Connect with us

World

China-India Conflict a Potential Threat to BRICS Association

Published

on

BRICS leaders

By Kestér Kenn Klomegâh

The tension between China and India threatens to paralyse BRICS – the association of five major emerging national economies: Brazil, Russia, India, China and South Africa. While struggling to expand and influence on the global stage, China and India have locked horns over issues in their bilateral relations, ranging from border security to trade conflicts and information war.

The latest strains began in early May and culminated in hand-to-hand fighting in the Galwan Valley, a remote stretch of the 3,380-kilometre (2,100-mile) Line of Actual Control – the border established following a war between India and China in 1962 that resulted in an uneasy truce.

Punsara Amarasinghe, a former research fellow at the Faculty of Law, Higher School of Economics in Moscow, and now a PhD candidate in international law at the Sant’Anna School of Advanced Studies in Pisa, Italy, argues that this tension is rather ironic given that in the past the two countries shared many civilisational values and both were victims of Western colonialism.

When India gained independence in 1947 from the British, its first prime minister Jawaharlal Nehru built a rapport with Communist China by accepting the government of Mao Zedong with great anticipation that both China and India would become the stalwarts in the global campaign against Western imperialism. For example, it was Nehru’s idea that China should be granted a place in the non-aligned movement despite some of opposition from some members at the famous Bandung Conference in 1955.

However, the comity between the two nations was short-lived as China claimed the territory near Arunachal Pradesh whereas India adhered to the line of control known as the McMahon Line established by the British under the 1914 Simla Convention with the consent of Tibet. From the 1950s onwards, China showed its interest in the Aksai Chin area albeit its cordial relations with Nehru’s India. This long dispute finally ended in military escalation in 1962 and became known as the Sino-Indian War.

While acknowledging that some other issues have marred their relationship apart from the current border conflict, Amarasinghe told this article author that “both China and India have longed for global governance as emerging powers, and particularly, the influence expanded by China in South Asia has rapidly increased India’s doubt on China’s presence. Secondly, China’s ambitious Belt and Road Initiative project has encircled India geopolitically, creating a plethora of doubts about India’s state apparatus.”

He added that the notion of nuclear weapon strategies and India’s affinity with the USA are the biggest dilemmas that China has persistently had in dealing with India. Moreover, India has been the sanctuary for Tibetan refugees, including the Dalai Lama.

As to the fundamental question of whether all these issues put together could reappear in future, Amarasinghe emphasized: “Having looked at the trajectories of the history of Indo-China conflict, one can ascertain that the India-China issue has always been imbued with a question of power. Both states are yearning for global governance. Yet India is ahead of the curve as the world’s largest democracy and a state with one of the strongest soft powers, making the Indian narrative stronger, whereas Beijing is known for its autocracy.”

On the other hand, he reminded, “We should not forget that the pact signed between China and India in 1996 clearly says that two states cannot use firearms in a border dispute escalation. However, there have been several events that have shown the acts of aggression in the Indo-China border conflict. The Chinese efforts to build a road in the Doklam area near the border created a tense situation in 2017. Three years after that event, the conflict erupted again.”

China’s Foreign Ministry stipulated measures that would be implemented to normalise the situation and prevent future armed conflicts. “The sides welcomed the developments of relations between defence agencies and the external affairs ministries, agreed to support such consultations in the future and implement agreements that were reached by the two sides during the talks between the border troops commanders, as well complete as soon as possible the process of frontline troop withdrawal,” read a ministry statement.

The Foreign Ministry noted that the sides also reached an agreement to implement measures to “prevent the reoccurrence of incidents which may influence the situation and peace in the border region.”

“The relationship of China and India underwent various trials and their progress towards modern development was not always swift. As had been recently demonstrated correctly, and at the same time incorrectly, by the recent incident in the western sector of the China-India border in the Galwan River valley, China will continue to assert its territorial sovereignty as well as peace and tranquillity in the border region,” according to the statement.

