The BRICS meeting was held this week in China. The BRICS countries are Brazil, Russia, India, China, and South Africa. This is a diverse lot with different growth rates and political systems, yet they have a two things in common which will affect the global financial system. First, they are all connected to China for trade relations. Second, they represent the most dynamic portion of the global economy. Their stated views on cooperation has been called the Sanya Declaration, with the theme "Broad vision, shared prosperity".
Simply put, key countries are moving forward with trade relations outside the US dollar/EU euro system. As expected the BRICS meeting continued to bash the dollar dominated financial system. What is important is that these countries have started to work on developing credit facilities based on the yuan.
China has the money and wants to use it to advance their trade interests. This is no different than the US at the turn of the last century. The US started to assert itself in credit markets before the fall of the sterling/gold based currency system.
This development will make the G7 and G20 less relevant. It will also mean that the World Bank and IMF will likely have lesser roles in the development of the global economy. Regionalism may dominate global finance
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