China & World Economy / 111126, Vol. 24, No.

4, 2016 111

The BRICS and the G20

Huifang Tian*

Brazil, Russia, India, China and South Africa (BRICS) have come together economically
as a group since 2009. Their cooperation has been driven not only by economic and
political factors, but also the failure of the existing global economic governance
framework to satisfy the real needs of these countries. In this paper, we analyze how the
BRICS moved from a nancial category into a political group, and are progressively
developing from a dialogue-based platform into a full-edged mechanism of long-term
coordination on a wide range of key issues relating to the world economy and politics.
We also analyze how the BRICS have coordinated their positions in the G20, pushing
for deep reform in global governance. Then, given the major hindrances to cooperation
among the BRICS, including the challenge of economic transition, weak geopolitical
links, complicated internal and external relations and inadequate governance
capabilities, the present paper speculates on how the BRICS can use the opportunity
arising from China taking the G20 presidency in 2016 to improve the cohesiveness and
inuence of the BRICS in terms of their agenda, organization and deliverables.

Key words: BRICS cooperation mechanism, G20, global governance

JEL codes: F15, H41, P26

I. Introduction

The inaugural Brazil, Russia, India, China and South Africa (BRICS) summit was held
in 2009, and the group have been coordinating their G20 positions ever since. While
they and emerging economies more generally have been pushing for reform in global
economic governance, their national interests and world views differ, making it difcult
to formulate a unied position on a range of global issues. The present paper considers
how the BRICS summit is evolving in terms of its agenda, organization and deliverables
and what can be achieved in 2016 as China becomes the rst BRICS to chair the G20.
The rest of the paper is organized as follows. Section II focuses on the rise of the
BRICS. Section III discusses the cooperation of the BRICS and their main achievements

*Huifang Tian, Senior Research Fellow, Institute of World Economics and Politics, Chinese Academy of
Social Sciences, China. Email: tianhf@cass.org.cn. The author is grateful for the support of the National
Social Sciences Fund Major Project (Grant. No. 14ZDA081).

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112 Huifang Tian / 111126, Vol. 24, No. 4, 2016

together. Section IV analyzes the role of the BRICS in the G20 and in global governance
Section V identies the main challenges facing the BRICS. Finally, Section VI makes
some recommendations on how to deepen the BRICS countries cooperation through
Chinas G20 presidency.

II. The Rise of the BRICS

The BRICS economies all are major regional powers that comprise a large portion of
the population and hold a considerable portion of world resources. They share several
features (see Truman, 2006): (i) they are developing countries who present relative good
economic performance and high potential; (ii) they are systemically important countries
for the world economy and, therefore, their national performances have profound
implications both regionally and globally;1 and (iii) they are able to exert inuence on
the governance of the global economy. These common features have led the BRICS
countries to form a coalition of developing countries and these governments have some
weight in decision-making at the international level. The fact that the BRICS have
come together economically as a group reects not only their interests arising from their
economic cooperation and complementarities as well as political alliances, but also the
failure of the existing global economic governance framework to satisfy the real needs
of these countries.
As early as the 1990s, the BRICS economies actively participated in the building
of regional cooperation organizations (Zhang and Shen, 2012), including the Mercosur,
established in 1991, the Indian Ocean Rim Association for Regional Cooperation,
created in 1995, the South American Common Market, established in 1991, the Shanghai
Cooperation Organization, established in 1996, the ASEAN 10+1 and 10+3 cooperative
framework, launched in 1997, the Eurasian Economic Community, established in 2000,
and the African Union, set up in 2002. With the rising economic openness and strength
of the BRICS, regional cooperation mechanisms could no longer satisfy the need of the
BRICS countries to improve governance to tackle global or cross-regional issues.
Even more importantly, since the end of the 1990s, when Brazil and Russia began
to benet from high and growing demand from other large emerging economies, most
notably China, the growth trajectories in the BRICS started to become intertwined. Since
the start of the new millennium, the emerging economies as a group have gradually and
steadily become a major engine driving the growth of the world economy (see Figure 1),

1
The Financial Sector Assessment Program, jointly launched by the IMF and the World Bank in 1999,
identied some economies as been systemically important, primarily including the G20 countries.