The sides expressed readiness to respect the agreements achieved previously by the heads of state, pay specific attention to the issue of state borders and prevent “disagreements from becoming conflicts.” The sides also confirmed their adherence to the earlier agreements on the state border and expressed readiness to implement measures to normalise the situation in the border region.

Sino-Indian geopolitical rivalry is certainly not new, but today it has multifaceted implications for developments in the South Asian region and most possibly for BRICS. For example, in email discussions, Dr. Zhu Ming of the Institute for Global Governance Studies at the Shanghai Institute for International Studies (SIIS), noted that while there have been several disagreements between China and India, some have been resolved within the framework of international law but others have remained without comprehensive solutions.

Within the context of geopolitical alliances and emerging challenges, Tahama Asadis, a graduate of Strategic Studies from the National Defence University in Islamabad, noted the changing alliances and power equilibrium among the United States, China, India and Pakistan that bear key implications for inter-state rivalry and the consequent crisis dynamics in South Asia.

China has so far been successful in influencing South Asia because of many factors. One of the major reasons is that China has managed to project itself as a neighbour that would not interfere in the internal affairs of other countries, least of all, in the internal affairs of its friends and partners. In the light of its ‘Good Neighbour Policy’, China’s increased diplomatic and economic engagements in South Asia are aimed at enhancing its strategic influence in the region.

Professor Ian Taylor at the University of St Andrews in the United Kingdom explained that he did not see any long-term future for the BRICS as a coherent grouping on the world stage. According to Taylor, the China-India rivalry (as exemplified by border clashes) shows how shallow the alliance is. Furthermore, Brasilia has its own “Brazilian Trump” who sees alliance with the West as the way forward, not with other “developing countries”.

Originally, BRIC was a four-member alliance until South Africa officially became a member in December 2010, after formally being invited by China to join and subsequently being accepted by the founding BRIC countries. The group was renamed BRICS – with the “S” standing for South Africa – to reflect the group’s expanded membership. South Africa is a staunch member of the Southern African Development Community (SADC).

“South Africa is in terminal decline and was only admitted to the BRICS for politically expedient-politically correct reasons. Its membership damaged the group’s credibility. And of course, China will resist to the very end the notion that India be admitted to the UN Security Council as a Permanent Member,” Taylor explained, adding that so much for the vaunted “South-South solidarity” that the BRICS was supposed to represent and what all the noise was about when it was launched.

Zhu Ming holds conservative not so negative views on the future of BRICS amid India-China conflicts, giving two reasons. The first and most important is that Beijing is still keeping a low profile on this conflict. For instance, Chinese local media coverage of this conflict is still quite low, and Beijing has not revealed losses on the Chinese side in order not to form the impression of too huge a gap in losses between the two sides as to humiliate the Indian side. “Just imagine, if two people were fighting, the situation would be extremely hard to turn back to normal very soon. But if one side could keep relatively calm, the situation would be more optimistic.”

Secondly, the disputed land is not worthy of a war between the two countries. “However, the rising nationalist mood of India is a bit troublesome. BRICS is not nothing to New Delhi, it will not be a good option for India to quit BRICS. Since BRICS was formed jointly by five powers, China does not own BRICS,” he told this article author, adding, “It is a bit early to judge the prospects of BRICS. It is quite possible that the global and BRICS health governance system could be another rising cooperation field within the BRICS group after the forthcoming BRICS summit.”

“While there are no official claims from the Kremlin that Putin was brokering any negotiation between the two to reconcile the border dispute if Russia can make a good move in meddling with the Indo-China border conflict, I assume it will work to a greater extent. Given the history of Russia’s dominant role in South Asia since its Soviet past, Moscow has a greater capacity to play the role of mediator. Besides that, BRICS is a platform for emerging powers and its capacity cannot be discarded as a regional political talk shop. Thus, I believe BRICS would create some steps for a more amicable solution,” Amarasinghe concluded on an optimistic note.

