving at equilibrium. A series of high level visits, growing trade and investments, renewal of counter-terror joint operations between the two armies, and people-to-people exchanges are triggering renewed interest in the bilateral relations.

The Wuhan meeting resulted in an understanding between the two countries to increase "strategic communications", de-escalate borders and provide "strategic guidance" to their respective armies to "manage" the situation on the borders, enhance confidence building measures (CBMs), cooperate in economic projects in war-torn Afghanistan, enhance economic relations by addressing trade deficits, While the emerging tariff wars between the United States and China in the past few months has forced China to mend fences with its neighbours, including with Japan and India, it needs to be seen whether this upgradation in relations is of medium term or short-term duration.

Relations with India as such have been upgraded. Firstly, are a series of high-level visits and initiatives. PM Modi met with President Xi at Xiamen at the BRICS meeting in September 2017 soon after the "disengagement of troops" at Doklam with the suggestion that a new set of more effective CBMs needs to be evolved. Later, both met four times this year – at the Wuhan meeting on April 27-28, 2018 for over ten hours resulted in a spate of understandings that became concrete at the Qingdao meeting of Shanghai Cooperation Organisation on June 9, 2018 when China agreed to import rice and share hydrological data on Brahmaputra river.

Another review meeting of the bilateral relations took place at the sidelines of the BRICS meeting at Johannesburg on July 26 which was termed as "very productive". Modi suggested, after the meeting with Xi at the G-20 meeting in Argentina on November 30, that there is a "perceptible improvement" in the bilateral relations. Xi had agreed to import more rice and sugar from India. This was the 16 th meeting with Xi since PM Modi took charge in 2014, while his predecessor Manmohan Singh met China's President 27 times in 10 years.

Another series of meetings were held at the defence, home and foreign ministerial levels. Coinciding with the Wuhan meeting, defence and foreign ministers of India, Nirmala Sitharaman and Sushma Swaraj visited Beijing. Sitaraman met her Chinese counterpart Wei Fenghe earlier at Moscow. During her April 23-25 visit, Sitaraman suggested for strengthening military ties, including CBMs and joint counter-terrorism efforts. While military to military ties are expected to increase, and overall both countries prevented conflict, there does not seem to be trust building outcomes. Many activities in this sphere remain cosmetic in nature.

On her part, Swaraj, during her four day visit to China, emphasised on language learning, resolving issues on the borders, and trade deficits. Both also began training Afghan diplomats recently. China followed these visits by sending defence minister Wei Fenghe, public security minister Zhao Kezhi and foreign minister Wang Yi to India. Wei's visit saw the decisions to re-commence the 7th round of "hand-in-hand" joint counter-terrorism operation (held between December 10-23), discussion relating to setting up a hotline between the military commands, and restructuring the MoU signed in May 2006 between the two defence ministries.

Zhao's visit to Delhi saw an agreement signed with Home Minister Rajnath Singh on October 23 on law enforcement and security. Since both countries have identified terrorism as the primary national security threat, this agreement provides an institutional mechanism to resolve differences, especially given China's intransigence at taking a position at the United Nations 1267 counter-terrorism committee on Pakistan-based terrorists namely Masood Azhar, Zakir-ul-Rahman and others.

Foreign minister Wang Yi visited Delhi on December 21-24 signing the high-level mechanism on people to people contacts and cultural exchanges in about 10 fields including sports, films and TV, museum administration, youth exchanges, language teaching and others. While the Swaraj reiterated some of the "hard" issues affecting the bilateral relations, viz., territorial dispute resolution, trade deficits, etc, Wang suggested to resolving the bilateral relations through "soft" approaches.

China appears to be applying a Lao Zi's maxim for its relations with India, that "Water is fluid, soft, and yielding. But water will wear away rock, which is rigid and cannot yield…what is soft is strong". On the economic front, the "developmental partnership" that both countries evolved since last five years, saw incremental progress. The August 1-2 Indian trade delegation visit was followed by a pharmaceutical delegation on August 21-22 to China to lay the ground for exports to China. Trade deficits issues have been raised by the Indian side since President Patil's visit to China in 2010 but to no avail.