2016 Institute of World Economics and Politics, Chinese Academy of Social Sciences
 The BRICS and the G20 113

Figure 1. Economic Growth in Developed Economies and the BRICS Countries, 20062015

Developed Economies

-2
-4
-6

Source: IMF (2015).

Note: Data for the years 2014 and 2015 are projections.

although not independent from economic developments in developed economies, whose

economic, nancial and trade roles remain prominent.
In fact, the rise of the BRICS countries as a group, with an impact on global
governance, is linked to their dramatic growth rates since the 1990s. Over the
past 20 years, while the World Bank and the IMF have advocated the Washington
Consensus for the emerging markets, the crisis in 2008 brought forward the question of
whether the BRICS have abandoned aspects of these policies (Ban and Blyth, 2013).
Following the crisis, the ve nations each started to pursue an independent policy stance
and placed emphasis on the important role of government in economic development to
achieve long-term stable economic development. The BRICS represent approximately
40 percent of the world population, generate approximately 20 percent of world output,
have accounted for 50 percent of global growth since the end of 2009 (IMF, 2013), and
hold an estimated US$4.7tn in combined foreign reserves (Peng, 2015).2 The rise of the
emerging-market economies has changed the global economic landscape and has played
a crucial role in the globalization of many industries dominated by specialized and
module-based production processes organized through global value chains (Armijo and
Roberts, 2014). The current international division of labor, together with the increasingly
close economic and financial links among different economies, makes it impossible
for any country to isolate themselves from the vagaries and gyrations of international
economic cycles.

2
In late August 2015, the foreign reserves of China, Russia, India, Brazil and South Africa were US$3.5573tn,
US$366.3bn, US$349bn, US$368.2bn and US$46.1bn, respectively (see Peng, 2015).

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Although each of the BRICS countries wield great inuence on the macroeconomic
environment in their respective geographical regions (Gagne, 2011), it is evident that
projecting their inuence at the global level cannot be achieved by relying exclusively
on the regional bases to which they belong. Therefore, the BRICS have chosen to move
beyond regional performance and to become aligned in the hope of converting economic
success into political inuence.
To change the unfair and unreasonable distribution of benefits in todays world,
and to reduce the adverse effects caused by the non-neutrality of global governance, the
BRICS countries established a new cooperation mechanism to promote the reform of
political and security governance structures in the United Nations and the international
nancial, monetary and trade system. The cooperation of the BRICS countries reects
not only their own interests but also their inclusiveness of the interests of other countries.
Their cooperation will advance progressive changes in the international system and
minimize the aftermath of the dramatic transformation of the world structure (Xu, 2013).
Since the 1970s, the traditional multilateral agencies of the United Nations have
failed to solve economic problems in a swift and effective manner. The G7 emerged as
a more efcient and capable entity involved in global economic governance. However,
the 2008 global nancial crisis has gradually made it evident to the G7 economies that
the BRICS countries, as important players in the world economy, are indispensable
contributors to global governance. From 2004, the G7 started to invite Chinese nance
officials to attend the G7 finance ministers meeting; in 2005, the G7 invited finance
ministers and central bank governors of all members of the BRICS to attend the
meeting. In 2005, for the first time, the G8 Summit invited leaders from China and
India to attend the meeting. As there is a big difference between attending a meeting as
invited attendees and being present at a meeting as representatives of member states,
representatives of the BRICS countries have worked together to seek formal inclusion
within the existing global economic governance architecture. In 2006, the foreign
ministers of Brazil, Russia, India and China met together for the first time, which
thereafter has continued on an annual basis. In 2007, the developed economies formally
launched the G8 Heiligendamm Process,3 further enhancing the relationship of the G8
with emerging countries, including China, India, Brazil, South Africa and Mexico,
through topic-centered dialogues on global issues, such as the protection of intellectual
property rights, investment liberalization, economic development, climate change and
the effective utilization of energy. Two years later, the BRIC cooperative mechanism

3
At the G8 Summit in 2007, the G8 launched the Heiligendamm Process for structural dialogues between the
main developed economies and major developing powers on global issues.