Alicia Garcia-Herrero is Senior Research Fellow at the Brussels-based think tank Bruegel and Adjunct Professor at the Hong Kong University of Science and Technology, noted in her article headlined “China Continues To Dominate An Expanded BRICS” published by the East Asia Forum that China has been the leading proponent of expanding BRICS to BRICS+. The main reason for the expansion was to make BRICS more representative of the developing world and give it a stronger voice on the global stage.

But the six countries invited to join — which has become five after Argentina’s withdrawal — are quite heterogeneous. Some are net creditors (such as Saudi Arabia and the United Arab Emirates), while others are net debtors and in a very weak financial position. Half of them are large exporters of fossil fuels (Saudi Arabia, the United Arab Emirates and Iran). Ethiopia and Egypt stand out as members from Africa, a continent that has become increasingly important for China’s and India’s foreign policy, according to Garcia-Herrero.

The BRICS countries are considered the foremost geopolitical rival to the G7 bloc of leading advanced economies, implementing competing initiatives such as the New Development Bank, the BRICS Contingent Reserve Arrangement, the BRICS pay, the BRICS Joint Statistical Publication and the BRICS basket reserve currency. But in practical reality, China has large control and uses the platform to widen its economic influence. Most of the trade growth has been China-centric, with contributions from the rest of BRICS remaining quite flat until recently. Russia, with its limited economic impact, only remains an excellent public relations organizer for BRICS.

The BRICS members are known for their significant influence on regional affairs, and all are members of the G20. Since its establishment in 2009, the BRICS nations have met annually at several summits, with South Africa having hosted the most recent 15th BRICS Summit in August 2023. Currently, Russia is heading the rotating in 2024 and plans to push forward significant issues, particularly the association’s expansion and transforming it into an anti-Western coalition. Reports indicate about 40 countries, the majority in Africa and Asia have expressed readiness to join BRICS from the Global South. The association has three areas of strategic partnership: policy and security, economy and finance, and cultural and educational cooperation.

Between now and until October when Kazan will host the 16th summit, Moscow has scheduled various activities including the BRICS Games, BRICS Foreign Ministers, BRICS Academic and BRICS Parliamentary meetings, these aim at showcasing BRICS geopolitical influence and increasing coalition for building a fairer, better and multipolar world. It also operates based on non-interference and equality with the hope of ensuring members get mutual economic benefits in the world. BRICS has received both praise and criticism from academics, researchers, politicians geopolitical analysts and writers around the world.

The origins of BRICS — a bloc comprising Brazil, Russia, India, China, South Africa and, as of 2024, new members Egypt, Ethiopia, Iran and the United Arab Emirates — can be traced back to a 2001 publication by Goldman Sachs economist Jim O’Neill titled ‘Building Better Global Economic BRICs’. O’Neill argued that Brazil, Russia, India and China were poised to play an increasingly significant role in the global economy. BRIC was officially launched in 2009 and was renamed BRICS in 2010 when South Africa joined, and Russia will make history by admitting the largest ever in 2024.

The founding countries of Brazil, Russia, India, and China held the first summit in Yekaterinburg in 2009, with South Africa joining the association a year later. Egypt, Ethiopia, Iran and the United Arab Emirates joined on 1 January 2024 The five BRICS countries together represent over 3.1 billion people, or about 41 percent of the world population. The five nations had a combined nominal Gross Domestic Product (GDP) of 18.6 trillion dollars and an estimated 4.46 trillion dollars in combined foreign reserves.

World

Trump’s Tariffs, Russia and Africa Trade Cooperation in Emerging Multipolar World

Published

on

Trump's Tariffs

By Kestér Kenn Klomegâh

With geopolitical situation heightening, trade wars are also becoming increasingly prominent. The 47th United States President Donald Trump has introduced trade tariffs, splashed it over the world. China, an Asian trade giant and an emerging economic superpower, has its highest shared.

