Based on extensive authentic data and research, this book consists of seven chapters, analyzes economic layouts and potentials of BRICS countries and their respective advantages and positions in finance, trade and investment in the previous and new rounds of globalization, focuses on how BRICS leads the new round of globalization, and puts forward the proposal that BRICS should strengthen its political exchanges and cooperation, reinforce its economic and trade partnerships, intensify its multilateral cooperation, cultural communication and integration in global affairs, and develop a community of common destiny. It also includes in its appendixes BRICS leaders’ communiques and research on BRICS member states. Covering multiple international hot topics like the Belt and Road Initiative, New Development Bank, Contingent Reserve Arrangement, and currency internationalization, the book is rich in content and has high referential and research value.
The following is an excerpt from the book.
We are currently in a time of critical global economic recovery. We need to consider the future of globalization, especially in light of the emergence of various anti-globalization and de-globalization ideas, as well as the increasing political uncertainties intensified by Britain’s retreat from EU, the Donald Trump administration and European elections. Here comes the question: Where will globalization go and how can we guarantee the recovery of the world economy?
The global economic landscape has also undergone radical changes partially resulting from the biggest economic crisis in the 21st century and the ensuing European debt crisis. Consequently, the economic landscape is transferring from one fueled by old growth drivers, as represented by G7 and developed countries, to that driven by new engines of growth—emerging economies and developing countries led by BRICS countries. Passing the economic development baton to developing countries has allowed them to become major engines for world economic growth. Accordingly, since the financial crisis in 2008, the contribution of developing countries to the world economy has exceeded 70 percent.
In the past decade of development, BRICS countries have playeda greater role in shaping the world’s economic landscape. Since BRICS countries maintain robust development momentum, show strong development potential, and contribute substantially to the world economy, many countries expect to transition from participants to leaders of global economic governance. As predicted by Jim O’Neill, who coined the acronym BRIC, BRIC will become the world’s top six economies together with the United States (US) and Japan.
At a moment when globalization is being questioned, BRICS countries should commit to the responsibility of boosting globalization by maintaining their own stable economic progress. Such progress will dispel notions that BRICS economies are fading. By leading emerging economies and developing countries toward continuing globalization, BRICS countries will help bring the world economy back on a healthy, stable and rapid development track which will benefit people around the world.
❶ To shoulder the responsibility of leading globalization. Nowadays as isolationism, populism, terrorism and trade protectionism are gaining ground, not only is globalization at a critical turning point, but the world economy is also in recovery. Facing the rise and fall of competition between developed and developing countries in the world economy, globalization needs to be driven by developing countries, as represented by BRICS countries.
❷ To become engines for new globalization. IMF data shows that over the past 10 years, BRICS’ contribution to world economic growth has exceeded 50 percent; per a Goldman Sachs report, BRICS’ GDP will outperform G6 (the United States, Britain, France, Germany, Japan and Italy) by 2050.
❸ To reinforce structural adjustment and implement innovation-driven growth strategies. BRICS countries should accelerate their structural reform as well as innovate in economic growth patterns. These economic growth patterns should focus on innovation, new industrial revolution, digital economy and structural reform.
❹ To deepen reform and step up financial cooperation to lead globalization. BRICS countries need to strengthen their financial cooperation to address current speculation about the decline of BRICS economies. Members with strong complementary economic structures need to bring their resources and advantages into full play while reinforcing their own structural reform, in order to consolidate financial cooperation and innovative mechanism construction and to push forward globalization.
❺ To further boost economic and trade cooperation by taking advantage of the Belt and Road Initiative. BRICS countries should follow and lead the Belt and Road Initiative by focusing on infrastructure construction. This will allow for better interconnectivity and thus strengthen their economic and trade exchanges. Through signing free trade agreements (FTA) and building free-trade zones (FTZ), BRICS countries will promote common economic development by sharing development results with countries along the Belt and Road, which will ultimately lead to further globalization.
❻ To intensify construction of platforms for economic and financial cooperation. BRICS countries should intensify their efforts to establish the New Development Bank and make contingent reserve arrangements, as well as cement financial cooperation with other bilateral and multilateral platforms such as the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund. This will elevate the voices of emerging economies and developing countries in the world economy.
❼ To launch first the “Bond Connect” and then the “BRICS Connect.” BRICS countries should pursue interconnectivity of their capital markets by developing their own investment and financing mechanisms. They should also gradually build financial cooperation platforms like the “Bond Connect” and the “BRICS Connect.”
❽ To strengthen monetary cooperation and improve the international monetary system. In order to change the US dollar-dominant international monetary system, BRICS countries should enhance monetary interconnection along the development path, first by monetary clearing and settlement, then by regionalization and internationalization.
❾ To build up cooperation in financial regulation to guard against financial risks. To withstand risks in the international market, BRICS countries should work more closely in coordinating macroeconomic policies, collaborating in financial regulation, improving related regulatory systems and stepping up enforcement.
❿ To highlight greenness, inclusiveness, fairness and innovation in financial cooperation. The BRICS countries which best represent the economic benefits of developing countries should vigorously launch changes to the global economic governance system, drive globalization and foster growth of the world economy in a green, inclusive and creative manner.