China

China (the People’s Republic of China) is the second largest economy, the largest industrial country and agricultural country in the world. After surpassing Japan to gain the world’s second rank in 2010, China’s GDP reached RMB 114.4 trillion in 2021, and the per capita GDP amounted to RMB 80,976.

 In 2021, China’s total import and export value of goods reached a record high of RMB 39.1 trillion, a year-on-year increase of 21.4%. The growth represents a steady increase in quantity and improvement in quality, and the stabilizing effect of foreign trade is better than expected. Denominated in US dollars, China’s trade volume was USD 6.05 trillion in 2021, crossing the USD 6 trillion line for the first time.

In 2021, China’s poverty alleviation campaign achieved a comprehensive victory. In line with the current standard, all the 98.99 million rural poverty-stricken people have been lifted out of poverty, all the 832 poverty-stricken counties and 128,000 villages have been removed from the list of poor regions. The regional overall poverty has been solved, and the arduous task of eliminating absolute poverty has been completed.

As labor costs rise and automation rates increase, China is transforming into a country emphasizing technology-driven smart manufacturing industry, and it’s shifting the manufacturing focus to high value-added products that are seen as the future drivers of the economy. But a lack of systematic vocational training and the reluctance of young people to work in factories have led to a shortage of skilled manufacturing workers and engineers in China, adding to the pressure on manufacturers. According to the Ministry of Human Resources and Social Security and other departments, the talent shortage in China’s top 10 key manufacturing sectors was close to 20 million in 2020 and will approach 30 million by 2025. 

According to the Global Financial Competitiveness Report 2021 by the Institute of World Economics and Politics, Chinese Academy of Social Sciences: Mainland China ranks 8th in the world in terms of global financial competitiveness, behind France by 0.1 points. Among the five first-tier indicators, the smallest gap between mainland China and the world leader is seen in financial competitiveness, where China is 16.2 points lower than the 1st-ranked United States. In the past 20 years, China’s financial sector has achieved sustained high growth, fostered the world’s largest and most profitable banking system, and built the world’s second largest stock and bond markets. Apart from the scale, China’s financial system has been significantly improved in terms of efficiency, dynamism and influence as an international financial center, with all the three sub-indicators ranking among the top 10 in the world. Among the five first-tier indicators, international financial governance capacity is the fastest improving one in China in recent years. 

Brazil 

Brazil’s GNP ranks first in Latin America. In addition to the traditional agricultural economy, its production and service industries are also prospering, and it has a natural advantage in raw material resources. The country enjoys the world’s largest deposits of iron, copper, nickel, manganese and bauxite. In addition, new industries such as communications and finance are also on the rise. Fernando Henrique Cardoso, former President of Brazil and leader of the Brazilian Social Democratic Party (PSDB), developed a strategy for economic development that laid the foundation for the subsequent economic revitalization.

As early as the 1960s and 1970s, Brazil had already entered the ranks of the less developed countries, and it had the basic conditions to become a major economic power more than 20 years ago. However, due to the long-standing inflation, it suffered from the “Latin American disease” of neither being able to be ranked among developed countries nor having the advantage of cheap labor. After being marginalized by the global economy for 30 years, it has finally emerged from the doldrums, and the strong economic growth for many years has paved the ground for its direct dialogue with the Western powers.

This set of economic reform policies, later carried forward by Brazil’s Workers’ Party president Luiz Inácio Lula da Silva, centered on the following measures: introducing a flexible exchange rate system; reforming the health and pension systems; and streamlining the system of government officials. However, some critics argue that the success of the party has been as bad as its failure, and that the corruption and bribery within the Brazilian Workers’ Party have largely shaken the foundation of the current government.

 In 1964, Brazil experienced a coup and the new military government came up with the “import substitution strategy”, which was to build high tariff barriers externally while relying on state support for industry internally. By virtue of the abundant natural resources and the injection of European and American funds, Brazil’s economy grew at an average rate of 11.2% from 1968 to 1973, which was known as the “Brazilian Miracle”. However, the disintegration of the Brazilian “consumer economy” has recently led to a larger economic crisis, which in turn has led to more unemployment. The country’s GDP contracted by 3.8% in 2015.