South Africa, struggling with its fragile foreign alliances, is seriously navigating the new United States economic policy and trade measures, at least to maintain its membership in the African Growth and Opportunities Act (AGOA) which is going to expire in September 2025.

It is a well-known fact that AGOA waived duties on most commodities from Africa in order to boost trade in American market. The AGOA also offers many African countries trade preferences in the American market, earning huge revenues for their budgets. Financial remittances back to Africa also play mighty roles across the continent from the United States.

That however, the shifting geopolitical situation combined with Trump’s new trade policies and Russia’s rising interest in Africa, the overarching message for African leaders and business corporate executives is to review the level of degree how to appreciably approach and strengthen trade partnership between Africa and Russia.

The notion of a new global order and frequently phrased multipolar world, indicating the construction of a fairer architecture of interaction, in practical terms, has become like a relic and just as a monumental pillar. Even as we watch the full-blown recalibration of power, the geopolitical reshuffling undoubtedly creates the conditions for new forms of cooperation.

In this current era of contradictions and complexities we are witnessing today, we must rather reshape and redefine rules and regulations to facilitate bilateral and multilateral relations between African countries and Russia, if really Russia seeks to forge post-Soviet strategic economic cooperation with Africa.

In fact, post-Soviet in the sense that trade is not concentrate on state-to-state but also private – including, at least, medium scale businesses. The new policy dealing with realities of the geopolitical world, distinctively different from Soviet-era slogans and rhetorics of ‘international friendship and solidarity’ of those days.

Bridging Africa and Russia, at least in the literal sense of the word, necessitates partial departure from theoretical approach to implementing several bilateral and multilateral decisions, better still agreements reached at previous summits and conferences during the past decade.

Understandably Africa has a stage, Russia termed ‘the struggle against neo-colonial tendencies’ and mounting the metal walls against the ‘scrambling of resources’ across Africa. Some experts argued that Africa, at the current stage, has to develop its regions, modernize most the post-independence-era industries to produce exportable goods, not only for domestic consumption. Now the emphasis is on pushing for prospects of a single continental market, the African Continental Free Trade Agreement (AfCFTA).

This initiative, however, must be strategically and well-coordinated well, and here I suggest integration and cooperation starting at country-wide basis to regional level before it broadly goes to the entire continent, consisting 54 independent states.

These are coordinated together as African Union (AU), which in January 2021 initiated the African Continental Free Trade Agreement (AfCFTA). With this trading goals in mind, Africa as a continent has to integrate, promote trade and economic cooperation, engage in investment and development. In that direction, genuine foreign partners are indiscriminately required, foreign investment capital in essential for collaboration as well as their entrepreneurial skills and technical expertise.

For instance, developing relations with Asian giants such China and India, the European Union and the United States. A number of African countries are shifting to the BRICS orbit, in search for feasible alternative opportunities, for the theatrical trade drama. In the Eurasian region and the former Soviet space, Kazakhstan and Russia stand out, as potential partners, for Africa.

Foreign Affairs Minister Sergey Lavrov has said, at the podium before the staff and students at Moscow State Institute of International Affairs in September, that trade between Russia and Africa would grow further as more and more African partners continued to show interest in having Russians in the economic sectors in Africa. This provides greater competition between the companies from Western countries, China, and Russia. With competition for developing mineral resources in Africa, it is easier and cheaper for African colleagues to choose partners.

As far back in October 2010, Russian Foreign Affairs Ministry posted an official report on its website that traditional products from least developed countries (including Africa) would be exempted from import tariffs. The legislation stipulated that the traditional goods are eligible for preferential customs and tariffs treatment.

