BRICS currently accounts for 45 percent of the world’s population and 35 percent of world’s economy in terms of purchasing power.
The BRICS group recently held its first summit since the group’s expansion, in Kazan, Russia, the rotating chair country.
Through the group, China and Russia are seeking to establish an alternative international payment platform that is not subject to Western sanctions—a tactic that experts say unlikely to work.
BRICS was established by Russia, China, and India, and was later joined by Brazil, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates. Saudi Arabia has been invited to join the group but has not formally become a member.
Russia has been using China’s CIPS (Chinese Yuan RMB-based cross-border payment system) for limited international trade, since it was banned from the U.S. dollar-based SWIFT platform after it invaded Ukraine in 2022.
Wang Guo-chen, an assistant researcher at the Chung-Hua Institution for Economic Research in Taiwan, said the chances are slim that China and Russia can truly change the international financial system.
According to statistics from the People’s Bank of China, CIPS processed an average of 30,000 transactions per day in 2023, involving 482.6 billion yuan ($67.8 billion).
Wang said that compared to the U.S. dollar-based SWIFT, which handles 42 million transactions per day that are worth $5 trillion, “how can China’s CIPS replace SWIFT with such a huge gap?”
“If a country can’t join SWIFT, it means it’s kicked out of the global financial exchange. So, it’s basically impossible for Beijing to change the global financial system,” Wang told The Epoch Times.
Taiwan macro economist Henry Wu told the Epoch Times that the economies of the core three countries in the BRICS—China, Russia, and Iran—will continue to be compressed.
“Because the global political situation is the confrontation between the United States and China, and the basic strategy of the United States is to cut off the Chinese Communist Party’s (CCP) financial support and gradually eliminate its economic momentum. In this way, the CCP will eventually be unable to sustain itself because of internal economic problems and regime crisis, let alone aiding other regimes.”
Wu said the CCP’s international influence is based on its huge investment in other countries, “but now the CCP has no money. Its U.S. dollar assets have been emptied by the domestic corrupt officials. They exchanged the embezzled money in RMB for U.S. dollars and then transferred them abroad. In addition, the CCP’s extreme lockdown during COVID-19 has caused huge economic loss which hasn’t been recovered.”
Wang said: “If it weren’t for the financial sanctions from Europe and the United States, Russia would not want to use the RMB for transactions. Putin also wants to internationalize Ruble through the BRICS. In other words, both the CCP and Russia want to control the BRICS countries.”
Wang said that the BRICS countries all have their own calculations. “But these countries actually all have political and economic problems, whether it is Russia, Iran, or China. So they have consumption capacity issues. Every BRICS country wants to export, not import. But who has the world’s largest final consumer market like the United States? It seems that none of them have it.”
Former Goldman Sachs chief economist Jim O’Neill, who introduced the term BRIC in 2001, said, “The idea that the BRICS can be some genuine global economic club, it’s obviously a bit out there with the fairies in the same way that the G7 can be, and it’s very disturbing that they see themselves as some kind of alternative global thing, because it’s obviously not feasible.”
BRICS currently accounts for 45 percent of the world’s population and 35 percent of world’s economy in terms of purchasing power. China accounts for more than half of the group’s total economy.China’s leader Xi Jinping attended the summit and met with Russian President Vladimir Putin in Kazan on Oct. 22; the third time the two have met this year.
Putin told Xi: ”Russian–Chinese cooperation in world affairs is one of the main stabilizing factors on the world stage.”
Xi said that “the international situation is intertwined with chaos,” and “I firmly believe that the friendship between China and Russia will continue for generations, and great countries’ responsibility to their people will not change.”
Zheng Qinmo, associate professor of the Department of Diplomacy and International Relations at Tamkang University in Taiwan, said there is no real friendship between China and Russia.
“Although they say so, their cooperation is mainly aimed at challenging the current international order led by the United States and is only temporary cooperation,” he told The Epoch Times.
“There are many conflicts between China and Russia,” Zheng said. “Xi Jinping promised to continue to support Russia in the Russo-Ukrainian war, but he was also afraid of the deterioration of relations with the West, especially as the CCP is now facing a serious downturn in its economy.”
In the field of global finance, Zheng pointed out: “Russia, under Western sanctions, is more eager to establish a different cross-border payment system, but the CCP has concerns. It hopes to build an international order dominated by the CCP, based on the support of the global south countries, to compete with the United States.”
Russia has been under international sanctions since its invasion of Ukraine in 2022, while China remains Russia’s main supporter of its ongoing war in Ukraine. Meanwhile, China is under the increasing pressure from the international community led by the United States for its continuous threat to the sovereignty of Taiwan and unfair practices in global trade.
Luo Ya, Pei Zhen, and Reuters contributed to this report.