Russia

After the disintegration of the Soviet Union in 1991, Russia transitioned from a closed, centrally planned economy to an internationally integrated, market-based economy. Russia is already the world’s largest exporter of natural gas and the second largest exporter of oil.

The Russian economy, which emerged from the debris of the 1998 financial crisis like a phoenix from flame, has been rated investment grade by Standard & Poor’s, a noted equity research firm, among recent international credit ratings. The rise in oil and gas prices has certainly added drivers to the Russian economy. Through extraction and production, these two industrial bloodlines control one fifth of its national production and generate 50% of export trade output and 40% of the state revenue.

Among the BRICs, the four types of countries show the world different paths to great power: Russia, the successor to the former superpower, the Soviet Union, has inherited the remaining power of the former superpower, and regrouped and returned to great power status after a major recession. 

In addition, Russia is the largest producer of palladium, platinum and titanium. Somewhat similar to the situation in Brazil, the biggest threat to the Russian economy is hidden in politics. Although Putin’s government has managed to increase its GNP by 30% and its disposable national income by a significant amount during his five-year term, the democratic failures of the authorities in handling the Yukos oil case have become a poison for forward investment and are tantamount to an invisible sword of Damocles. Despite Russia’s enormous size and energy wealth, the government cannot rest on its laurels in the face of future developments if it lacks the institutional reforms necessary to effectively curb corruption.

BRICS Russia’s two main challenges: How to curb inflation and reduce deficit

As the economy continues to recover, how to ensure continued healthy economic growth in 2010 was the top priority for the Russian government. From the perspective of Russia’s economic situation, suppressing inflation and reducing deficit were the two major challenges the government was currently facing. 

The Russian economy continued to recover in 2010, but the growth slowed down in the second half of the year due to the weakening recovery in major world economies and a rare domestic drought, with the economy growing by only 4% for the year. Driven by rising international energy prices, the Russian economy grew by 4.4% year-on-year in the first two months of 2011. The government predicted the economy to grow by about 4.2% for 2011 as a whole.

Affected by the drought in 2010, the price of agricultural products rose sharply, leading to a rise in food prices. In 2010, the annual inflation rate reached 8.8%, far exceeding the government’s expectations. In 2011, inflation remained severe. Driven by rising food prices, the Russian consumer price in February rose by 9.7% over the same period of the previous year.

 Former Russian President Dmitry Medvedev demanded that the annual inflation rate be kept at 4% to 5% for the next three years. To achieve this goal, the Russian government started to calm food prices and intervened in the market by using grain reserves since February 2011. In addition, the Central Bank of Russia announced a 0.25 percentage point increase in the refinancing rate at the end of February, the first time since April 2009, releasing signals to the market of a moderate tightening of credit.

Despite various measures taken to curb inflation, experts generally believed that Russia’s inflation would remain high in the future. The Russian Ministry of Economic Development predicted the inflation to be 6% to 7% in 2011. However, Dmitry Belousov, chief expert of the Russian Center for Macroeconomic Analysis and Short-Term Forecasting, believed that even if there were no more natural disasters that summer, Russian inflation would remain at the level of 8% to 8.3%. And Evgeny Yasin, a leading Russian scholar, held that in order to stimulate economic development, the government would have to raise fiscal spending and increase the scale of borrowing, which would further exacerbate inflationary pressure and the annual inflation rate might reach 8.9%.

As for the fiscal deficit, Russia’s fiscal deficit in 2010 was 1.795 trillion rubles (about USD 63.9 billion), accounting for about 3.9% of GDP. The Ministry of Finance believed that the deficit level in 2011 might be less than 2% due to the positive international oil market. Finance Minister Kudrin said that if oil prices reached USD 100 per barrel, Russia would be expected to achieve fiscal balance in 2014.

However, analysts believed that as a major energy exporting country, higher oil prices could certainly increase fiscal revenues and foreign exchange reserves significantly, but it was not always beneficial to the Russian economy, because high oil prices would suppress consumer demand in other countries and further exacerbate global inflationary pressures. It in turn would bring imported inflationary pressures to Russia. In addition, it would also lead to an influx of hot money into Russia, increasing economic risks. 