Thereafter, Minister Sergey Lavrov has reiterated, in speeches, trade preferences for African exporters, but terribly failed to honour these thunderous promises. Notwithstanding the above granting trade preferences, there prevailing multitude of questions relating to the pathways of improving trade transactions, and removing obstacles including those Soviet-era rules and regulations.

Logistics is another torny hurdle. Further to this, Russian financial institutions can offer credit support that will allow to localize Russian production in Africa’s industrial zones, especially southern and eastern African regions that show some stability and have good investment and business incentives.

In order to operate more effectively, Russians have to risk by investing, recognize the importance of cooperation on key investment issues and to work closely on the challenges and opportunities on the continent. On one hand, analyzing the present landscape of Africa, Russia can export its technology and compete on equal terms with China, India and other prominent players. On the other hand, Russia lacks the competitive advantage in terms of finished industrial (manufactured) products that African consumers obtain from Asian countries such as China, India, Japan and South Korea.

Compared to the United States and Europe, Russia did very little after the Cold War and it is doing little even today in Africa. On 27th–28th July 2023, St Petersburg hosted the second Russia-Africa summit. At the plenary session, President Vladimir Putin underscored the fact that there was, prior to the collapse of the Soviet, there were over 330 large infrastructure and industrial facilities in Africa, but most were lost. Regarding trade, Putin, regrettably, noted Russia’s trade turnover with the African countries increased in 2022 and reached almost US$18 billion, (of course, that was 2022).

Arguably, Russia’s economic presence is invisible across Africa. It currently has insignificant trade statistics. Until the end of the first quarter of 2025, Russia still has a little over $20 billion trade volume with Africa. Statistics on Africa’s trade with foreign countries vary largely.

For example, the total United States two-way trade in Africa has actually fallen off in recent years, to about $60 billion, far eclipsed by the European Union with over $240 billion, and China more than $280 billion, according to a website post by the Brookings Institution.

According to the African Development Bank, Africa’s economy is growing faster than those of any other regions. Nearly half of Africa is now classified as middle income countries, the numbers of Africans living below the poverty line fell to 39 percent as compared to 51 percent in 2023, and around 380 million of Africa’s 1.4 billion people are now earning good incomes – rising consumerism – that makes trade profitable.

Nevertheless, there is great potential, as African leaders and entrepreneurial community are turing to Russia for multifaceted cooperation due to the imperialist approach of the United States and its hegemonic stand triggered over the years, and now with Trump new trade tariffs and Washington’s entire African policy.

China has done its part, Russia has to change and adopt new rules and regulations, pragmatic approach devoid of mere frequent rhetorics. It is important discussing these points, and to shamelessly repeat that both Russia and Africa have to make consistent efforts to look for new ways, practical efforts at removing existing obstacles that have impeded trade over the years.

Sprawling from the Baltic Sea to the Pacific Ocean, Russia is a major great power and has the potential to become a superpower. Russia can regain part of its Soviet-era economic power and political influence in present-day Africa.

Certainly, the expected superpower status has to be attained by practical multifaceted sustainable development and by maintaining an appreciably positive relations with Africa. We have come a long way, especially after the resonating first summit (2019 and high-praised second summit (2023), several bilateral agreements are yet to be implemented. The forthcoming Russia – Africa Partnership summit is slated for 2026, inside Africa and preferably in Addis Ababa, Ethiopia.

Kestér Kenn Klomegâh is a frequent and passionate contributor. During his professional career as a researcher specialising in Russia-Africa policy, which spans nearly two decades, he has been detained and questioned several times by Russian federal security services for reporting facts. Most of his well-resourced articles are reprinted in a number of reputable foreign media.

Continue Reading

World

Tariff War Threatens Global Economy, US-China Goods Trade By 80%—WTO DG

Published

on

Okonjo-Iweala

By Adedapo Adesanya

The Director General of the World Trade Organization (WTO), Mrs Ngozi Okonjo-Iweala, has said the US-China tariff war could reduce trade in goods between the two economic giants by 80 per cent and hurt the rest of the world economy.

