BRICS leaders are set to meet on beautiful Hainan Island in China to plan for their future development. This important event will contribute to the recent progress made in international politics and the global economy. I would like to use this opportunity to present the latest findings of the Chinese Academy of Social Sciences and some international financial institutions.
According to experts at the Chinese Academy of Social Sciences, by 2015 the share of BRICS countries’ aggregate economic volume will reach 22%, while their combined GDP will account for one-third of global GDP. China and India are expected to develop more rapidly than Brazil and Russia. In quantitative terms, China’s aggregate economic volume could possibly over take the number one spot from United States by 2020 while India is likely to jump to the top five of the world. But again, this is in quantitative terms. In my opinion, it does not reflect the far more substantial aspects of the international balance of power (e.g. creativity in science and technology, strategic military power and the level of institutional management). Moreover, unexpected developments could change the picture considerably. That being said, these projections capture an important trend in international economic development.
Feng Shaolei, Dean, School of Advanced International and Area Studies (SAIAS), East China Normal University
The research contained in this report shows that in the past ten years, the BRICS countries have experienced rapid economic growth and risen in the ranking of world economies. In the first decade of the 21st century, China’s economy grew at a rate of over 10%, India’s at over 7%, and Russia’s at over 6%. The BRICS countries’ overall average growth rate was over 8%, greatly exceeding the average of 2.6% in developed countries and 4.1% globally. In addition, there has been a huge gap between developed and emerging economies in terms of their contribution rate to world economic growth. According to estimates by the IMF, the contribution rate of developed countries for the global economy has decreased from 88.6% in 1990 to 76.6% in 2000, 20.8% in 2008 and about 30% in 2010. While the contribution rate of BRICS countries has increased from -0.6% in 1990 to over 60% in 2010, with China accounting for over 30%.
Due to this rapid economic growth, BRICS’ aggregate economic volume as a share of the global economy has increased from 17.71% in 2001 to 24.22% in 2009. The proportion of the five economies against the U.S. economy has also increased, indicating that the gap between BRICS countries and the U.S. is narrowing in terms of aggregate economic volume. According to IMF statistics, China’s aggregate economic volume has increased from 1.8% of the global economy in 1978 (10th globally) to 6% in 2007 and about 9% in 2010 (2nd globally). China’s aggregate economic volume is equivalent to that of the U.S. economy, from 6.5% in 1978 to 11.5% in 2001, 23.7% in 2007 and about 40% in 2010.
In addition to the overall growth of the BRICS countries mentioned above, I think there are some common developmental trends within BRICS countries. First, in recent years the level of mutual trade within BRICS has grown, illustrating the increased economic cooperation among the four countries. The BRICS countries are either developing or transitional trade powers, and therefore they all advocate free trade and oppose protectionism. Second, the BRICS countries all have large foreign currency reserves, thus they are more likely to reach a consensus on eliminating existing risks in international exchange rates and promoting reforms of the international financial system.
Finally, as developing and transitional powers, the BRICS countries all advocate greater international cooperation during this period of change, while respecting sovereignty and opposing outside military intervention in sovereign nations. In particular, with respect to the current turmoil in Libya and other areas. the BRICS countries advocate the core role of the United Nations in international affairs while at the same time firmly opposing self-interested military interventions.
Taken together, these trends show that a new international structure is emerging and taking the place of the past Western-centric one, which explains why I am cautiously optimistic about the future international system. That being said, even the term “BRIC” was coined by a “Western” expert at Goldman Sachs, which shows that developing and transitional countries still have a very long way to go before they can match the West in the intellectual sphere.
Feng Shaolei is Professor and Dean, School of Advanced International and Area Studies, East China Normal University (ECNU).