2016 Institute of World Economics and Politics, Chinese Academy of Social Sciences
 The BRICS and the G20 115

was formally established, and the BRIC countries had gradually shaken off their role
as bystanders to become main players and rule-makers in international economic
coordination and rule-making. The developed world did not expect the full-fledged
cooperation of the BRICS countries. However, their reduced bargaining power has
pushed BRICS countries to act as aspiring guarantors of stability in global governance
(Oliver, 2014).

III. Cooperation of BRICS and Main Achievements

In 2013, the BRICS cooperation mechanism underwent an important transition. Having

only been established 5 years previously, the development of the BRICS mechanism was
facing many challenges. Among the ve member states, there were internal divisions
concerning the direction of BRICS cooperation. For example, Russia emphasized that
the BRICS should focus on political and security cooperation, while China, India,
Brazil and South Africa stressed the importance of economic cooperation, including
cooperation in global economic governance and substantial economic cooperation
among BRICS members. After tough negotiations, under the initiative of China, at
the Durban Summit, the ve countries nally reached a compromise and consensus of
progressively developing BRICS into a full-edged mechanism of current and long-
term coordination on a wide range of key issues in the world economy and politics.4
The agenda of BRICS meetings since then has considerably widened to encompass
topical global issues, such as the international economic and financial situation,
millennium development goals, climate change, food and energy security, the role and
function of institutions of global governance, especially the function of the UN, the IMF
and the World Bank Group, and other important issues, like international terrorism, and the
political situation in the Middle East, North Africa regions, Afghanistan, Iran and Syria.
The BRICS countries have now formed a full-scale and multi-layer cooperative
mechanism. Seven summits have been held so far. BRICS leaders have also met
during other multilateral meetings, such as the G20 summits. These leaders include
foreign ministers, finance/economic ministers, trade ministers, agriculture ministers,
health ministers, education ministers, science and technology senior ofcials, national
security advisers and representatives from national statistical authorities. BRICS foreign
ministers have also met regularly at the United Nations General Assembly since the
rst meeting in September 2006. The rst meeting of the BRICS economic and nance

4
See the Fifth BRICS Summit Declaration in 2013, available from: http://news.xinhuanet.com/english/
china/2013-03/28/c_124512026.htm.

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ministers was held in November 2008, and the rst meeting of agriculture ministers was
in March 2010. Various senior ofcials and working groups also meet to discuss specic
areas, such as state-owned enterprises, corruption, population growth, science and
technology, economy and trade, culture, agriculture and justice.
Apart from participating in ofcial meetings, the BRICS also engage in a number
of more informal initiatives, such as establishing BRICS friendship cities and banking
alliances, financial forums, cooperative forums, entrepreneur forums to coordinate
business activities, and think tank forums for coordinating research institutions.
The economic cooperation within the BRICS countries has been achieved
gradually, with most cooperative projects subject to a full feasibility analysis before
implementation. Since 2011, a great deal has been achieved through the BRICS
cooperation mechanism (see Table 1), the most important accomplishments being
the establishment of the BRICS Development Bank and the Contingency Reserve
Table 1. Main Results of BRICS Summits, 20092015
Time Place Main agenda and outcomes
BRIC cooperation mechanism formally launched
First BRIC Discussion on international nancial institutional reform, grain security,
June 2009 Yekaterinburg, Russia
Summit energy security, climate change and future of the BRIC

Second Initial formation of the BRIC cooperation mechanism

BRIC April 2010 Brasilia, Brazil Discussion on the global economic and nancial situation, international

Summit nancial institutional reform, climate change, dialogue and cooperation of BRIC

Third South Africa became a new participating member and BRIC became BRICS

BRICS April 2011 Sanya, China Sanya Declaration launched; decided to strengthen exchanges and

Summit cooperation in nance, business, science and technology, and energy

Discussion on the possibility of establishing the BRICS Development Bank
Fourth Determined the 2010 governance and quota reform plan should be
BRICS March 2012 New Delhi, India implemented before the IMF/World Bank annual meeting in 2012
Summit Signed two agreements on expanding BRICS home currency settlement and
lending business scale
Decided to establish the BRICS Development Bank and foreign exchange
reserve fund
Fifth
Announced establishment of BRICS business council and think tanks
BRICS March 2013 Durban, South Africa
council
Summit
Pushed building of partnership between BRICS and African countries
Held dialogue between BRICS and African leaders for the rst time

