China’s global strategy becomes clear at BRICS.
Executive Summary:
- Xi Jinping envisions a China-led global order and shared that vision at last month’s
BRICS Summit. - China seeks a peaceful revolution against the established U.S. global order, and does
not seek military confrontation with the U.S. or its allies. - Cooperation from the “Global South” is key to China’s strategy and may represent its
center of gravity.
Chinese President Xi Jinping opened last month’s BRICS (Brazil, Russia, India, China, and South Africa) Summit with a question about where the world is headed: “Peace or war? Progress or regression? Openness or isolation? Cooperation or confrontation?” He spent the rest of his two speeches drawing lines between the Western order – unilateral sanctions, more confrontation, more war, and more isolation – and the emerging Chinese-led global order, which Xi says will offer peace, inclusiveness, and cooperation. Xi’s ability to usher in a Chinese world order depends on China’s ability to recruit members of the “Global South” into a new global monetary system. Xi turned a new page in this chapter of global history during the BRICS Summit.
Xi was very clear in warning the BRICS member nations that a U.S.-led world order will lead to more conflict as the U.S. pursues East-West bifurcation and bloc mentality reminiscent of the Cold War. China blames U.S. sanctions for the breakdown of the global food supply and the worsening food crisis, and Xi warned that conditions would worsen if the United States were to retain global dominance. “If such dangerous trends are allowed to continue, the world will witness even more turbulence and insecurity,” Xi said. He underscored warnings from Chinese officials who have repeatedly banged the drum that, after Ukraine, the next U.S.-led salvo will be in the Indo-Pacific. Xi’s message was also clear that falling under the banner of Chinese leadership is the only way to avoid the next war and a worsening global economic crisis.
Xi used the conference to paint a picture of what could be under Chinese global leadership, not only for BRICS but for “BRICS Plus” – the constellation of third world countries and emerging markets partially dependent on peace, trade, and global economic growth for its own rising prospects. For the first time, as Xi states, these additional countries were invited to attend the meeting among BRICS Foreign Ministers. This is a part of a strategy to expand BRICS to other emerging markets, and it’s paying dividends.
Chinese World Order
Earlier this month, Argentina gained China’s approval to join the BRICS economic alliance. According to unconfirmed reports in Russian media, Turkey, Saudi Arabia, and Egypt are interested in joining. In 2018, BRICS rejected Turkey’s application to join because the organization was not ready to expand. Four years later, BRICS may grow to encompass Middle Eastern powers, including Egypt which controls the Suez Canal. Combine China’s interest in Panama – including the Panama Canal – it’s easy to see where this is going: Chinese hegemony over global trade routes.
Chinese Foreign Minister Wang Yi outlined back in April how important these “Global South” countries – which include Latin America – are to a Chinese world order.
“In the race of [Chinese] global governance, we look forward to seeing EMDCs [emerging markets and developing countries] turning from ‘followers’ to ‘forerunners’ and even ‘pacesetters’. Together, we can play a more active role, speak with a bigger voice, help make the international order more just and equitable, and promote more open, inclusive, balanced and win-win globalization for all,” Wang said.
This is important not only because so-called EMDCs make up a majority of the world’s population, but also these emerging markets are countries that could begin using the Chinese yuan or a commodity-backed BRICS basket currency as a standard of trade and reserve currency. China doesn’t have the capital and credit markets required to replace the U.S. Dollar globally, but they don’t need to if China can displace the dollar in these EMDCs. China’s Belt and Road, the digital yuan, and other economic and monetary initiatives are key facilitators in this process.
…he can displace the use of the USD in roughly 40% of the world.
An alternative part of this plan includes cooperation with Russia to build a commodity-backed BRICS basket currency. It’s unclear how China will gain the cooperation of India, which is developing its own international settlement system to accept the rupee for increased agricultural exports, or for Brazil which at least for now has a pro-U.S. establishment. (China is Brazil’s largest customer, by the way.) But we continue to hear the rumblings of this BRICS currency, which plays an important role in China’s global revolution against the United States. A monetary and economic alliance also paves the way for a military alliance to rival “Global NATO”.
Back in May, Xi made mention of this new Chinese-led global order coming together under the banner of a “Global Security Initiative” (GSI), which he again invoked during the conference. “It is important that BRICS countries support each other on issues concerning core interests, practice true multilateralism, safeguard justice, fairness and solidarity and reject hegemony, bullying and division… China would like to work with BRICS partners to operationalize the GSI and bring more stability and positive energy to the world,” Xi explained. That stability, Xi might say, can only come in producing a counterweight to U.S. military might.
The center of gravity for the United States includes its military strength, which for now remains the strongest in the world, and the USD as the global reserve. If Xi is successful in building a new monetary order among BRICS countries, he can displace the use of the USD in roughly 40% of the world. By some estimates, a new BRICS currency could make up a third of global reserves, making it the second largest behind the USD.
The center of gravity for China’s plan includes its own domestic political and economic stability, which Xi likely hopes to smooth over by the end of this year, and cooperation from Brazil, India, and the Global South. This the next front in the diplomatic war between the United States and China, which is already being waged. The Solomon Islands just showed exactly how this works. In May, the Solomons agreed to what Chinese officials described as a “mutual defense pact” with China. Solomons officials were adamant that the deal didn’t include plans for a Chinese naval base, however, they were open to closer military relations with China, as well as domestic security support.
The prospect of the Solomons coming under the orbit of China caused grave concern for Australia, New Zealand, and the United States. The Biden administration, in particular, quickly sortied out State Department officials to the Solomons, and this week announced increased aid to the Pacific Island Forum to prevent other countries from following suit. Following the likely Western carrot and stick back channel diplomacy, the Solomon Islands spun 180-degrees and now say that their China deal was overblown, that the West was reading too much into it, and that Australia remains their “security partner of choice.” It’s truly funny how that works.
Despite China’s short-lived diplomatic victory over the Solomon Islands, their Global South strategy will continue. Based on repeated speeches and statements made by Chinese officials, BRICS countries represent the core of the GSI and Xi likely believes their rising diplomatic and economic power will be enough to peacefully counter and overthrow the U.S. global order. Whether the U.S. order goes peacefully is another matter, but Xi sees the alliance between BRICS and the Global South as key to achieving this global revolution – not militarily, but economically, monetarily, and diplomatically.
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