China is the central trade hub of BRICS

The Financial Times, in its coverage of the BRICS summit in Hainan China, somewhat acidly remarked, under the headline ‘China cements role as top of the Brics’:

‘The Brics group of big emerging nations – comprised of Brazil, Russia, India, China and, for the first time this year, South Africa – is becoming a China-dominated forum in which Beijing can push its evolving global agenda without the overbearing presence of the US.

‘As the third annual Brics leaders meeting wrapped up in the swampy, half-built resort town of Sanya, on the southern Chinese island of Hainan, it was clear that Beijing was firmly in charge.’

As the Financial Times has for many years covered events which were ‘firmly in charge’ of the US, without feeling the need to make any parallel comments, this would tend to indicate something of a bias in the FT’s coverage despite claims to objectivity. Furthermore the idea that India, Russia, Brazil or South Africa feel, or are, ‘dominated’ by China in the way that, for example, the IMF, NATO, or the World Bank have all been a ’US dominated forum’ is simply untrue. China is a powerful country – and so, in particular, are India, Russia and Brazil. BRICS has powerful partners within it, it is not dominated by any one country.

What is the case is that China forms an important trade hub between the different BRICS countries – as some excellent research published around the BRICS summit indicates and which deserves wide circulation.

Particularly striking is the chart below, adapted by the BBC from the World Bank, It shows how rapidly trade is developing between the two largest BRICS economies – China and India.

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China is also certainly intent on promoting trade among the BRICS countries – naturally including its own. As China Daily reported: ‘more than 500 business leaders attended the event… held during the summit. To boost intra-BRICS trade, these business leaders agreed to set up a secretariat in each country and widely solicit opinions and suggestions for bilateral trade and investment issues.’ 

The FT in its own coverage actually reveals the real situation: ‘China already accounts for about 12 per cent of trade in the rest of the Brics countries, a figure that is six times higher than at the beginning of 2000 and still growing rapidly…

‘Meanwhile, South Africa, Brazil, India and Russia devote only about 3 per cent of their resources to trade with each other and this share has barely changed during the past decade.

‘China’s trade with the other Brics countries last year increased by an average of 40 per cent, well above the 30 per cent increase in China’s overall trade, according to Yu Ping, vice chairman of the China Council for the Promotion of International Trade. “But it’s true that trade volume between the other four countries remains relatively low,” Mr Yu acknowledged.’

In short China has an important position because it is emerging as a central trade hubs for BRICS. Scarcely surprising as it is both the world’s largest exporter and its most rapidly growing importer. But trade is mutuallly beneficial. It does not constitute ‘domination’.

John Ross is currently Visiting Professor at Antai College of Economics and Management,Shanghai Jiao Tong University, where he leads research on globalisation and on China and the international financial crisis.
Check out his blog: http://ablog.typepad.com/keytrendsinglobalisation/ , or follow him on twitter @JohnRoss43

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