Sixth BRICS Development Bank was formally established, headquartered in

BRICS July 2014 Fortaleza, Brazil Shanghai

Summit Established BRICS contingency reserve fund

Approved the Strategy for the BRICS Economic Partnership
Expanded cooperation in trade, investment, manufacturing, minerals
Seventh
processing, energy, agriculture, science and technology, innovation and nancial
BRICS July 2015 Ufa, Russia
cooperation
Summit
Planned to devise a trade, economic and investment cooperation roadmap
for the period until 2020
Source: Complied by the author based on BRICS summit materials.
Note: Before 2011, there only four countries, known as BRIC. In 2011, South Africa became a new number,
BRICS
named was formed.
BRICS.

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 The BRICS and the G20 117

Arrangement. In 2013, the Development Bank Working Group (set up in 2012)

submitted a feasibility study report regarding the establishment of the BRICS
Development Bank, which was approved, in principle, by the BRICS leaders that same
year. In 2014, it was decided at the sixth BRICS leaders annual meeting to launch the
BRICS Development Bank, with a capitalization of US$100bn, and to establish the
BRICS Contingent Reserve Arrangement (CRA), with an initial amount of US$100bn,
to strengthen the global financial safety net and complement existing international
monetary and nancial arrangements. The BRICS leaders also agreed to cooperate in
many other areas, including infrastructure, science and technology, innovation, and
R&D. At the BRICS Ufa Summit in 2015, BRICS leaders further put forward a plan to
develop their trade, economic and investment cooperation roadmap for the period until
2020 in an attempt to achieve the goal of building an integrated mega market, a multi-
layer circulation system, a landairsea linkage network and closer cultural ties. So far,
CRA has entered into force following ratication by all BRICS states and the BRICS
Development Bank has been established (now the New Development Bank [NDB]). In
April 2016, the rst batch of loans, amounting to US$811m (RMB5.25bn), for which
the BRICS countries are joint investors, were made. These loans are for four renewable
energy development projects in Brazil, China, North Africa and India. The NDB is the
BRICS rst institution and its establishment is driving the BRICS mechanism to shift
from the conceptual stage to a real entity, from a forum to an institution. It will also
provide opportunities and a driving force for the development of the BRICS countries.
Moreover, the BRICS countries have strengthened their economic and trade links
through signing regional, cross-regional and bilateral trade agreements. Although
they have not planned to establish a systematic and exclusive international economic
cooperative organization, the BRICS countries have made use of existing systematic
frameworks to push forward their trade and economic cooperation and international
relations.

IV. BRICS in the G20 and in Global Governance

Since the 2008 global financial crisis, some international organizations have been
blamed for failing to do a good job in crisis pre-warning and after-crisis management.
For example, earlier failures in the IMFs surveillance and its lack of legitimacy
constrained its ability to play a central coordinating role in the response to the crisis
(Thomas, 2014). Therefore, it is necessary to improve the rule-making procedures and
the decision-making processes of international organizations, to increase their decision

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execution efciency, and to optimize their performance evaluation systems, to prevent

