Is China the real engine behind the BRICS?
The Beginning of BRICS
The Cold War era had a profound effect on the world. It has inflicted great damage on countries both politically and economically. With this change, the center of the world made a transition towards Asia-Pacific. Thus, the rise of countries such as China, Russia, and India and their impact on the world order have become increasingly important. With the rise of Asia-Pacific countries, BRICS countries were established. Thanks to the establishment of BRICS, new international financial institutions were created and many financial institutions such as the IMF (International Monetary Fund) were formed, for example the Contingent Reserve Arrangement. After the Cold War, interaction and trade between Western countries decreased. As a result, BRICS countries achieved rapid growth. The growth of developing countries in Asia-Pacific accelerated as the power and cooperation of developed countries that had differences of opinion diminished. Most countries suffered from the 2008 Financial Crisis, and the BRICS countries also had difficulties in overcoming this crisis. They experienced economic shrinkage, regression in trade and technology. As the Chinese economy is based on foreign direct investment, it has shrunk along with the drop in demand of the countries during the crisis, but after the crisis period, it had a great increase and experienced economic growth. India and China did not suffer from the crisis, they experienced growth. Brazil and Russia have shrunk. South Africa was less affected by this crisis compared to the others, after the crisis, its economy became more open compared to other countries. In short, the crisis affected all countries, but its impact in developing countries was less than in developed countries, and the BRICS effect increased after the crisis.
Importance and Formation of BRICS
With the acceleration of globalization in the 21st century, countries have achieved significant developments and changes in economic, technological and trade areas. The financial crisis of 2008 plays a huge role in changing the center of the world. The acronym BRICS first appeared in an article written by Jim O’Neill in 2001. The use of the abbreviation BRICS has spread as the global economy has shifted from G8 countries to developing countries. Today, the abbreviation of BRICS consists of the initials of Brazil, Russia, India, China, and South Africa. The biggest reason for the establishment of BRICS; to eliminate and correct the problems in the world’s economic and financial order. This community was first established as BRIC and then in 2010 they included South Africa in the group. In 2009, the BRIC countries held their first summit in Russia and thus proved its reality to the world. The topics discussed at this summit and what they want to happen is the creation of a democratic, equal, multipolar, impartial, transparent, and independent world. At the summit, the future goals of these four countries and how they can change the world order were discussed. A year later, South Africa joined, and the name of the community was changed to BRICS. In the field of cooperation, countries alternate each year with each other, this rotating presidency emphasizes the just and egalitarian goal between countries. BRICS aims to create cooperation between 3 parts, these are diplomatic relations, cooperation between state institutions, and civil society-human relations. Thanks to these 3 important areas, BRICS countries play an active role in many areas. For example, they have achieved significant progress in the fields of trade, customs, education, peaceful and fair foreign relations (for the development and development of South Africa).
International System Functioning of BRICS
The decision-making mechanism in BRICS is very fast, due to the small number of countries. The advantage of this is that when there is a problem, countries can quickly take decisions and achieve consensus. But this decision mechanism can also cause problems because they are more likely to make quick decisions and make mistakes. BRICS may be bigger than the European economy in the future in economic and financial terms, all member countries are successful in different fields, so they can be more successful than the G8 countries (USA, Germany, UK, France, Italy, Japan, Canada, and Russia). China and India will have much more of the goods and foreign trade they currently produce. Among the five countries, the fastest growing countries were China and India, while other countries had slower growth. The biggest contribution to growth comes from the domestic savings and foreign direct investment strategy of China. The fact that the population of these two countries has a young and expanding population has increased the economic and social growth capacities of the countries. China’s growth poses a threat to countries like America. In the new world order, China is the biggest concern and obstacle for other countries. Common features of the BRICS countries include cheap labor, low-cost products, foreign exchange reserves, and foreign direct investment. These features have contributed greatly to the countries’ GDP and increased it. BRICS has become the most important engine influencing economic growth in the world, as it accounts for approximately 42% of the world’s population and approximately 23% of the world’s GDP. In addition to its high data, human development data in BRICS countries is very low, which also affects the place of BRICS in the world economy. BRICS countries are experiencing difficulties due to their structural and political differences. While China is a one-party authoritarian state, Russia is semi-democratic, Brazil and India are democratic countries. Although the differences of countries are beneficial in the economic field, their political differences can cause problems.
Comparison of Countries in BRICS
1. Brazil
Brazil is the country with the largest population and area in the South American continent. Brazil has a rich resource in terms of product diversity, and it has both abundant and diverse products. Among its most important products are coffee and cocoa. It is a country rich in natural resources. Due to cheap labor costs, its contribution to the economy is great. Thanks to the country’s production, it is among the leading countries in the field of export. On the contrary, the country has infrastructure deficiencies in areas such as energy.
