Macroscope | Why China’s dominance puts Brics expansion plans and very existence in jeopardy
- The differences in fortunes between China and the other Brics members are complicating plans for expansion and challenging the US dollar
- The more dependent the group is on China, the deeper the fault lines within the bloc and the more difficult it is to coordinate policy
This is a damning verdict from the economist who grouped together the developing nations of Brazil, Russia, India and China – South Africa joined in 2010 – because of their role in driving growth, a far-reaching shift that, according to O’Neill, required a more representative form of global governance.
Brics has come a long way since the turn of the century. As Bank of America noted in a report published on August 11, the Brics nations’ combined gross domestic product as a share of global output surpassed that of the Group of 7 advanced economies in 2021 in purchasing power parity terms. By 2028, the Brics countries are expected to account for 33.6 per cent of global output, compared with 27 per cent for the G7.
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At the root of the club’s lack of cohesion is the overwhelming dominance of China, the only Brics member that has made meaningful progress in converging with the developed world by becoming a knowledge-based and data-driven economy.