BRICS and China’s Aspiration for the New “International Order”

03-Apr-2013

I like this.

Be Sociable, Share!
-->

By

An eternal optimist, Liu-Yue built two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a searchable content platform and business tools for knowledge sharing and financial education. Oxstones.com also provides investors with direct access to U.S. commercial real estate opportunities and other alternative investments. In addition, Liu-Yue also co-founded Cute Brands a cause-oriented character brand management and brand licensing company that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising UHNWIs and family offices on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in Latin American equities and bonds investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.







By Yun Sun, Brookings Institute,

The destinations of new Chinese leader’s first foreign tour are always carefully chosen and reflect two things: 1) They are important countries and represent certain foreign policy priorities for China, and 2) they are China-friendly, therefore the new leader will be met with open arms and a warm welcome rather than difficult questions or a long list of demands. Russia, China’s close neighbor and former ally, fits the profile and has been the first destination for both former President Hu Jintao in 2003 and for Xi Jinping this year. However, a decade ago, Hu focused on China’s periphery—Russia, Kazakhstan and Mongolia—while today Xi is taking China’s agenda further away. With the exception of Russia, Xi’s foreign tour focuses on Africa: specifically Tanzania, South Africa and the Republic of the Congo. The highlight is the fifth BRICS (Brazil, Russia, India, China and South Africa) summit in Durban, South Africa from March 26-27.

The unprecedented level of emphasis the new Chinese leader is attaching to the BRICS nations reflects the profound changes in China’s perceptions of itself and of the outside world. In the past decade, China has grown into the second largest economy in the world. However, this economic muscle is yet to be translated into comprehensive national power and the United States, despite its relative decline, remains the sole superpower in China’s foreign policy lexicon. As the U.S. rebalances to Asia, China feels a heightened pressure in its immediate periphery from Washington’s enhanced military deployment, alliances and “interference” in China’s territorial disputes. As the new Chinese leaders contemplate how to break away from this new “containment and encirclement of China,” the reliance on and cooperation with non-Western, rising economic powers are of high importance for China.

China sees natural common ground with emerging economies, especially in the pursuit of a new international economic order and the democratization of international relations. In Beijing’s view, the 2008 financial crisis dramatically changed the mapping of the world economy, deeply damaging the strength of the traditional developed countries. The economic recovery of the U.S. and Japan has been sluggish, while the eurozone crisis has lingered on for years. The relatively impressive momentum for growth comes from emerging economies, especially the BRICS nations.

For China, since the BRICS countries’ share and importance in the world economy has been growing but has not yet surpassed the developed countries’, the next step, naturally, would be for them to act as one group to increase their collective voice and bargaining power against traditional developed countries. In China’s view, this momentum would democratize international relations by offering developing counties more voice and rights. As Xi pointed out in his interview with journalists from BRICS nations right before his trip on March 19, the international economic governance system must reflect the profound changes of the global economic reality, and emerging markets/developing countries deserve more representation and bigger voices. The reform of voting rights at the IMF and World Bank signifies the direction to which China aspires—in Beijing’s dictionary, more responsibility is only justified when it is accompanied with more rights.

China also wishes to strengthen its identity as an emerging economy and a developing country by enhancing its contribution to the BRICS nations and their international status. Xi pledged to deepen the cooperative partnership and improve the cooperation mechanism among the BRICS nations. One possible major move would be the potential plan for the BRICS countries to establish their own development bank to provide funding assistance to Africa’s infrastructure development. If this plan transpires, it would demonstrate a major advancement by China in the field of international development assistance. By forming a de facto alliance among themselves, BRICS nations will gain more legitimacy and increase competitiveness for their development assistance, which is often criticized and even marginalized by traditional donors.

Xi’s first overseas trip reveals the international quagmire China is in. The past 10 years witnessed unprecedented growth of Chinese economy, but it was also accompanied by unparalleled foreign policy challenges. As many Chinese analysts observed, China’s external environment did not improve as a result of China’s rise, instead, it has worsened. China has become richer, but less respected. It has more transactions with the world than ever, but less friends.

Therefore, Xi’s trip to Russia, Africa and the BRICS summit genuinely reflects China’s strategic moves to break away from this predicament. It seeks to reconsolidate friendship with a Russia also antagonized by the West, with Africa to reinforce its developing-country identity and solidarity with the developing world, and with other emerging economies to align their collective power against the traditional developed countries. China learned its lesson that it is yet to be strong enough to challenge the existing international order (and the supremacy of the U.S.) alone. Alignment with other rising powers, like the BRICS countries, and reinforcement of its friendship base among developing countries will be a new emphasis for China’s foreign policy in the foreseeable future.

Be Sociable, Share!
Tags: , , , , , , , , , , , ,

Post a Comment

Your email is never published nor shared. Required fields are marked *

*
*

Subscribe without commenting









Loading...
Join Oxstones Investment Club's Daily Newsletter