them from becoming too bureaucratic and minimizing rent-seeking behaviors. This is
important for achieving a sound shared governance system.
The G20 is the rst global economic governance mechanism in which the BRICS
countries have participated as founding and core members. In 1999, the USA initiated
the G20 nancial ministers meeting; this was the rst time that the nance ministers
of emerging-market economies participated in multilateral economic and financial
cooperation. During each G20 meeting of nance ministers and central bank governors,
although the BRICS nance ministers and central bank governors also held meetings,
they did not release formal statements. Only the regular communiqus of G20 nance
ministers and central bank governors meetings were released.
The BRICS countries also participate in regular informal leaders meetings during
the G20 summits. This not only helps to improve the BRICS countries influence
through forming an alliance, but also provides a platform for the BRICS countries to
express their opinions and stances on global issues. For example, in 2012 at the G20
Cannes Summit, the BRICS leaders jointly backed an increase in resources available to
the IMF and in the resource base of multilateral development banks, and together urged
the G20 to issue a strong statement of intent to combat the international slowdown
and the effects of the eurozone crisis. In 2013, leaders at the G20 Petersburg Summit
expressed their concern regarding the stalling of the IMF reform process and unintended
negative spillovers of unconventional monetary policies of certain developed economies
and emphasized that the eventual normalization of monetary policies needs to be
effectively and carefully calibrated and clearly communicated; in 2014, the BRICS
leaders exchanged views and shared their perspectives on the main issues on the
G20 summit agenda, such as: promoting economic growth, job creation, investment,
infrastructure construction and trade; strengthening the nancial system and cooperation
on tax matters; and the need to continue the IMF reform processes. In 2015, during
the G20 Summit in Turkey, the BRICS leaders emphasized their desire for a quick
and sustained global economy recovery, to diversify trade, transport and technological
exchanges, and to reform the global nancial system, including increasing the role of
developing countries in the IMF.
Therefore, the inuence of the BRICS on the G20 agenda and global governance
mainly focuses on the following four aspects:
The first is to promote the reform of global financial governance, which can be
achieved through the following ve endeavors:
1 Pushing the IMF and the World Bank to reform governance structure and to raise
the representativeness of the emerging and developing countries (see Table 2). Great

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 The BRICS and the G20 119

Table 2. Share Changes of BRICS Countries after Quota Reform of the IMF and the World Bank
After World Banks reform in
After IMFs reform in 2015
2010
Country
Quota (%) Changes Quota (%) Changes

USA 17.398 0.263 15.85 0.51

Japan 6.461 0.092 6.84 1.01
China 6.39 +2.396 4.42 +1.64
German 5.583 0.524 4.00 0.48
France 4.225 0.277 3.75 0.55
UK 4.225 0.277 3.75 0.55
India 2.749 +0.308 2.91 +0.14
Russia 2.705 +0.212 2.77 0
Brazil 2.315 +0.533 2.24 +0.18

Sources: IMF website (available from: http://www.imf.org/external/np/pp/eng/2010/103110.pdf)

and World Bank website (available from: http://siteresources.worldbank.org/DEVCOMMINT/
Documentation/22553921/DC2010-006(E)Voice.pdf).

progress was made in relation to the voting right reform of the World Bank in 2010, with
3.13 percent voting power shifted toward developing countries. Although the reform of
the IMF was to have started in 2010, it was delayed until December 2015 because of
the position of the US Congress. BRICS are now granted a total of 14.7 percent of the
voting share (compared to 11.5 percent previously).
2 Appealing to major global economies to strengthen macroeconomic policy
coordination, improving the effective nancial supervision and the rescue of the global
nancial safety net, and improving the exibility and effectiveness of the crisis rescue
measures of the IMF.
3 Supporting the establishment of the Financial Stability Board (FSB) and the Basel
Committee on banking supervision to push the IMF to devise cross-border capital flow
regulatory rules, strengthening regulation of short-term international capital ows, and actively
applying the series of standards in their respective domestic regulations and guidelines.
4 Contributing to reserve currency diversication and major currency swaps, pushing
for reform of the SDR system, requiring the IMF to reassess the composition of the
basket and allow more currencies that meet its standards to be included in the basket. In
2015, the IMF approved the inclusion of Chinas RMB with a weighting of 10.92 percent
in the new SDR basket. Although the weighting is far lower than 41.73 percent for the
US dollar and 30.93 percent for the euro, it is an important milestone in the integration
of the rst BRICS economy into the global nancial system.
5 Urging major developed countries to handle the sovereign debt issue