Experts had different views on the future course of the Russian economy. According to the Institute of the Development Center of the Russian Higher School of Economics, the pace of economic growth might continue to slow in 2012 due to the weakening effect of economic stimulus policies, the limited contribution of investment and consumption to economic growth, and the lack of strong domestic growth areas in the context of possible fluctuations in international oil prices. According to the Institute of Economic Forecasting of the Russian Academy of Sciences, the Russian economy was expected to grow by 6.9% in 2012 and the inflation rate would drop to 7.8%, driven by the continued high oil prices in the coming years.

 At a deeper level, the macroeconomic development of the Russian economy is constrained by its structural deficiencies, and its economic growth is overly dependent on energy and raw materials, especially oil and gas exports. Russian Prime Minister Vladimir Putin said in early 2011 that more than half of fiscal revenues in 2010 came from the energy sector. This monolithic approach to economic growth has left Russia’s economy without endogenous growth drivers, resulting in low resilience to external risks. Despite Russia’s strong advocacy of economic restructuring and reducing its over-reliance on the energy sector, economic restructuring and transformation of the growth model could not be a one-day process. Maintaining stable economic growth remained an extremely difficult task for the government, given that new economic growth areas had not been formed and the external economic environment remained highly uncertain.

On January 1, 2015, Russia began its rotating presidency of the BRICS. Russian President Vladimir Putin said that he would use the presidency to further increase the influence of BRICS countries in the world.

In his New Year’s message to Brazilian President Rousseff, Putin said that during the Brazilian presidency in 2014, a series of meetings based on understanding and mutual trust were held, with fruitful results achieved. During its presidency in 2015, Russia would cooperate with all other countries to further boost the influence of BRICS countries in the international arena.

Putin said that the BRICS cooperation mechanism is effective in promoting industrial production and technological exchanges, and is very useful for countries to exchange experience in social areas such as health care, education and science. The five countries shared the same position in the field of international information security, where cooperation was expected to take place, and new cooperation projects were about to emerge in the fields of energy, mineral development and processing, and high-tech agricultural processing.

The BRICS summit was held in the Russian city of Ufa in early July 2015.

India

India, the second most populous country in the world with a population of 1.3 billion, is gradually replacing China’s position in the world as a cheap labor market and becoming a new labor market for countries to compete for. More than 6,000 listed companies have also made its stock market bigger than ever. Over the past 20 years, India’s economy has grown steadily at an average rate of 5.6% per year, and behind the economic foreground is a highly qualified employment force.

India is the world’s largest parliamentary developing country. Two decades ago, it was one of the poorest countries in the world, and its rapid economic growth lasted only a dozen years, but in the fields of software, pharmaceuticals and other industries, it has already reached the international advanced level, in addition to the well-developed financial services system. The country is on a path of transformation from a poor and backward state to a major economic power.

 According to preliminary statistics, Western companies are becoming increasingly attractive in the eyes of India’s approximately 23 million college graduates. A quarter of the largest 1,000 companies in the United States use software developed in India. The Indian pharmaceutical industry has also gained a significant presence in the global market.

Forty percent of the world’s “generic drugs” (pharmaceuticals whose patents have expired) are produced in India, and this industry has led to a rapid rise in disposable personal income at double-digit rates, along with the emergence of an enjoyable and consumption-loving middle class in Indian society. In addition, major infrastructure projects, such as the 6,000-kilometer highway network and the booming export trade, have provided a strong backbone for economic development.

Of course, the Indian economy also has weaknesses that cannot be ignored, such as inadequate infrastructure, high fiscal deficits, and excessive dependence on energy and raw materials. On the political front, changes in social ethics and morality, tensions in Kashmir, serious religious conflicts, and frequent terrorist attacks may trigger economic turmoil.

South Africa

In view of the great potential of the BRICS cooperation mechanism, the Republic of South Africa, as the largest economy in Southern Africa, had been longing to join the mechanism.

