The following article is sourced from Yang Feng, the author of Yang Feng Studio
The rise of the BRICS power will lead to changes in the global geopolitical landscape, and the global power structure will also be restructured as a result.
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The United States issues orders through G7
After Biden took office in January 2021, he changed Trump’s China policy to unite with allies to deal with China.
In February, Biden attended two consecutive international summits, the Munich Security Conference and the G7 Conference. At the Munich Conference, Biden high-profile revealed: “The United States has returned.
Since then, the United States has repeatedly used the platform of the G7 summit to challenge China and Russia. And use this as a leverage to drive the EU and other allies to encircle China and Russia. Including political, economic, and military containment.
It is not difficult to see that the G7 is a group that implements the will of the United States. Whenever the United States has any new ideas or measures, they will be mentioned at the G7 meeting, then handed over to the European Union for voice, and then implemented by other allies.
For example, during the Russo-Ukrainian War in 2022, due to the high international oil prices, the United States proposed a price limit order on Russian oil exports at the G7 meeting.
The G7 Group has become a global geopolitical leader.
Faced with this model of the United States, China and Russia appear lonely. Even though China and Russia have strong national strength, they often can only respond to the Group of Seven, which puts China and Russia in a disadvantageous position in international politics and is not conducive to fighting for the right to speak.
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BRICS as a lever to leverage the Group of Seven
However, this situation has changed in 2022. The most important event in the world in 2022 is the Russo-Ukrainian War. At that time, the United States strongly urged global countries to condemn Russia and impose sanctions on it.
But only over 40 countries have imposed sanctions on Russia. Among the BRICS countries, except for Russia, China, Brazil, India, and South Africa all hold a neutral stance and do not impose sanctions on Russia.
Moreover, the BRICS countries also implemented an expansion plan last year. According to information, 19 countries have applied to join the BRICS, including Mexico, Indonesia, Thailand, Iran, Argentina, Nigeria, Bangladesh, Egypt, Algeria, Türkiye and Venezuela. Distributed on all continents.
Therefore, some people say that there are many countries that want to join the BRICS, and everyone is waiting in line. The BRICS organization has become a lever to leverage the Group of Seven.
Can the BRICS Group confront the G7?
Our view is that it cannot be done now, but it can be done in the future, that is, the expanded BRICS organization can. Let’s take into account the expanded BRICS or the 19 countries that are willing to cooperate with the BRICS five countries and are interested in joining them, and call them BRICS+.
In fact, China proposed the concept of BRICS+in 2017. Targeting emerging market countries and developing countries.
On the other hand, since joining the BRICS organization requires a certain threshold, one cannot simply join if they want to. With the BRICS+architecture, some countries can immediately cooperate with the BRICS countries. The BRICS countries have already engaged in dialogue and cooperation with countries in the Middle East, Central Asia, and Latin America.
In 2013, the BRICS China Development Bank was established, commonly known as the BRICS Bank. So far, the BRICS Bank has absorbed four new members: Egypt, Bangladesh, the United Arab Emirates, and Uruguay. The BRICS Bank has expanded its membership ahead of the BRICS countries. At present, Greece from EU countries has also shown interest in joining BRICS banks.
As a result, BRICS+has become a new international platform. Although there is population and market support from the European Union behind the G7 group, the population and potential markets of BRICS+countries are much larger than those of G7 and the European Union (Western countries).
From a different perspective, in the past decade, except for the United States, the economic growth of other countries in the G7 Group has fallen into low growth or stagnation, and the same is true for EU countries. The economic growth of BRICS+countries is higher than that of G7. The proportion of G7 Group in the global economy continues to decrease, while the proportion of BRICS+in the global economy is increasing, which is the opposite.
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Structure of Golden Brick+
Let’s take a look at the geographical distribution of the BRICS countries globally. There are Russia, China, and India on the Asian continent. These three countries extend from the Arctic region to the north, to the Indian Ocean, and run through the entire Asian continent. The three countries of China, Russia, and India alone have great momentum and potential.
The total area of these three countries is nearly 30 million square kilometers, with a total population of 2.95 billion. This is a super large group. On a global scale, from any perspective, it can be called a ‘big’ word.
Brazil is the largest country in South America, with a GDP of 1.9 trillion US dollars, ranking 11th globally. It covers an area of 8.15 million square kilometers and has a population of 210 million. There are abundant resources such as iron ore and oil, as well as agriculture, with a certain industrial foundation. Embraer is the fourth largest civil aircraft manufacturer in the world.
South Africa is a major southern African country. The economic aggregate ranks second in Africa. The population is nearly 60 million. If Egypt, located in North Africa, smoothly joins the BRICS, then the major powers on both sides of Africa will be members of the BRICS.
At present, the GDP of the BRICS countries is indeed inferior to that of the Group of Seven. However, among the top 11 global GDP countries, except for the G7 countries, the remaining 4 are all BRICS countries. It can be said that this world is two major groups. The potential of BRICS expansion or multi country cooperation will be sufficient to compete with G7.
In addition, almost all countries that want to join the BRICS are members of the G20. It is also a country with the largest economy in the world. From this perspective, the economic potential and international influence of BRICS+will effectively catch up with the G7 Group.
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Control over half of global oil production
The power of BRICS+is thriving. In addition to its economic growth potential higher than that of the G7, there are other levels of strength and advantages.
Firstly, it is in the fields of energy such as oil, natural gas, and coal mines.
