China pledges US$80 million cash injection to strengthen BRICS ties

Xi pitches bigger global role for bloc at annual leaders’ summit in Xiamen

PUBLISHED : Monday, 04 September, 2017, 9:46pm
UPDATED : Monday, 04 September, 2017, 11:29pm

China will inject nearly US$80 million into the operations of a bloc of emerging economies as it seeks to patch over differences and give the group a bigger say in global governance.

Chinese President Xi Jinping said on Monday that most of the money – about 500 million yuan, or US$76 million – would be earmarked for “economic and technological cooperation” between the five member countries of Brazil, Russia, India, China and South Africa. The rest would be used to top up lending by BRICS’ New Development Bank.

But the commitment is a fraction of the more than US$124 billion Xi pledged for the “Belt and Road Initiative” in May in Beijing.

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Addressing the BRICS summit in Xiamen, Fujian province, Xi also urged the bloc to play a bigger role in global governance, to support multinationalism and to prevent protectionism.

“Despite the differences in our countries, we are at a similar stage of development and share the same development goals,” Xi said.

“We should redouble our efforts to comprehensively deepen BRICS partnerships and expand BRICS cooperation.”

But he also said the five countries should have worked together to deliver more.

The members invested a combined US$197 billion overseas last year, but only 5.7 per cent was in BRICS countries, Xi said.

The summit has also been overshadowed by North Korea’s nuclear test on the weekend and a Sino-Indian border rift that was papered over just days before the Xiamen gathering.

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Xi underlined the need for connections between the countries, stressing the importance of better infrastructure links, of unlocking trade and investment, and of allowing for more flexible movement of currencies and financial products.

To that end, the bloc agreed to set up a BRICS local currency bond fund.

“We emphasise the importance of an open and inclusive world economy enabling all countries and peoples to share in the benefits of globalisation,” the bloc said in a statement on Monday.

“We will continue to firmly oppose protectionism. We recommit to our existing pledge for both a standstill and rollback of protectionist measures and we call upon other countries to join us in that commitment.”

The statement also stressed the group’s opposition to terrorism, and pledged to strengthen cooperation in the fight against corruption.

On the summit’s sidelines, the Indian delegation applauded the statement’s stand against terrorism. Some Indian media outlets said that for the first time the BRICS statement named and condemned various Pakistan-based terrorist groups, such as Lashkar-e-Taiba, which was blamed for a 2008 attack in Mumbai.

The leaders also vowed to give BRICS a voice on the international stage and reaffirmed the central role of the United Nations in international affairs.

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The bloc will hold talks with the leaders of Thailand, Mexico, Tajikistan, Egypt and Guinea on Tuesday.

Wang Wen, director of Renmin University’s Chongyang Institute for Financial Studies, said BRICS was not ready to accept new members but was open to dialogue with more countries.

“The existing BRICS mechanism is pragmatic and flexible, avoiding the rigidity of the Group of Seven and the inability of the Group of 20 to implement [policy],” Wang said.

Additional reporting by Liu Zhen