The cumulative trade deficit in favour of China in the past decade stands around $626 billion. After Wuhan China suggested that it will import cancer curing drugs (about 29 of them) in addition to rice, sugar and other items. The Chinese movie "Dying to Survive" highlighted the travails of cancer patients in China. China had been blocking the inexpensive Indian generic drugs, despite rampant smuggling from India.

India had been insisting on market access, lifting of non-tariff barriers in the China market, investments from China and the like. While China's investment in 2017 picked up to $2 billion – mainly in start-ups – cumulatively so far it is under $8 billion in India. Overall, while the bilateral relations are acquiring strategic dimensions, with "developmental partnership" is also making some headway. Post-Doklam period had brought equilibrium in the bilateral relations. The second informal summit meeting between the two leaders is expected next year and since both countries have a to-down approach in terms of decision-making process, this meeting is expected to further review and introduce new elements. It is clear that much of the above is coming in the wake of the emerging tariff wars between the United States and China. For this reason India needs to be on guard to see whether Beijing's renewed focus on India is of short or for medium term.

Srikanth Kondapalli is Professor in Chinese Studies at JNU, Delhi.

Financial Express

Investment and Finance
Investment and finance in BRICS
Russian Banks May Receive Full-Fledged Licenses in China – Trade Representative (Российские банки могут получить полноценные лицензии в Китае - торговый представитель) / Russia, December, 2018
Keywords: quotation, trade_relations

BEIJING (Sputnik) – Liberalization of the Chinese banking legislation provides Russian banks with an opportunity to receive full-fledged licenses for their work in China, Russia's Trade Representative in the Asian country, Sergey Iniushin, told Sputnik.

"It has always been difficult for banks to start their work and operate in China. We are studying the issue and we see its development in the following manner — one can say that now there are some steps, which allow us to say that there is an opportunity for a Russian bank to get a full-fledged license," Iniushin said.

The trade representative pointed out that some Russian banks were represented in China while the VTB bank was the only bank that had a license. However, according to

Iniushin, its license does not cover all types of operations and the bank cannot operate as a full-fledged settlement bank.

Russian and China are actively developing their economic cooperation in bilateral as well as multilateral formats such as BRICS and the Asia-Pacific Economic Cooperation (APEC).
Prospects for Cooperation in Science, Technology and Innovation among the BRICS countries (Перспективы сотрудничества в области науки, технологий и инноваций между странами БРИКС) / Russia, December, 2018
Keywords: expert_opinion, innovations, economic_challenges
Author: Daria Turianitsa

Daria Turianitsa, Assistant Research Fellow, Russian National Committee on BRICS Research – exclusive for InfoBRICS

The new stage of scientific and technical progress not only strengthens the role of knowledge and information, but also dictates the need of transition to more flexible model of development.

Science, Technology and Innovation are fundamental instruments for UN sustainable development goals realization, which allows to increase economic, social and environmental efficiency of activity, develop new and more stable ways of human needs satisfaction and expand human development possibilities.

For emerging economies to develop effective strategy (that will include improvement of quality of education and the ability to adopt and introduce innovations) is one of the conditions to maintain long-term economic growth.

In the majority of developed countries the dynamic of innovative progress based on creation of new technologies and improvement existing ones, efficient use of resources and quality of human capital become key factors of growth.

Therefore, the main factor of developing countries transition to a post-industrial stage of development, accession to a group of developed countries and ensuring international competitiveness of national products is not only the ability to use effectively, but also to create innovative products by means of development of science and information technologies.

To compare the indicators reflecting intensity and dynamics of innovation process in the world is important to understand global trends at a new stage of scientific and technical progress, and also for objective assessment of BRICS countries place and their role in the sphere of innovations.

According to Global Innovation Index in 2018 Russia holds the 46th place from 126 countries, with a high level of educational and scientific potential which, however, is not used effectively. China, India, and Russia are at the top among the middle-income group, followed by Brazil and Argentina. Mexico and Malaysia are advancing the most in this group. While North America, Europe and Asia-Pacific are the top innovation regions.

The share of expenses on research and development is growing: in 2000 the general level of expenses on research and development in the world was 1.5% of world GDP, in 2016 it already reached 1.7% of world GDP.

The world expenses' on science and innovations stable growth caused by increasing competition between the world markets demands efficient using of resources and effective strategy of economic growth.

