The New Game Plan after the “Great Expansion” of BRICS: China Unveils 5 “Ace Cards” to Drive Joint Economic Growth
Hello everyone, I’m your financial observer.
On September 13th, a significant event that could profoundly impact the global landscape took place during the 18th BRICS Summit in New Delhi. With the addition of countries such as India, Brazil, Saudi Arabia, Egypt, the United Arab Emirates, Iran, and Ethiopia, the BRICS group has evolved from a “five-nation club” into a “large BRICS family” comprising 11 members.
At this critical juncture, the Chinese president proposed five specific initiatives, which can be summarized in one sentence: Let’s stop talking about concepts and get to work. Let’s expand the economic pie together, share technologies, and open up markets.
These are not just diplomatic rhetoric; they represent a detailed “economic strategy map.” Below, I will break down the logic and benefits behind each initiative in plain language.
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1. Open Source in Artificial Intelligence: No More “Technological Hegemony” – Let’s Build an Open Source Ecosystem
【Key Message】
Previously, it was thought that AI was the domain of large corporations and powerful nations, with those possessing the most advanced models holding the key to the future. However, China’s proposal for open source in AI is clear: Technology should not be kept behind closed doors; it should be made accessible to everyone, especially developing countries.
【Simple Explanation】
Imagine if AI technology were as open-source as the internet. Engineers in smaller countries could develop applications tailored to their local languages and contexts without spending millions on licenses.
- For China: With its robust AI infrastructure and open-source communities (such as Baidu, Alibaba, and Huawei), China aims to establish its voice in setting global AI standards, making “Chinese standards” the norm.
- For Partner Countries: Nations like India, Brazil, and Saudi Arabia have large populations and data resources but lack the underlying technology. Open source allows them to skip expensive research and development stages and quickly enhance their productivity.
- Implication: China seeks to create a community where all can benefit from technological advancements, rather than being dominated by a few tech giants.
2. Facilitating Trade and Investment: Breaking Down “Hidden Barriers”
【Key Message】
BRICS countries trade extensively, but there are often non-tariff barriers such as complex customs procedures, different technical standards, and cumbersome investment approvals. This initiative aims to remove these obstacles and make trade and capital flows smoother.
【Simple Explanation】
- Current Challenges: A Chinese factory selling electric vehicles to Brazil might face complex certification processes, and a Saudi company investing in Indian manufacturing could be hindered by lengthy legal procedures. These additional costs can be significant.
- Action Steps: Simplifying customs procedures, unifying technical standards, and protecting investors’ rights will reduce these barriers.
- Importance: Most BRICS countries are emerging markets with rapid economic growth, but their infrastructure and systems are sometimes lagging behind. Streamlining these processes can significantly reduce transaction costs. For example, saving a day in logistics can translate into real profits, and fewer approval steps can attract more foreign investment.
- Context: Amidst rising global protectionism, efficient trade within BRICS is a great way to counter external uncertainties.
3. Digital Industry Cooperation: Moving from Resource Export to Data and Service Sales
【Key Message】
Traditionally, BRICS countries have been resource exporters (oil, minerals, agriculture). Digital industry cooperation means developing the digital economy together, such as in cloud computing, big data, e-commerce, and fintech.
【Simple Explanation】
- New Growth Drivers: The digital economy is the engine of future growth. For instance, India’s IT services, China’s e-commerce and payment systems, and Saudi Arabia’s financial resources can combine to create new business opportunities.
- Examples: Chinese e-commerce platforms can help local businesses in Africa or Latin America connect with global buyers. Blockchain can be used for cross-border payments, reducing exchange rate risks and fees. Joint data centers can share computing power.
- Strategic Significance: The digital economy offers high added value and low marginal costs. Cooperation can help BRICS countries move from the “low end” of the global value chain (resource sales) to the “mid-to-high end” (technology and services).
4. Smart Manufacturing Cooperation: Upgrading the “World Factory” to Avoid the “Middle Income Trap”
【Key Message】
Many BRICS countries are in the middle of industrialization, facing rising labor costs and the pressure to upgrade their industries. Smart manufacturing cooperation uses automation, robotics, and the industrial internet to transform traditional manufacturing.
【Simple Explanation：
- Real Needs: Countries like Vietnam, India, and Brazil are losing their labor cost advantages and need to upgrade their manufacturing capabilities. Chinese smart manufacturing solutions (smart factories, robots) can help improve efficiency and reduce reliance on cheap labor.
- Industrial Chain Synergy: China has a complete industrial chain; BRICS countries can provide application scenarios and markets. For example, Chinese smart equipment in Brazilian agriculture can improve precision farming, and Indian software can be combined with Chinese hardware to develop industrial operating systems.
- Avoiding the Trap: Many countries get stuck in the “middle income trap” due to failed industrial upgrades. Cooperation can help them complete these upgrades and maintain economic vitality.
5. Technological Talent Development: Solving the “Talent Shortage” for the Next 50 Years
【Key Message】
No matter how advanced the technology, it’s useless if no one knows how to use it or innovate with it. This initiative focuses on education, training, and talent exchange, especially in STEM fields.
【Simple Explanation】
- Challenges: Emerging markets often lack high-end and mid-level technical talent.
- Action Steps: Establishing joint laboratories and university alliances among BRICS countries, exchanging students, engineers, and scientists, and providing vocational training (e.g., teaching Indian workers to use Chinese machinery, Brazilian farmers to use drones for agriculture).
- Long-Term Value: Talent is the foundation of innovation. Cooperation in education not only addresses immediate technical needs but also prepares for future technological competition.
- Soft Power: Educational cooperation can enhance cultural understanding and build long-term friendly relations, laying a social foundation for economic cooperation.
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Summary: What is the Overall Goal of This Strategy?
These five initiatives form a coherent plan:
1. Foundation: Facilitating trade and investment to enable smoother trade and capital flows.
2. Driving Force: Digital and smart manufacturing cooperation to upgrade industrial structures.
3. Core: Open source in AI to share advanced technologies and benefits.
4. Guarantee: Technological talent development to ensure technology is utilized and innovation is possible.
What does this mean for ordinary people?
- For Investors: The internal markets of BRICS countries are integrating, offering more cross-border investment opportunities, such as in Indian digital infrastructure, Brazilian smart agriculture, or Saudi renewable energy projects.
- For Professionals: Those in IT, manufacturing, logistics, education, and related fields may find new job or entrepreneurial opportunities, such as localizing Chinese services for overseas companies or consulting on technology transfers.
- For the Global Economy: BRICS accounts for over half of the world’s population and about 25% of GDP. If these countries truly form an integrated market and gain control of AI and smart manufacturing, it could significantly impact the current global trade order, leading to a multi-polar economic landscape.
In one sentence: China’s goal is not to “lead” BRICS but to act as a “server” and “connector,” using technology, markets, and talent to unite the group to face external risks and share development benefits. This is not just about economic cooperation but also a major geopolitical strategy.