China-led fightback against Trump’s tariff tantrums likely at Brics meeting in SA
SA is likely to provide a platform for a China-led fightback against Donald Trump’s protectionist agenda, as it hosts counterparts of the Brics group of nations.
The annual summit of the coterie of emerging economic powers first identified by former Goldman Sachs Asset Management chairman Jim O’Neill is the 10th since its leaders started meeting, and the first since the prospect of a full-blown global trade war became a real threat. The Brics group encompasses Brazil, Russia, India, China and SA.
Chinese President Xi Jinping has already used his visit to the country to forge friendships and consolidate influence with multibillion dollar investments in Africa, including SA, which counts China as its biggest trading partner. Xi’s country has the most at stake in a potential trade conflict, accounting for the bulk of the combined GDP of about $17-trillion that Brics represents.
"I expect to see a bold, sweeping statement led by the Chinese side that will condemn protectionism and de-globalisation with an intent to keep the global trading regime intact and predictable," Martyn Davies, MD for emerging markets and Africa at Deloitte, said by phone. "Access to the global economy through trade has underpinned China’s economic success over the past two-and-a-half decades."
As Donald Trump's tariff salvos threaten global trade wars, leaders from the BRICS bloc - Brazil, Russia, India, China and South Africa - are expected to band together in defence of the multilateralism the United States once championed at a summit of major emerging nations in Johannesburg. Subscribe to TimesLIVE here: https://www.youtube.com/user/TimesLive
O’Neill coined the Bric term in 2001 to describe the four emerging powers he estimated would equal the US in joint economic output by 2020. Brazil, Russia, India and China invited SA to join the group in December 2010. The five countries’ GDP is now more than 90% the size of US output. While they have combined foreign-exchange reserves of $4-trillion, the group’s currencies, stocks and bonds took a hit from the trade war and the US Federal Reserve’s policy tightening.
Xi’s counterparts from Russia, Brazil and India will join him at the summit, as will Turkish President Recep Tayyip Erdogan and African leaders such as Angola’s João Lourenço and Zambia’s Edgar Lungu.
"China is the most important trade country in this coalition and is likely to offset the negative impact from greater US protectionism through increased domestic stimulus," Madhur Jha, head of thematic research at Standard Chartered Bank, said in response to e-mailed questions. The Brics nations would "reiterate their own domestic agendas at this meeting as well as commit to more trade and investment among these countries", she said.
With Colleen Goko