During this period the indicator grew almost twice in developing countries: from 0.7% to 1.2% of GDP, China played key role in this process.

The key problem in Russia in innovative sector development is the research and development transformation and insufficient funding of science which is saved up for the 1990s. The science sphere was hardly damaged during the crisis in 1990-1998. Unfortunately in 2000 Russia still kept rather low level of expenses on research and development. Despite being one of the leading countries in the world by the number of researchers per capita Russia remains only fourth in the ten world ranking on research and development share in GDP. Thus, implementation of innovative policy is still one of the priority issues for economic development in Russia.

Among the high-tech and knowledge-intensive industries the biggest share in GDP is made by information and communication technologies (ICT). According to the World trade organization (WTO), in 2016 share of ICT export of developing countries in the structure of joint world export made 32.4%, and import — 40.7%.

Export and import of information technology industry products consist of computers, peripheral equipment, communication equipment, electronic equipment and other ICT goods.

Only in China and the share of ICT products in total amount of exports in 2000-2016 increased.

In other BRICS countries, there was a considerable decrease in the share of ICT products. Mainly it occurred because of the growing competition in the world market due to the rising expenses on export of information technologies made by China and other emerging economies in the Asian region.

Nowadays Internet is one of the most dynamic sectors of information technologies. Since the beginning of 2000's there is increasing number of Internet users in Russia, China and Brazil. According to the UN statistics, in 2016 23 out of 100 in China get the access to the Internet, in Russia ― 19, and in Brazil ― 12. Meanwhile, distribution of the Internet in other BRICS countries ― India and South Africa ― remains one of the most sensitive issues in development of information technology industry.

Human potential in the era of post-industrial society is a key source for economic innovative development. Therefore, the role of the human capital raises in the process of developing innovative strategy of economic growth. Currently highly skilled human resources are the driving force for innovative development. First and the most level of human resources is characterized by the following factors: Education level; Skills in the field of ICT; Quality of education; Research activity.

Developing countries significantly differ on the level of possession of higher education. The smallest share of the population with higher education is in South Africa (19.8%). In all BRICS countries possession of higher education among women is higher, than among men.

The main driving force for research and development in the sphere of information technologies are skills. Only 8.5% of the population of developed countries can be engaged in creation of computer programs. For developing countries this figure obtains less than 3.3%. Worldwide share of men having skills in the field of ICT is higher, than share of women.

Increasing role of knowledge as one of core determinants of economic growth and increasing demand for high quality higher education caused growth of rating systems. It is said that one of the major indicators of human capital quality is level of higher educational institutions in many respects it predetermines its innovative potential.

With a huge innovative potential BRICS reached certain positive results in the sphere of science and innovations. These provided data reflect current state of BRICS innovative sector, its opportunities and priorities of further development. Furthermore it allows to define the main obstacles in process of innovative capacity implementation.

There is a number of tasks to improve innovative system among which ensuring growth of innovative activity in both private and public sector, developing partnership in the sphere of scientific research projects, increasing investments into research and development, digitalization of BRICS countries economies etc. The innovative capacity of BRICS countries and the active state support in the solution of the above-stated tasks are aimed to rise the efficiency of innovative system for the long-term economic development.

Inaugural Intra-Africa Trade Fair in Cairo exceeded targets (Торжественное открытие Межафриканской торговой ярмарки в Каире превысило целевые показатели) / Egypt, December, 2018
Keywords: trade_relations

The inaugural Intra-Africa Trade Fair (IATF) held in Cairo from 11 to 17 December exceeded the targets set by the organising committee when they approached the Afreximbank for sponsorship.

The ambitious targets the committee set was to attract at least 30 African country pavilions, get at least 1,000 exhibitors and be able to say agreements worth at least $25 billion were signed at the IATF.

In the event, the IATF attracted 42 African country pavilions, there were just more than 1,100 exhibitors of which 40 were from South Africa and agreements worth $32.6 billion were signed.

The idea behind the IATF was due to the signing of the African Continental Free Trade Agreement (AfCFTA) in Kigali, Rwanda in March 2018 by 44 out of the 55 African Union member countries. This meant that there was only eight months available to organise the inaugural IATF.

