China should “curb” geopolitical competition with India and Russia to strengthen the BRICS grouping with the launch of the New Development Bank headed by eminent Indian banker K V Kamath, Chinese media said today.
“If China wants the BRICS to continue to deepen their ties, it should seek to act as a guiding hand, adopting an approach that is more prudent than pushy,” said an article in the state-run Global Times.
“That means, above all, curbing its geopolitical competition with India and Russia. At the same time, it should champion an inclusive global policy agenda that connects the developed and developing worlds,” the article said.
The official Chinese media gave extensive coverage to NDB bank’s inauguration in Shanghai yesterday.
Despite the NDB and USD 100 billion contingency fund, the future of the BRICS countries – Brazil, Russia, India, China, and South Africa – remains uncertain, the article said.
“The BRICS’ future remain uncertain, owing to strong economic headwinds. Brazil is racked by corruption scandals and stagnating output. Russia is probably in recession…India has been suffering from a depreciating currency and soaring public debts. China’s GDP grew by only 7.4 per cent last year, the lowest rate in 24 years. And South Africa’s growth has been weak, not least due to energy shortages,” it said.
But not everyone is bearish about the BRICS’ prospects and global influence, whether taken individually or as a grouping, it said.
The BRICS nations remain an economic force to be reckoned with, accounting for 25.7 per cent of world GDP, 42 per cent of the global population, and 17 per cent of total trade. They attract more than 18 per cent of the global total of foreign investment, hold 40 per cent of all foreign-exchange reserves, and account for 30 per cent of total foreign holdings of US Treasury bonds, it said.
“Moreover, the BRICS consumption markets are worth more than USD four trillion, equivalent to those of the eurozone,” it said.
In its editorial on the NDB starting its business with USD 50 billion capital, Global Times said its formation evoked suspicion in the West as the EU is still overwhelmed by Greek sovereign debt woes.
“In the long run, the NDB is expected to meet the developing world’s enormous needs for infrastructure. According to an estimate by the Asian Development Bank, USD 8.22 trillion of infrastructure investment is needed across Asia alone in the next decade, let alone in the rest of the developing world. The NDB is clearly regarded by some in the West as a rival to the IMF, the World Bank and the ADB, and a challenger of the established financial framework,” it said.
“It is time that the old and new banks should consider the possibility of co-development as well. Clinging to the dominance of outdated financial systems will not contribute to the greater good. It will require joint administration of a governing body to improve global financial architecture,” it said.