Since 2010, the South African government had been actively promoting the accession, and President Zuma started lobbying the BRICs countries since the beginning of the year. He visited Brazil, India, Russia and China from April to August 2010. Zuma said that cooperation with these emerging market countries would bring opportunities for South Africa’s economic growth.

 The inclusion of South Africa in the cooperation mechanism will also enable the BRICs to further strengthen economic and trade relations with Southern African countries. Many South African companies have branches in Southern African countries, and the geographical proximity and common customs provide them with the advantage of quick information circulation and low transaction costs when investing in these relatively underdeveloped countries. If the investment and trade of the four countries can transit through South Africa, the return rate will be significantly increased.

In addition to the economic field, South Africa’s participation in the BRICS cooperation mechanism will facilitate the five countries to coordinate their positions on major global and regional issues such as global climate change, UN reform and poverty reduction, so as to better build a new international political order that is fair and balanced.

To facilitate employment is the most important challenge facing South Africa, and it is far from enough to rely on South African enterprises alone. It’s needed to vigorously attract foreign investment, and the summit is rightly providing an excellent opportunity for introducing foreign investment. South Africa is lagging in infrastructure development, especially the railroad network lags far behind other BRICS countries, which has become a bottleneck limiting the flow of goods and services. This sector can provide enormous investment opportunities for foreign investors.

In addition, South Africa suffers from a relatively homogeneous energy structure, and a tight supply of electricity, which is another important factor limiting the further development of its economy. For this reason, the state government has proposed to vigorously develop new energy sources and increase the proportion of new energy applications such as solar and wind energy.

Business cooperation is an important part of the BRICS cooperation mechanism. Other BRICS countries have leading advantages in new energy development and applications. For example, China’s solar energy products are quite popular in the South African market, Brazil has accumulated rich experience in developing bioenergy, India and Russia’s achievements in new energy R&D are worth learning from, while South Africa is a global leader in coal-to-oil technology. BRICS countries can boost cooperation in the field of new energy.

South African mining companies wish to cooperate with BRICS investors, but such cooperation should not only “provide fish”, but also “teach how to fish”, which can effectively help local enterprises to expand production capacity, improve workers’ skills and benefit local communities.

As the only African member of the BRICS cooperation mechanism, South Africa is also the gateway for trade and investment from BRICS countries to Southern Africa. Leveraging the sales and production networks of South African companies in Southern Africa, BRICS products and services can have timely and convenient access to the 15 countries and regions of the Southern African Development Community. South Africa’s participation in the BRICS cooperation mechanism has made the emerging economies more representative by giving them an African voice.

BRICS member countries have become the largest trading partners of Africa, including South Africa, and other BRICS countries have recognized the huge development potential of the African regional market and will seize the opportunity. In the coming months, Africa will establish FTAs between regional development economic cooperation agencies, including the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the Economic Community of West African States (ECOWAS). Africa is pleased that other BRICS partners will see South Africa as a “springboard” into the African market and are willing to provide advice on economic development opportunities in Africa.

The BRICS Conference of Industry Ministers was established in 2015 as a regular exchange mechanism between the industrial authorities of the BRICS countries. The industrial counterparts of BRICS countries are the Brazilian Ministry of Economy, the Russian Ministry of Industry and Trade, the Indian Ministry of Commerce and Industry, and the South African Ministry of Trade, Industry, and Competition. The BRICS Industry Ministers' Meeting is generally held every 1-2 years, and as of 2023, 7 Industry Ministers' Meetings have been held, mainly discussing the focus areas of industrial cooperation of concern to all parties, and deliberating and adopting the Declaration of the BRICS Industry Ministers' Meeting.

On October 20, 2015, the first BRICS Conference of Industry Ministers was held in Moss, Russia. The theme of the meeting is "BRICS Industrial Cooperation: New Opportunities for Growth". The BRICS Ministerial Declaration on Industry was adopted to promote cooperation among BRICS countries in areas such as investment, modern equipment and new technologies, mineral resources, pharmaceutical industry, research and development innovation, and communication technology.

