The success that China has had in recent decades in relation to its strategic development makes this state an example for other emerging countries (XINHUA, 2014). While in the last century having its demands neglected and watching the prevalence of the current trend towards concentration of power only in the “North”, China has started to develop a series of measures that could increase its voice and influence at the international level in order to compose an order that reflects best the cyclical changes currently happening in the system (MIT, 2009, p. 4). Engaging in BRICS can be seen as one of those movements. Based on this, this article aims to analyze China’s interests in the proposed creation of a BRICS’ development bank.
Given the new international system that was forming along the 1990s, the Chinese leaders believed that the country had a better ability to win inside it. Thus, it was formulated the policy of peaceful rise on which it was established goals for energy self sufficiency, social stability and steady economic growth (Qingsi, 2006, pp. 141-158). Achieving these goals would lead China to a position of great power through peaceful means. The financial institutions of the country, when equilibrated the political interests of the government with a lucrative commercial orientation, proved to be a critical tool for enhancing Chinese global integration.
In synchrony with its political goals, China sought to create strong financial institutions that could assist the process of promoting its development and also to realize the strategies stated in the plan of peaceful rise while mitigating its challenges (ELLIOT; YAN, 2013, p. 1). In 1994, it occurred the establishment of three Chinese policy banks, the China Development Bank – the largest financial institution in the country with focusing on infrastructure –, Exim Bank of China – with priority in fostering the import and export of Chinese electronic products and promoting international economic cooperation – and the Agricultural Development Bank of China – specifically geared towards promoting agricultural development and fundraising for this area. These three banks are state-owned and, as pointed by Freeman (2013), are strongly influenced by the Chinese Communist Party (CCP), which provides guidance on sector targets and preferred countries for investment allocation.
Based on the data mentioned above, one can understand the role of the current largest development bank in the world, the China Development Bank (the leading developer of infrastructure projects in the country, providing, for example, resources to the construction of the major roads, bridges and highways) (SCMP, 2013). The balance between the support of governmental macroeconomic policy and a commercial orientation towards profits and increased competitiveness, ensured a success in quantitative terms in the Chinese attempt of international insertion and promoted a relatively stable economic growth. The harmony between economic and diplomatic strategies have made the search for internal stability and external ambitions compatible, making the policy of peaceful rise, currently peaceful development (XINHUA, 2011), stronger. This way it was set up the basis for China’s emergence as a great power in a harmonious way, away from military paths.
Nevertheless, the strength gained by China has not been translated into expansion of its decision-making powers in major international institutions – especially in the economic area such as the World Bank and IMF. Thus, the country began to engage in initiatives that could help it cope with this problem, such as the BRICS. The member countries of the grouping, in general, are opposed to aspects of the liberal American logic to govern the economy, especially in the current context of successive international financial crisis, which contributed to a further neglect of the interests of developing countries (HOU, 2013). In this context of dissatisfaction, the peculiarity of Chinese foreign policy joins the logic of soft balancing (PAPE, 2005, p. 17) – which aims to balance the great powers in a non-belligerent way – and makes it possible to understand the Chinese support of BRICS bank as a strategy that has only benefits.
Although acting together in creating this Bank, there are still questions regarding the operation of it due to the asymmetry between the BRICS’ economies, whose prevalence is undoubtedly Chinese. Debates also on where the Bank would be located, who will preside it, how much would be each contribution, the decision-making process, and even the development model to be adopted.
In this article we have indicated attitudes that signal a great willingness on the part of China to make the BRICS Bank a reality. The approval of the project taking into account its internal situation would be relatively easy, especially because of the lack of engagement of the population in political issues and a one-party organizational model. Sustained by their economic superiority, China would have the opportunity to make use of the bank to improve its international image, gain experience about how to command a multilateral financial institution, and internationalize its currency. To do so would require that the People’s Republic assume a leadership position. This possibility opens up space for inquiry about what would be the attitude of the other members against the Chinese dominance. It is questionable whether the other BRICS oppose this scenario or would permit it pending on the expansion of capital injection in the bank – assuming large financial contributions made by China.
The Chinese way to promote investment arouses attention of Western countries who fear that the pattern of Chinese behavior implies a loss of legitimacy of established standards within the Development Assistance Committee of the Organization for Economic Cooperation and Development (OECD/DAC) (BRÄUTIGAM, 2011, p. 2). The possibility of a transposition of the values preached in Chinese unilateral action for the scope of the BRICS bank accentuates the concern about the issue, leaving open what would the reaction of the great power be, as the project is presented with a rhetoric of complementarity but could pose a threat to existing international norms and institutions.
Despite the appointed empasses and controversies, it is clear that a BRICS bank – led by China or not – is constituted as a tool that can contribute to strengthening the policy of China’s rise as well as a reduction of the gap of power between the country and western powers – in view of the series of economic, diplomatic, and political benefits it can provide. Thus, we can say that the hypothesis that China supports the establishment of the BRICS Development Bank to strengthen its strategy of counterbalancing against the countries of the North is confirmed.
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Antonio Luis Mendes Chagas é graduando em Relações Internacionais pela Pontifícia Universidade Católica do Rio de Janeiro – PUC-Rio e membro do Programa de Educação Tutorial “Brasil Global” na mesma instituição. (email@example.com)
Maiara Folly Gomes é graduanda em Relações Internacionais pela Pontifícia Universidade Católica do Rio de Janeiro – PUC-Rio e membro do Programa de Educação Tutorial “Brasil Global” na mesma instituição. ()