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appropriately, reducing the negative policy spillover effect, and creating a favorable
external environment for the economic development of developing countries.
Second, resisting protectionism and supporting a strong multilateral trading
cooperation system should be G20 priorities. Through the G20 mechanism, the
BRICS countries have pushed G20 leaders to twice make commitments to prevent
trade distortions in global commerce. The first was in 2008. Leaders of the G20
publicly committed to a standstill on protectionism from 2008 to 2013. The second
was at the Petersburg Summit in 2013. G20 leaders extended the standstill period
to 2016. Moreover, the BRICS maintain the WTOs hard-core status in multilateral
trade system. The G20 Brisbane Communiqu in 2014 specifically noted that We
commit to implement all elements of the Bali package and to swiftly decide a WTO
work programme on the remaining issues of the Doha Development Agenda to bring
negotiations back on track.5
Third, acknowledging that climate change is one of the greatest challenges
facing humankind, the BRICS have actively advocated for all countries to adopt the
UN Framework Convention on Climate Change. Since 2004, China and India have
consulted regularly on climate change. The two sides set up a joint working group to
exchange views on major issues concerning global climate change, domestic policies
and measures relating to climate change, and related cooperative projects. China and
Brazil have established the Joint Action Plan 20102014 as well as the ChinaBrazil
Center for Climate Change and Energy Technology Innovation. The ve nations also
pledged cooperation to fight climate change through a series of joint resolutions at
the 16th BRICS Ministerial Meeting on Climate Change. China has also strengthened
its cooperation with the EU and the USA on climate change. In 2015, China worked
together with the USA and the EU, issuing the USChina Joint Announcement on
Climate Change and the EUChina Joint Statement on Climate Change.
Finally, the nancial and economic cooperation of the BRICS countries has served
as a new and innovative model for achieving SouthSouth cooperation.
The basic logic of such a model is common development or development amid
cooperation. The BRICS countries, based on their own development experiences, are
more willing to help other countries to develop using a mutually beneficial method
through adopting the strategy of teaching other countries to sh instead of giving them
a lot of sh to eat. Cooperation is reected not only by the support of the BRICS of
the UN Millennium Development Goal action plans, but also their efforts to enhance

5
See G20 Leaders Communiqu, Brisbane Summit, 1516 November 2014, available from: http://www.
g20australia.org/sites/default/les/g20_resources/library/brisbane_g20_leaders_summit_communique.pdf.

2016 Institute of World Economics and Politics, Chinese Academy of Social Sciences
 The BRICS and the G20 121

cooperation to support poverty-stricken countries. In joint declarations, the BRICS

leaders announced that they would provide support to poor countries in the form of
liquidity guarantees, debt reductions, improved market entry and increased technology
transfer. Each of the BRICS countries has also committed to expand the scale of foreign
aid for underdeveloped economies. For example, the China SouthSouth Climate
Cooperation Fund has announced that RMB20bn (US$3.1bn) will be made available
to help developing countries tackling climate change. China will also invest at least
US$12bn in least-developed countries by 2030, as Chinese leader Xi Jinping said in the
United Nations Sustainable Development Summit 2015.
In general, the BRICS countries have gradually become aware that they share
mutual interests in international affairs, and actively participate in international
multilateral cooperation and global governance. The States Participation index of
Global Governance (SPIGG),6 designed by the Political Science Institute at the East
China University of Political Science and Law in 2014 to evaluate the quality of each
of 25 states participation in global governance, shows that emerging countries have
become important participants in the process of global governance (Political Science
Institute at East China University of Political Science and Law, 2015a). In terms of
overall ranking, coinciding with the permanent membership of the United Nations
Security Council, the USA, the UK, France, China and Russia are the top 5, illustrating
that China and Russia play a relatively leading role in global governance. India ranks
7th, and in 2015 Brazil and South Africa had signicant increases in ranking from 2014
(see Table 3).

V. Main Challenges Facing the BRICS

Despite strong economic ties and common political goals, there are still major obstacles
to cooperation among the BRICS.

1. Economic Challenges
Since 2013, the structural problems of the BRICS economies have been significant,
including large income gaps, lack of financial transparency and infrastructure
deficiencies. Meanwhile, the external economic environment is not favorable for
the BRICS. The emerging market economies experienced a recent sharp slowdown.

6
SPIGG are the sum of the scores of four primary indicators: Creation of Global Regimes, Maintenance of
Global Regimes, Engagement to Global Decision-making and Commitment to Global Obligations.