On July 29, 2017, the Second BRICS Conference of Industry Ministers was held in Hangzhou. The theme of the meeting is "Opportunities and Challenges for the Development of Manufacturing Industry in the Context of the New Industrial Revolution". The Action Plan for Deepening Industrial Cooperation among BRICS Countries was adopted, encouraging BRICS countries to carry out cooperation in areas such as production capacity, industrial policy coordination, new industrial infrastructure, technology development and innovation, small and medium-sized enterprises, and standards.

On July 4, 2018, the Third BRICS Conference of Industry Ministers was held in Maghresburg, Northwest Province of South Africa, with Vice Minister Xin Xin Guobin leading a delegation to attend. The theme of the conference is "Strengthening Economic Partnership, Promoting Inclusive Growth, and Promoting the Digital Industrial Revolution". The meeting approved the initiative jointly submitted by me and South Africa to establish the "New Industrial Revolution Partnership" among the BRICS countries, focusing on five key areas: digitization, industrialization, innovation, inclusiveness, and investment, to promote the BRICS countries to seize the important opportunities of the New Industrial Revolution and achieve common development.

On August 24, 2020, the Fourth BRICS Conference of Industry Ministers was held via video. The theme of this meeting is the prospects, measures, and priorities for strengthening cooperation among BRICS countries and promoting industrial development in the context of the New Industrial Revolution. The meeting passed the Joint Statement on Strengthening Cooperation in the Field of the New Industrial Revolution, emphasizing that BRICS countries should unite more closely, carry forward the spirit of BRICS, deepen BRICS cooperation, seize development opportunities, jointly face challenges, and promote sustainable economic and social development.

In August 2021, the 5th BRICS Conference of Industry Ministers was held via video and adopted the Joint Declaration of the 5th BRICS Conference of Industry Ministers. All parties welcomed China's establishment of an innovation base for the BRICS New Industrial Revolution Partnership and reached consensus on initiatives such as the BRICS Industrial Capacity Center and BRICS start-ups cooperation, A new situation has emerged where multiple parties have jointly promoted the implementation of the New Industrial Revolution partnership.

On May 23, 2022, the 6th BRICS Industry Ministers' Meeting was held in Xiamen, Fujian Province in video format. The theme of the conference is "Deepening Innovation Cooperation in the Field of the New Industrial Revolution, Promoting Stronger, Healthy, and Resilient Sustainable Development". The meeting reviewed and approved the Joint Declaration of the 6th BRICS Conference of Industry Ministers, emphasizing industrial chain supply chain cooperation, fully utilizing mechanisms such as BRICS innovation bases and industrial capacity centers, building a BRICS industrial cooperation network, promoting the free flow of funds, goods, personnel, technology, and services, deeply exploring the development experiences of BRICS countries, strengthening sharing and exchange, and jointly creating an open, fair, and just development environment.

On August 7, 2023, the 7th BRICS Industry Ministers' Meeting was held via video. The theme of the conference is "Promoting the Transformation and Upgrading of the Manufacturing Industry, Establishing a Sustainable Industrial Chain Supply Chain". The meeting passed the Joint Declaration of the 7th BRICS Conference of Industry Ministers, which reached important consensus on topics such as digital transformation, cooperation with small and medium-sized enterprises, and enhancing the resilience of industrial and supply chains in BRICS countries. It further clarified the goals and visions of policy exchange, talent cultivation, project development, and other areas of cooperation, and appreciated the work carried out by the Xiamen Innovation Base of the BRICS New Industrial Revolution Partnership, Welcome the Chinese side to continue hosting a series of activities such as the BRICS New Industrial Revolution Partnership Forum, competitions, and exhibitions.

The BRICS Conference of Ministers of Communications was established in 2015 as a regular exchange mechanism between the BRICS communication authorities. The communication counterparts of BRICS countries are the Brazilian Ministry of Communications, the Russian Ministry of Digital Development, Communications and Mass Media, the Indian Ministry of Communications, and the South African Ministry of Communications and Digital Technology. The BRICS Conference of Ministers of Industry and Communications is generally held once every 1-2 years. As of 2023, 9 meetings of Ministers of Communications have been held, mainly discussing the focus areas of cooperation in the communication industry of concern to all parties, and considering and adopting the Declaration of the BRICS Conference of Ministers of Communications.