The AfCFTA still has to be ratified by the respective legislatures and will only come into force once 22 countries have ratified it. In December 2018 only 13 countries have done so, but officials I spoke to you said they were confident that 12 other countries would ratify it early in 2019.

The countries that have ratified it are: Chad, eSwatini (formerly called Swaziland), Ghana, Guinea, Ivory Coast, Kenya, Mali, Niger, Rwanda, Sierra Leone, South Africa, Togo and Uganda.

Although Africa's largest economy, Nigeria, has neither signed nor ratified the AfCFTA, former Nigerian President Olusegun Obasanjo was the Chairman of the IATF 2018 Advisory Council and there was a strong Nigerian presence at the IATF and a Nigerian Country Day.

In response to a question from The BRICS Post, Obasanjo said although the IATF was primarily aimed at encouraging intra-African trade, the aim was not to make the AfCFTA exclusionary, but rather that the BRICS and other-non African countries could help African industries grow by providing capital, knowhow and capital goods.

A reflection of this inclusionary vision is the fact that the China Export Import Bank was one of the main sponsors of the IATF and the next annual meeting of the Afreximbank will be held in Moscow, Russia in June 2019.

Egypt will also be hosting a meeting between Egypt and BRICS countries in the same month.

The United Nations Economic Commission for Africa estimated that full implementation of the AfCFTA could increase intra-African trade by 52 per cent by 2022, compared with trade levels in 2010.

The AfCFTA aims to remove barriers to trade such as tariffs and import quotas, in order to allow the free flow of goods and services, which should reduce prices for consumers and allow factories to exploit the benefits of scale and increased capacity utilisation.

Kigali in Rwanda will host the next IATF in 2020 and the organisers expect that the success of the Cairo event will attract even more African countries and exhibitors.

World of work
Social policy, trade unions, actions
The unveiling of the portrait of the first Indian cosmonaut Wg. Cdr. (Retd.) Rakesh Sharma (Презентация портрета первого индийского космонавта Р.Шармы) / Russia, December, 2018
Keywords: mofa, social_issues

On December 3, the Russian Embassy in India saw the unveiling of the portrait of the first Indian cosmonaut Wg. Cdr. (Retd.) Rakesh Sharma painted by Corresponding Member of the Russian Academy of Arts Mr Vladimir Anisimov. The main guest of the event jointly organized with the BRICS Chamber of Commerce and Industry was the cosmonaut himself. The function was attended by representatives of the diplomatic corps, business circles, the International Federation of Indo-Russian Youth Clubs, as well as professors and students from leading Delhi universities.

Mr Rakesh Sharma shared the impressions of his eight-day flight as a member of a joint Soviet-Indian Soyuz-T11 spacecraft crew in 1984 and expressed his gratitude to the Russian side for its contribution to India's rise as a space power.

The guests enjoyed the exhibition featuring Indian landscapes and portraits painted by Mr Vladimir Anisimov during his numerous trips around the country.

The Russian artist said that creation of the portrait of the famous cosmonaut opens up a new series of expeditions around the BRICS countries. Paintings from these journeys will be presented at the Heart Sends Message to Heart exhibition on the sidelines of 2020 Group's Summit. In 2019, several trips are planned to paint landscapes of North, Central and South India as well as portraits of famous South Asian political, public and cultural figures. In Chennai a presentation of the portrait of Mr Vishwanathan Anand made by the artist in the chess player's hometown this November is already being prepared.

During the lecture at MBS International School in New Delhi Mr Vladimir Anisimov also spoke about his creative development, expeditions to the ASEAN countries and the Middle East.

Russian Ambassador H.E. Mr Nikolay Kudashev expressed his gratitude to the two "outstanding travellers" for speaking at the Embassy and wished them "a fair wind", inspiration and new impressions. During an interview with local media, the head of the diplomatic mission confirmed Russia's readiness to support the implementation of Indian space programs, the importance of which was emphasized by Mr Rakesh Sharma and the BRICS Chamber of Commerce and Industry Tresurer Mr Vishwas Tripathi.

The guests of the event had the opportunity to talk to Mr Sharma about his renowned flight as well as about the future of the Indian cosmonautics.

The space theme of the function was developed by Dmitry Kiselyov's Spacewalker movie (2017) previously screened during the Russian Film Days in India this October.

The event was covered by Indian television and newspapers.

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