BRICS in the Great Wall
Probably, the most thought-provoking question is why BRICS is of
so much interest to China, which traditionally abstained from
making unions or joining alliances that could have limited its
activities in the world arena. It seems that Beijing’s commitment
to BRICS can be seen through the prism of US-Chinese global
rivalry. From the Chinese perspective, the main role BRICS has yet
to play is to help China force out the US dollar as the main and
single world currency and challenge American dominance in the
existing world economic order.
Paradoxically enough, the “Chinese economic miracle” was
largely created by the Americans themselves with the help of the US
dollar. At the time of the cold war, after a long period of trade
and economic blockade against “Red China” the two countries
established diplomatic relations in 1972 and resumed bilateral
trade. Four years after that the “dollarization” of China
became a real possibility.
At one point, the Chinese appeared to be so articulate in
playing the game by American rules that they started outdoing the
Americans. Relatively inexpensive Chinese goods of fair quality
flooded shops from the East to the West coast. The U.S. trade
deficit with China in 2011 exceeded $300 billion, with the trade
turnover hovering slightly over $500 billion.
Beijing also bought heavily into US debt, holding bonds worth
some $1.2 trillion, which is unlikely to ever be exchanged for real
money or goods. Nevertheless, the U.S. authorities are working hard
to reverse the Chinese trade offensive, mainly by demanding that
Beijing raise the exchange rate of its currency, the yuan, to the
US dollar, thus encouraging American exports and making Chinese
goods less competitive.
China has raised the value of its currency slowly. But
Washington has demanded that Beijing take “a big leap” and raise
the yuan by 20-50%. The Chinese leadership will not do that of
Being unable to force Beijing to change the rules of trade, the
United States resorted to “heavy weapons”. In response to
China’s stubbornness, America came up with the Pivot to Asia
strategy proclaimed by US Secretary of State Hillary Clinton in
November 2011.The strategy calls for greater concentration in the
Asia Pacific Region and containment of China. As part of the Pivot
to Asia, the United States is creating an increasingly tangible
threat along the routes used for trade and transportation of raw
materials from Africa and the Middle East to China.
In August of last year, Hillary Clinton toured Africa, during
which she criticised growing trade between China and African
countries ($166 billion in 2011) and proposed to offer Africans
loans and military assistance as an alternative. In addition to
that, growing Western pressure on Iran has already resulted in
reduced supplies of oil so badly needed by China. The notable
warming of relations between the United States and India in recent
years is largely attributed to Washington’s desire to sour the
rapidly growing Indian-Chinese commercial ties ($70 billion in
2011) and New Delhi’s political contacts with Moscow and Beijing
Under such circumstance Beijing understands that while
full-fledged war with America is practically impossible, a new type
of confrontation is almost inevitable. The future strategic
competition between China and America can be defined as a “cloud
war” as its form can change and its boundaries are hard to
Chinese analysts believe that world finances are one of the
forms of a limitless “cloud war”. On the one hand, the
dominance of the US dollar gives tremendous advantages to the
United States and allows Washington to meet the cost of global
dominance with the help of military and economic levers and support
the “American way of life”. On the other hand, the US dollar
is passing through hard times. One bad vote in US Congress would be
enough to cause a collapse of the US currency that serves as the
foundation for the global financial system.
However, a blow may come from the outside. If the world’s
leading emerging economies abandon the dollar this could undermine
Pax Americana. Chinese strategists are mulling over the use of such
“cloud weapons” if America resorts to military and economic
measures as part of the Pivot to Asia.
The Chinese also think it would be too dangerous for them to
stand up to the United States alone. Beijing believes risks can be
shared by engaging other rapidly growing economies, which are wary
of the United States, in the global anti-dollar drive. These are
China’s BRICS partners: Russia, India, Brazil, and South Africa.
The great distances between them are not a hindrance to joint
action on the world financial front.
Spelling out its new concept of “peaceful rise”, which will make China a truly independent global centre of development, Beijing regards its BRICS partners as reliable allies in the struggle against the dominance of the US dollar as this serves the interests of all its members.
This is how BRICS will provide the bricks for the China’s new
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.