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Table 3. States Participation Index of Global Governance, 2015 Ranking

Ranking changes
Rank Country Score
20142015
1 USA 1654.80 0
2 UK 1391.14 0
3 France 1328.53 1
4 China 1156.46 1
5 Russia 1137.30 2
6 Germany 960.82 0
7 India 922.96 0
8 Canada 831.34 8
9 Japan 825.90 0
10 Italy 713.47 2
11 Brazil 703.98 8
18 South Africa 514.13 3
Source: Data come from the website of the Political Science Institute at East China University of Political
Science and Law, available from: http://psi.ecupl.edu.cn/spigg/english/about.htm.

Divergent growth trends in the BRICS are obvious (IMF, 2015). In 2015, except for
India who had a relatively sound performance, Russias economy shrunk, Brazils
economic performance remained lackluster and Chinas economic growth continued
to slow down. The prospect of an improvement in 2016 is contingent upon sustained
growth both in developed and emerging market economies. Downside risks remain,
with significant uncertainty arising from the divergence of monetary policy stances
in developed economies, decelerating capital ows to emerging markets, signicant
slowdown of world trade and investment, and persistent geopolitical risks. The severe
economic challenges may have a negative impact on the BRICS. On the one hand,
in dealing with those challenges, each BRICS country may act in their own interests
and domestic affairs may take precedence over international cooperation; this could
negatively affect the cooperation of the BRICS. On the other hand, given the diversied
structures of the emerging-market economies (Chen and Zhang, 2010), the impact of
economic shocks on those countries may vary considerably. They may protect their
own interests rather than maintaining cooperation.

2. Weak Geo-political Links

The BRICS do not have close geo-economic links. Within the BRICS, Brazil is
located in South America; South Africa is in the southern part of Africa; although
China, Russia and India border each other, the far eastern part of Russia and Chinas
north-eastern and north-western regions are all less developed areas; China, India and
Russia are restrained by geographical conditions and face territorial disputes in some
border regions. These fundamental differences and rivalries have been reflected in

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 The BRICS and the G20 123

foreign policy stances and global politics and could, ultimately, derail future intended
undertakings of the BRICS group. If political and security affairs were included in the
core agenda of BRICS, the geo-graphical conict might affect the depth of economic
cooperation in BRICS.

3. Complicated Internal and External Relations

The BRICS have different political systems and economic structures, which is
particularly apparent in their diverse resource endowments and industrial advantages,
with Brazil specializing in agriculture, Russia in heavy and extractive industry, India
in services and China in manufacturing. Cooperation and competition coexist in the
relationships among the five countries. The BRICS lack consensus and common
interests when it comes to major economic issues, such as trade balance. Chinas
strong economic development coupled with its thirst for natural resources has led to
asymmetric relationships and substantial trade decits with the other BRICS countries.
Trade disputes have increased since 2001.
Cooperation within the BRICS may affect the political and economic interests
of other economies globally and regionally and bring challenges to the existing
international economic order when they start to play a more important role
globally in finance, trade, poverty reduction, infrastructure construction and
sustainable development. It can be predicted that the competition for dominance in
international rule-making and structure building will intensify in the future.
The most substantial and inuential product thus far of the BRICS cooperation has
been the establishment of the New Development Bank. However, it is indisputable that
its establishment is intended to inuence existing international nancial organizations
and structures and to compete with other institutions like the World Bank and the IMF.
Therefore, the bank should be careful to handle its relations with existing international
institutions appropriately.
Furthermore, some other emerging and developing economies may doubt whether
the cooperation of the BRICS can be advanced in a pragmatic manner. On the one hand,
they might hope to make use of the BRICS to promote their own interests, and, thus,
would want the BRICS to prosper through their coordination; on the other hand, they
question how they will benet from such a cooperation.

4. Inadequate Governance Capabilities of the BRICS

Currently, the history of BRICS participation in global economic governance is relatively

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124 Huifang Tian / 111126, Vol. 24, No. 4, 2016

short. In the National Governance Index (NGI),7 which was designed by the Political
Science Institute at the East China University of Political Science and Law to measure
the governance levels of 111 selected countries in the world, China ranks 19th, and is the
only developing country among the top 20. Russia, India and Brazil all rank below 50
(Political Science Institute at East China University of Political Science and Law, 2015b).
The BRICS countries need to improve their national governance capability, by focusing
on their infrastructure investment, environmental protection, political stability, openness,
technological innovation and other areas, such as control of corruption, government
efciency, management quality, education, food supply and justice.

