Paul Rathbone in London
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reason to be pleased with herself this week.Not only did she host on Monday a successful
meeting of the leaders of the Brics – the five large developing
countries that also include Russia, India, China and South Africa and account
for a quarter of the world’s gross domestic product. But her diplomats had also
overcome a late disagreement between India and China over who should host the
headquarters of the group’s $100bn Brics development bank, with Shanghai winning the
eat financial centre,” Ms Rousseff told
journalists afterwards, seeking to explain the choice of the Chinese city. Her
finance minister Guido Mantega added: “It is close to the great Asian powers.”
India will provide the bank’s first president
as consolation for not getting its headquarters. But although the Brics have
sought to paint the new institution as an equal partnership, the selection of
Shanghai speaks to a stark truth about the central role of China in the
Each of the other Brics is most strongly
connected to the group through its relationship with China, which in turn sees
them as new sources of energy and minerals, as markets for its products and as
like-minded partners on some international trade and strategic issues.
“Without a shadow of a doubt the principal
country from an economic standpoint is China,” said Roberto Dumas Damas, an
economist at Insper business school in São Paulo.
Among the Brics, the most important
relationship is between China and Brazil, the grouping’s second-biggest economy.
This is shown by Chinese president Xi Jinping’s extensive visit to Brazil.
Following on from the Brics summit, he will attend a meeting of the Brics
leaders in Brasília with Latin American heads of state on Wednesday and then
start a state visit to Brazil on Thursday.
China’s commercial relationship with Brazil
and indeed, the rest of Latin America, is symbiotic, analysts say. Brazil and
the region have grown from being providers of iron ore and other minerals,
soybeans and agricultural produce to also being consumers of Chinese
manufactured goods and destinations for investment from Beijing, particularly
in oil and infrastructure.
Emerging markets: News and comment from more
than 40 emerging economies
“The Chinese need natural resources and
Brazil has them,” said Insper’s Mr Damas.
Brazil also offers Beijing a solid base in
Latin America from which it can broaden its drive for influence. After Brazil,
Mr Xi will launch his second trip through the region since becoming president.
Last year, he visited Costa Rica and Mexico. This year he will visit states
where China has energy interests, notably Venezuela and Argentina, as well as
Cuba. Venezuela, already a major borrower from China, is seeking a fresh $4bn
In Argentina, meanwhile, China’s offshore oil
company Cnooc has a 50 per cent stake in local energy player Bridas, which
Argentina would like to see commit to its gigantic shale formation, Vaca
nations, India sees China as an ally to pressure the west on trade talks and
multilateral forums as well as an important commercial partner. Russia and
South Africa, like Brazil, sell natural resources to China. Russia also sees
China and the rest of the Brics as a buffer against western pressure especially
over its alleged
role in the Ukraine conflict.
Brics, it makes sense for Brazil and the other partners to support having the
new bank’s headquarters in Shanghai, said Marcos Troyjo of the BRICLab forum at
Columbia University. The bank will serve as an important diplomatic hub.
“It is very difficult on a bilateral basis to
have close encounters, let’s say, with decision makers in China,” said Mr
Troyjo. “But if you have a permanent body that deals with development [and]
economic issues, you can simply access your delegate in Shanghai.”
For the Brics’ democratic leaders, however,
and Brazil in particular, the danger is that they will be seen as swapping one
set of hegemonic powers – the US and Europe, which control the World Bank and
the International Monetary Fund – for another, China.
Ms Rousseff will need to “get something” out
of China during their bilateral talks this week, analysts say – whether it is
greater market access for Brazilian beef or for the country’s aircraft maker,
The Brazilian president seemed alert to the
concern when quizzed about it by journalists this week. “I don’t believe the
format of the new Brics bank will promote a new hegemony,” she said, dismissing
suggestions it would simply be recreating the Bretton Woods institutions but
this time with China at the helm.
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Brasília and John Paul Rathbone in London jointly has raised a few very
important points in 'China’s shadow hovers over $100bn Brics bank China’s
shadow hovers over $100bn'.
The meeting is obviously had been
convened to erect a counter Financial Institution to International Monetary
Fund (IMF) and a wide Publicity. Though it may overtly seem to be simple but
this very project would have multidimensional impacts, Financially,
Economically, Commercially and Politically. This might as well divide the world
into two Permanently, After diplomatic covert activities and fresh polarization
in two front.
The above mentioned main subjects
needs thorough and detailed analytical expansions and explanations to
comprehensively derive the salient points on short and longtime impact on the
world's Financial, Economical. Commercial and Political arena.
The article reveals China in
particular has already entered the South America with a longtime above
mentioned all agenda that to below mainland of US. This very point give rise to
defense issues to be cover up by detailed study by Defense Strategists with
analytical detail analysis report.
About the relationship of India and
China it can be said that India wouldn't not soar its relationship with China
however one may want it to, because of obvious reason is to keep safe from
China on its top and fear. Over and above China's solid position with all other
BRIC members including Russia.
I suppose the mentioned point above
and may be many more in the article would keep the relevant analysts to work
for weeks to produce detail thorough analytical reports to the relevant
departments and to World community of nations for information.