In how far have China and the BRICS contributed to a fragmentation of Global Economic Governance?
Since late 2000s and 2010s the number of actors, institutions and initiatives has multiplied
Especially China appeared on the sreen by 2000 when they started their huge investment/economic cooperation in 3rd world countries particularly Africa cental-, south- and south-east asia
Building up there own frameworks and create regions of great influence
Belt and Road initiative 2013
promotes trade and required infrastructure through huge investions (1.3 trillion USD by 2027) between China and over 100 other countries in Afrika, cental-, south- and south-east asia)
Developing own institutions
Asian Infrastructure Investment Bank
under chinese lead, founded by 57 states
institutional structore close to World Bank and regional bank what created competition and fostered the threat about China as new hegemon
BUT also focuses on a safeguard system in the fields of 1) environmental safeguard, 2) involuntary resettlement safeguards and 3) indigenous people`s safeguard
G20-T under the lead of Brasil and India, backed by China and G33 under India, mobilisied developing countries and so now they have allies in international institutions such as WTO, UN human right commission or eg one-china politics
But also BRICS
Alternative to G7 and as South-South cooperation
New Development Bank(multilateral development bank of BRICS)
Contingency Reserve Arrangement alternative to IMF and to enable central bank to compensate disbalances
not aligned with turning away from dollar as the B>RICS are deeply connected to the dollar-block and so removind disbalances can only be solved with USD
mirrors asymmetrics among the BRICS countries as they don’t oay in the same amount
What is the BRICS group? Which functions does it fulfill for ist members?
2006, BRIC engaged in a political dialogue for the first time
2009 first first BRIC summit
2011 South Africa joined
2016 BRICS accounted for more than 40% of the world`s population and 1/4 of the world economy
August 2023 enlarge their group size by 6 countries
Characterization:
as non-Western player, challengers and alternative to the OECD
by themself they use the narrative of South-South cooperation
Have agreed on the reform the global financial system
particularly reform of the Bretton Woods system and a new international reserve currency
BRICS summit 2023 underlined this: “world is multipolar, it is rebalancing and old ways cannot address new situations”
Different to the liberal world order of the US hegemony, China and the BRICS stress the souvereignty of states - communication on equal footing”
Function (Debiel/Wulf)
clearing house; redefine norms and opinions on global issues to get a talk in the world order
development and learing community with cooperation in selected sectors
“powerful successor” to the Group of 77 (development countries within the UN) and a counter model to the dominant West, aiming for global justice
As starting point of the foundation of multilateral, complemantary and competing international and regional organisations
Which limitations and internal contradictions does the BRICS group face?
China`s elites are not focused on providing public goods, they primarily follow national self-interest
ambiguous to global leadership
Asymmetric in power
Only China has the capacity to impact in the design of global institutions
But can change over time with regard to Indias development
BUT as China tried to built up more and more institutuions by itself, Russia and India voiced concers
Aymmetric economic power
until today they didn’t manage to become a free zone which would be a way around the rules from WTO
Growth slowed; Chinas growth fell to less than 7%, Brasil and Russia recession (2018)
BRICS depend on the existing system
e.g. CGA not aligned with turning away from dollar as the B>RICS are deeply connected to the dollar-block and so removind disbalances can only be solved with USD
BRICS lacks a vision for an alternative order
BRI competes with respective Russian approaches in Central Asian = Eurasia Economic Union (old Soviet countries)
Economic relationship between Russia and China is not on an equal footing
India rejects BRI as its rival Pakisatn is favoured by it
China criticises that the Tibetan governemnt’s exile is located in India
Are the new institutions created by China and the BRICS a challenge to the Global Liberal Order?
China for itself does challenge the US hegemony
Their institutions less
Until now, not really as the whole world order is still evry focused on the US-Dollar
compared close to insignificant
not aligned with turning away from dollar as the BRICS are deeply connected to the dollar-block and so removind disbalances can only be solved with USD
It shouldn’t be underestimated which great influence the BRICS have in core institutions that were built under US hegemony and were mainly shaped by the power of the formal Quad (US,EU, Canada, Japan)
Since 2004 there is a new Quad Brasil and India
And since 2008 China
Are in influential alliance as they can give the veto in decisions-making
As the WTO was mainly founded to reduce tariffs and other trade barriers, according to a liberal economy approach as the US hegemon it preferred, the BRICS were able to hit the US hegemony in its heart
G20-T under lead of Brasil and INdia, backed by CHina were able to reject a US-EU proposal on agriculture and demanded reductions in agricultural subsidies for countries from the Global north
G33 under India
China is a leading exporter and an exporter needs free-trade with many countries, also WTO
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