Saudi Arabia wants to join the BRICS. Saudi Arabia is the leader of the Organization of Petroleum Exporting Countries (OPEC). Saudi Arabia, Iran, the United Arab Emirates, Algeria, Nigeria, Libya, and Venezuela in OPEC all want to join the BRICS.
In this way, more than half of the OPEC countries want to join the BRICS, coupled with oil exporting countries such as Russia and Bahrain, which is equivalent to the BRICS+controlling half of the global oil production discourse.
These oil producing countries, as well as OPEC+OPEC, will have more confidence under the BRICS, regardless of what the United States says. Iran and Venezuela, which have long been sanctioned by the United States. It will also rely on the BRICS organization. Slowly expanding its oil production.
Once the BRICS+cooperation becomes closer, the United States will no longer be able to give orders to the Organization of Petroleum Exporting Countries. This will seriously impact the foundation of the petrodollar. The status of the petrodollar is precarious. The global geopolitical landscape will also undergo significant changes.
This is in terms of energy.
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Expansion of local currency trade settlement
On the second level, these countries that want to join the BRICS are willing to settle their own currency trade. Moreover, many countries have already conducted local currency trade settlements.
After the expansion of the BRICS membership, local currency trade settlement will be promoted on a larger scale. This will weaken the circulation status of the US dollar and weaken the proportion of US dollar reserves in the world.
This means that the circulation and reserves of the RMB around the world will increase. Because in the BRICS organization. China is the country with the largest economic volume, with complete industry and strong productivity. After a long time, the advantages of the RMB will become apparent, allowing more BRICS+countries to adopt RMB trading and increase RMB reserves. This is the result of natural competition and elimination.
This is in terms of finance and currency.
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Stabilizing the global economic and trade order
On the third level, expanding BRICS membership will stabilize the global economic and trade order. And in terms of discourse power in the global supply chain, it competes with the Group of Seven led by the United States.
Isn’t the United States constantly demanding that its allies decouple from the Chinese economy? However, so far, many American allies have maintained economic cooperation with China. BRICS+countries are strengthening their economic and trade exchanges with China.
Strengthening economic cooperation among BRICS+countries is a major trend that is about to change the global economic landscape.
The United States needs to change the global supply chain and engage in friendly and nearshore outsourcing. We will also establish the Indo Pacific Economic Framework (IPEF) to decouple from the Chinese economy.
However, global economic and trade cooperation is a trend that cannot be changed by the United States, nor can it be changed. In March 2018, the United States launched a trade war against China. In August 2019, Trump publicly requested for the first time that American companies in China leave China, which was the beginning of the economic decoupling between China and the United States. Since then, the United States has been actively planning to decouple from the Chinese economy.
But over the years, apart from being forced by the United States to disable Huawei’s communication equipment and comply with US requirements to restrict Chinese chips, which country has truly decoupled from the Chinese economy?
The United States actively decouples from the Chinese economy, while also forcing its allies to decouple from the Chinese economy. However, BRICS+countries and other countries have strengthened their economic and trade exchanges with China.
This means that the global economic order will be divided into two systems, two leadership levels. One is G7, and the other is BRICS+. At this point, we need to compete. Let’s think about it, does G7 Group compete better than BRICS+?
This is at the economic level.
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Global power enters a binary system
From the perspectives of energy, financial currency, and economy, BRICS+has strong potential to operate outside the G7. This was unimaginable when the United States launched a trade war and decoupled from the Chinese economy.
Will the United States regret it? That requires asking Trump and Biden, who initially called out “America first”, launched a trade war, imposed tariffs, and also built their own supply chains to restructure the global supply chain. The foreign measures taken by the United States over the past five years have made some countries uneasy, and due to China’s rise, many countries have had a second choice. As a result, a global second system was born.
Moreover, the influence of BRICS+will extend to the international political level, and the global power map will be reorganized. More precisely, with the rise of BRICS+power, global power will no longer be dominated by the G7 led by the United States, but rather by a binary system of power sharing.
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conclusion
In 2022, when the Russo-Ukrainian War broke out, the United States led more than 40 countries and allies to impose sanctions on Russia. But more countries choose not to participate in sanctions against Russia. The signal has already appeared.
Washington took some drastic measures during the Russo-Ukrainian War, such as freezing Russia’s foreign exchange reserves and personal assets; Attempting to force oil producing countries to increase their oil production, disregarding the interests of the oil producing countries; The bombing of the Nord Stream, etc., has alerted many countries around the world to fear that the United States is overusing the dollar as a weapon, thus accelerating its dependence on the dollar.
In 2018, the United States fought a trade war with other countries to counter globalization and break the supply chain system that had been around the world for many years.
The Federal Reserve’s repeated quantitative easing, as well as the US dollar tide of interest rate hikes over decades, have led many countries to seek their own financial security.
Faced with many problems, the G7 Group led by the United States did not focus on solving them, but instead resorted more to financial sanctions and confrontation with the economy. At this time, many countries began to search for answers beyond the United States and the West.
So, BRICS+emerged. Within this system, everyone seeks cooperation and development. That is to say, more and more countries will be interested in and cooperate with BRICS+.
This means that the previous unipolar world will change. The global order will enter a binary system and then transition to a multipolar world pattern.
From June 1st to 2nd, the BRICS countries held a ministerial meeting in Cape Town, South Africa. South African Foreign Minister Pandor stated after the meeting that the BRICS Bank is studying the use of a common currency that can replace the US dollar for international trade to avoid sanctions.
In August, the BRICS countries will hold a leaders’ summit. The United States wants to restructure the global supply chain, but it has led to a restructuring of the global power landscape.