BRICS expansion is all about China

Late last week, the five-nation BRICS group — Brazil, Russia, India, China and South Africa — announced at its annual summit that beginning in 2024 it would add six additional nations to the group. The BRICS extended invitations to Saudi Arabia, Iran, the United Arab Emirates, Egypt, Ethiopia and Argentina. Other states, notably Turkey, had also hoped to join the group, but could not win the required unanimous support of all five existing members.

The BRICS are neither a grouping of autocracies nor a grouping of democracies. There is something of a balance among them: Freedom House ranks Russia and China as “not free,” while it considers India “partly free” and Brazil and South Africa “free.”

Indeed, it has never been clear what exactly the BRICS actually do or stand for. It is not an economic or customs union, nor are its member linked militarily. While South Africa and China have supported Russia in its conflict with Ukraine, India has refused to align itself with either side. India and China have clashed militarily. Brazil is an American ally as a member of the Rio Treaty, while India has increasingly moved closer to the U.S. both economically and militarily.

On its face, BRICS expansion will further complicate the group’s ability to function in a coordinated manner. The Emiratis have joined the Abraham Accords with Israel, and the Saudis have at least considered doing so as well — much to the consternation of Iran, Israel’s implacable enemy. The Emirates and Saudis coordinate militarily with Washington, and Argentina, like Brazil, is a Rio Treaty signatory. Egypt remains a major recipient of American military and economic assistance. And Egypt and Ethiopia have yet to resolve their dispute over the latter’s construction of a dam at the Nile’s headwaters; a new set of negotiations collapsed earlier this week.

If there is one common denominator among almost all the current and all future BRICS members, it is their trade and investment relationships with China. While neither Brazil nor India participate in China’s Belt and Road Initiative, all the new entrants do, and they are all major trading partners with Beijing.

Trade between China and Brazil, already quite significant, is expected to expand in the aftermath of Brazilian president Lula da Silva’s April visit to Beijing. In particular, China has committed to spend $600 million to develop a complex in Brazil’s Bahia province that will produce electric and hybrid vehicles. The agreement comes on the heels of last year’s $1.9 billion 10-year Chinese investment in a similar complex in São Paulo state.

Argentina joined China’s Belt and Road Initiative in February 2022. China is second only to BRICS member Brazil as Argentina’s leading trading partner. China has sold military aircraft and ground systems to Argentina. It has also provided Buenos Aires with critical financial assistance that enabled it to repay 2018 loans from the International Monetary Fund. In April, Beijing and Buenos Aires agreed that Argentina could pay about $1 billion for imports in Chinese Yuan instead of U.S. dollars.

China has also become a major trading partner and investor in the three new Middle Eastern BRICS entrants — Saudi Arabia, the United Arab Emirates and Iran. The Kingdom of Saudi Arabia joined the Belt and Road Initiative five years ago; in June, the two countries signed a deal worth $10 billion in Chinese investments in mining, electric vehicles and renewables. China is Saudi Arabia’s largest trading partner with $106 billion in 2022, about twice the trade between the Saudi and the U.S.

China’s trade and investment profile with the UAE is roughly similar to that with Saudi. The UAE is also a member of the Belt and Road Initiative, and China is the third-largest investor in the Emirates, establishing about 6,000 companies there. China is also the UAE’s largest trading partner, ahead of India and the United States.

China is Iran’s second largest investor; only BRICS member Russia, which has benefited from Iranian military support in the war with Ukraine, has invested more funds in the Islamic Republic. China has signed a 25-year economic and military agreement with Iran, though its real benefits to Tehran have yet to be identified. China is also Iran’s largest trading partner, as it has been for the past decade.

China has radically increased its trade with Egypt, as well as becoming a major investor in the country. Though it is not one of the top five investors in Egypt, Chinese investment in the country increased by 317 percent from 2017 to 2022. China also has become the leading exporter to Egypt, and is its second largest trading partner after the UAE.

Though China is not one of Ethiopia’s major trading partners, the rate of Beijing’s imports from Ethiopia grew faster in 2022 than that of any other nation except Kenya. Moreover, China was by far the largest investor in Ethiopia, accounting for some 60 percent of all foreign investment in the country.

Perhaps not surprisingly, India is the one major outlier with respect to Chinese investment. Not only is it not a participant in the Belt and Road Initiative, it has increasingly restricted Chinese investment. Nevertheless, even India is a major trading partner with China. Despite a slight decrease in 2022-2023, China remained India’s second-largest trading partner, behind only the U.S.

China has long sought to replace the United States as the world’s economic fulcrum. The expansion of the BRICS demonstrates that, in addition to its increasing military aggressiveness in East and Southeast Asia, Beijing continues to pursue its worldwide economic objectives, particularly in the Middle East and the Global South. With growing economic ties comes increased political influence; perhaps Washington should reconsider its decision to downgrade the priority it accords to both regions.

Dov S. Zakheim is a senior adviser at the Center for Strategic and International Studies and vice chairman of the board for the Foreign Policy Research Institute. He was undersecretary of Defense (comptroller) and chief financial officer for the Department of Defense from 2001 to 2004 and a deputy undersecretary of Defense from 1985 to 1987.