Long live trade

PUBLISHED : Wednesday, 20 April, 2011, 12:00am
UPDATED : Wednesday, 20 April, 2011, 12:00am


The summit meeting of the BRICS countries - Brazil, Russia, India, China and South Africa -is a clear sign that the world's economic and political landscape is changing, with China leading the emerging economies. The fact that China hosted this meeting, in conjunction with the 10th annual meeting of the Boao Forum for Asia, founded to promote regional economic integration and development, reflects Beijing's growing influence in Asia and the world.

Beijing understands that it is premature to talk about sensitive political issues, such as security, given that the United States has treaty allies in Asia. So for now, at least, it is only talking about trade and economic integration.

As is its approach in other dialogues, Beijing prefers to tackle easy issues first before grappling with more difficult ones. This means achieving political trust through economic co-operation, which sounds good but is easier said than done. The BRICS platform, meanwhile, enables China to gain additional leverage while reaching out to other developing countries.

China will use the BRICS forum to gain clout within the G20, which has replaced the G8 as the maker of economic policy for the world as power shifts from the West to the bigger developing nations. Figures tell a story. The five BRICS countries account for 42 per cent of the world's population and 24 per cent of the global economy. Acting in concert, they will have a far greater -and perhaps less threatening- voice than China's alone.

And of the five countries, China is by far the most important. Not only is it the world's second largest economy, it is also the biggest trading partner of all the four other members.

Certainly, China would not be so crass as to try to boss the other countries around. It knows that each nation gives priority to its own interests, including in dealings with the US and Europe, even if they collectively call for far-reaching reforms in the global financial order.

To ensure success of the BRICS meeting, Chinese officials made it clear that they did not want outstanding bilateral issues to intrude.

And there are bilateral issues aplenty. Brazil and South Africa, for example, are both concerned about an influx of cheap Chinese imports. Brazil has also complained about the artificially low value of the renminbi.

But China's most troublesome relationship is with India. New Delhi suspended military exchanges with China last year after Beijing refused to issue a visa to an Indian general from Kashmir, evidently to show that the Chinese do not recognise Indian jurisdiction in the area.

But, after a meeting between President Hu Jintao and Prime Minister Manmohan Singh ahead of the BRICS meeting, it was disclosed that military exchanges would be revived. Evidently, China had made a concession.

China's concentration on fostering close ties with developing countries, as reflected in BRICS, recalls a strategy during the Cultural Revolution when chairman Mao Zedong's designated successor, Marshal Lin Biao, published a pamphlet 'Long Live the Victory of People's War!' Mao's goal was world revolution, and Lin showed how that could be achieved.

Recalling that the communists had gained power in China through control of the countryside and then squeezing the cities, Lin outlined a similar strategy. North America and western Europe, he wrote, could be called the cities of the world. World revolution, he asserted, could be achieved by 'the encirclement of cities by the rural areas', with the rural areas being Asia, Africa and Latin America.

Those words were written more than 35 years ago. Since then China has undergone, shall we say, revolutionary changes.

But while China no longer supports world revolution, its strategy is still to ally with developing countries, though the goal is no longer the overthrow of the West but to compete peacefully through economic means. That's certainly progress.

Frank Ching is a Hong Kong-based writer and commentator. Follow him on Twitter: @FrankChing1