2. Russia
Russia has the largest territory in the world, thanks to this advantage it has untouched resources. It is among the richest countries in terms of natural resources. It pursues economic and political targets to strengthen regional and energy resources. The fact that even its natural resources are rich makes the biggest contribution to the economic wealth of the country. The main products of its exports are on resources such as natural gas, oil, and mines. Russia’s exports vary according to the world’s energy consumption. The great success it has created in the field of energy is not found at the rate of investment. Foreign investment contribution to Russia is very small. Since the industrial sector is not developed, competition in the country is almost non-existent.
3. India
India has the second largest population in the world after China. The industrialization of the country has increased. The country has a different workforce class than others; there is a group that is divided into agricultural sectors where the skilled, educated class and mostly uneducated groups work. The most important feature of the country is the income it has made in the field of IT. It is also considered as an important country in the fields of medicine and textiles. Thanks to its various economic fields, it has been the focus of foreign investment and has made great contributions to BRICS. In addition to the diversity of the economy, the per capita income in the country was negatively affected due to the majority of the population. The rapid growth of its economy had negative consequences for India and its debts were formed. It is a country suffering from poverty. In addition, India remained weak in the public sphere.
4. China
China is the third country in the world in terms of surface area. The country’s economy is among the largest in the world. It is one of the countries with the highest per capita income. It ranks first in the field of export. Although its exports stagnated during the 2008 crisis, it is now one of the most important countries in the world. Being developed in the field of industry increases its competitiveness. The variety of products in the country and its power in the diplomatic field also positively affect foreign investments. International trade is strong and robust. China’s economy is larger than other BRICS countries, so it is seen as the most important member country. It has integrated into the global economy and enabled the growth of the country. China benefits from a low labor force, thus affecting its economic development. One of the biggest problems of China is the environmental problems in the country. In addition, the unemployment rate in the country is increasing. The country has become weak because of the problems of the society.
5. South Africa
The Republic of South Africa is expanding its economy mostly based on underground resources. The country’s underground resources are the richest among other BRICS countries. They usually extract various resources such as gold, diamonds, coal, and iron from underground. It has the second largest economy on the African continent and plays an important role worldwide. The abundance of underground resources develops the country financially.
China’s Rise, Trade and Economy
The People’s Republic of China was founded in 1949 and the way it is governed is autocracy. It is not a free country and is called a communist state. China’s population is the largest in the world. GNP per capita is in a good position as an upper-middle-income country. The country started to attract attention around the world once again by becoming a member of the United Nations in 1971. The country’s GDP growth rate will slow down in the future, but it will still remain the most important country in the BRICS. As China’s economy is oriented towards foreign direct investment, both economic and social recovery has been realized. As domestic market prices are flexible, the rate of foreign investment increases. In addition, another issue that distinguishes China from other countries is that even low-income people can live without difficulty in meeting their basic needs. Everyone has a job. Since the per capita income is high, even the poor families of the country can easily access all services for the education and health of their children. This shows that the country’s economy and incomes are very large. The Chinese government has aimed to increase the competition in the country by making many reforms, so the development of the country has been positively affected in the competitive environment. China has changed its globalization strategy to expand overseas, protect and develop energy and raw materials, instead of increasing employment and dealing with diplomatic relations. Develops new strategies. China’s size in the field of economy draws attention with its ranking among the largest companies in the world. These companies are insurance, telecommunications, oil, and construction companies. The world is increasingly dependent on China, its economic development and high foreign trade support the development of the country.
Conclusion
BRICS consists of the five most important developing countries in the world. These countries shape the world order in financial, economic and security areas. It improves diplomatic and trade relations and creates summits. They gather and seek solutions to take measures against inequalities and emerging problems between countries. The decision-making mechanism is quite effective and fast. The populations and location of countries also affect their economies. Investment, domestic market, and economic activities are given importance. In the new world order, BRICS is ahead of many countries. The biggest contribution to the development of BRICS comes from China. Both foreign investment policies and strong diplomatic relations make BRICS visible. Countries are rich in natural resources, they have various resources such as oil, energy, coal, gold. Among this group, the authoritarianism of China’s political regime has been influential in the development of BRICS. The low cost of labor in the country and the high employment rate revitalizes their economy. The development of BRICS depends on China. However, if another country with economic power like China becomes a member, it will become a rival of China. In the current order, China will continue to grow as a strong state in the coming years and is the most important member of BRICS.