VI. How Can BRICS Cooperation be Deepened Using G20 Platforms

and BRICS Cooperation Mechanism?

To cope with the abovementioned challenges, China can play a leading role by
encouraging closer cooperation among the BRICS. China is the host of the G20 in 2016
and from 1 January 2017 it will be Chinas turn to take on the presidency of the BRICS
cooperation mechanism. Therefore, China will have the opportunity in 2016 and 2017 to
further improve the cohesiveness and inuence of the BRICS through the G20 platform.
First, China can serve as a facilitator to advance the implementation of past policy
commitments, to shore up long-term growth through innovation and structural reform and
maintain financial stability in the emerging markets. China should make the most of its
leadership role and discuss the signicant risks facing the global economy, strengthen policy
coordination to prevent short-term and long-term nancial risks, and bolster emerging markets
resilience to shocks through addressing vulnerabilities within the framework of the G20. In
the short term, the macroeconomic policy mix should support aggregate demand and boost
investment, while maintaining nancial stability. In the medium to long run, the G20s structural
reforms need to be accelerated to reach its objective of strong, sustainable and balanced growth.
Second, China should continue to promote a stable and resilient international
nancial architecture (IFA). Under the Chinese G20 presidency, the IFA Working Group
has been restored to complete unfinished tasks and push the G20 further strengthen
the reform of the international monetary system. The BRICS have the opportunity to
advance discussion on certain topics, such as the IMFs quota and global governance
reform, sovereign debt restructuring and debt sustainability, capital ow management

7
The National Governance Index (NGI) is calculated using the sum scores of each countrys three primary
indicators: fundamental indicator, normative indicator and sustainability indicator. The 111 countries ranked in
the NGI cover the absolute majority of countries with global or regional inuence.

2016 Institute of World Economics and Politics, Chinese Academy of Social Sciences
 The BRICS and the G20 125

and the construction of a coherent global nancial safety net.

Third, the BRICS can jointly promote global trade growth through enhancing the
transparency of regional trade agreements, and ratifying and implementing the Trade Facilitation
Agreement. Meanwhile, the BRICS can encourage global infrastructure connectivity based on
current various national and regional plans, and reduce the nancing bottleneck of infrastructure
investment, so that the global economy can enjoy the full benets of infrastructure investment.
Fourth, the development agenda should become a guide to improve the cohesiveness and
inuence of the BRICS. The G20 summit in 2016 offers China an opportunity to advance
international development cooperation with three priorities: trying to fill the gap between
the global demand and supply of infrastructure nancing; ensuring that G20 members sign
the Paris Agreement and bring the Paris Agreement into force as soon as possible; and
advancing the 2030 agenda for sustainable development. To achieve the new millennium
development goals, China should focus on reaching consensus on the promotion of education
and the elimination of the nancial hurdles that restrict access to higher education, raising the
income of middle and low income people, and providing better jobs for these people.
Fifth, the BRICS should call for the cross-border and regional cooperation of
multilateral development banks (MDB) to collectively optimize their balance sheets to
achieve development effectiveness. Existing financial institutions, such as the World
Bank, have rich experience in how to improve the quality and efciency of the operation
of the NDB. The NDB should improve information and experience sharing and project
cooperation with other MDB. The NDB should also learn from the advanced experiences
accumulated through other international or regional nancial governance processes.
Last but not least, China can play an important role in policy coordination among
BRICS countries and with other G20 members. First, the macroeconomic policy
coordination of the BRICS countries needs to be enhanced, including fiscal policy,
monetary policy and nancial regulation policy, and the BRICS must take coordinated
measures when faced with future common challenges. Second, the coordination of
the BRICS in G20 needs to be improved, and they should endeavor to exert collective
influence on global governance. The BRICS can make use of internal exchanges,
knowledge sharing and peer studies to unify their stance and make the voice of the
BRICS louder, clearer and fully reected in the G20. Third, the BRICS can make use of
Chinas hosting of the G20 summit to strengthen the cooperation with major economies
and provide greater economic support for African and Latin American countries.

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(Edited by Zhinan Zhang)

2016 Institute of World Economics and Politics, Chinese Academy of Social Sciences