President Donald Trump raised tariffs on China to 125 per cent on Wednesday as the world’s two largest economies fought over retaliatory levies.

The American President earlier ramped up duties on Chinese goods to 104 per cent, only to hike them further when China retaliated by raising tariffs on US imports to 84 per cent.

In a social media post announcing the moves, President Trump said China had been singled out for special treatment because of “the lack of respect that China has shown to the world’s markets.”

In her reaction to the development, the WTO DG said in a statement that, “The escalating trade tensions between the United States and China pose a significant risk of a sharp contraction in bilateral trade. Our preliminary projections suggest that merchandise trade between these two economies could decrease by as much as 80 per cent.”

She said the United States and China account for three per cent of world trade and warned that the conflict could “severely damage the global economic outlook”.

Even as he slapped further tariffs on China, Mr Trump paused higher tariffs on the rest of the world for 90 days, claiming that dozens of countries reached out for negotiations.

Mrs Okonjo-Iweala warned that the world economy risked breaking into two blocs, one centred around the United States and the other China.

“Of particular concern is the potential fragmentation of global trade along geopolitical lines. A division of the global economy into two blocs could lead to a long-term reduction in global real GDP by nearly seven percent,” she said.

She urged all WTO members “to address this challenge through cooperation and dialogue.”

“It is critical for the global community to work together to preserve the openness of the international trading system.”

“WTO members have agency to protect the open, rules-based trading system. The WTO serves as a vital platform for dialogue. Resolving these issues within a cooperative framework is essential,” she added.

Continue Reading

World

AFC Tops $1bn Revenue in 2024 Financial Year

Published

on

Africa Finance Corporation

By Adedapo Adesanya

Africa Finance Corporation (AFC), the continent’s top infrastructure solutions provider, has announced its strongest financial performance to date, with total revenue for the year ended December 31, 2024 surpassing $ 1 billion for the first time in its history.

This record performance marks a significant milestone in AFC’s mission to close Africa’s infrastructure gap through scalable, de-risked investments that attract global capital and deliver tangible development outcomes.

The corporation posted a 22.8 per cent increase in total revenue to US$1.1 billion and a 22.3 per cent rise in total comprehensive income to $400 million, up from $327 million in 2023.

AFC’s earnings growth was driven by improved asset yields, prudent cost-of-funds management and sustained traction in advisory mandates.

Further significant financial highlights include net interest income up 42.5 per cent to $ 613.6 million; fee and commission income rose to $109 million, the highest in over five years; operating income climbed 42.7 per cent to $709.7 million; total assets reached a record $14.4 billion, a 16.7 per cent year-on-year increase; liquidity coverage ratio strengthened to 194 per cent, providing over 34 months of cover; and cost-to-income ratio improved to 17.3 per cent from 19.6 per cent in 2023.

According to a statement, AFC said throughout 2024 it continued to scale its impact by mobilising capital for landmark projects across energy, transport, and natural resources.

These included the Lobito Corridor – a cross-border railway development spanning Angola, the Democratic Republic of Congo (DRC), and Zambia. AFC led the initiative to secure a concession agreement within one year of the initial Memorandum of Understanding (MoU), an unprecedented achievement for a project of its scale. In the DRC, AFC also invested $150 million in the Kamoa-Kakula Copper Complex, Africa’s largest copper producer and one of the most sustainable globally, thanks to its high-grade ore and renewable-powered smelter.

Other milestones transactions included financing support for the commissioning of the Dangote Refinery, the largest in Africa, and continued progress on AFC-backed Infinity Power Holding’s 10 GW clean energy ambition, with power purchase agreements secured in Egypt and South Africa.

AFC also invested in the 15GW Xlinks Morocco-UK Power Project, providing $14.1 million to support early-stage development of a transcontinental renewable energy pipeline between North Africa and Europe.

AFC strengthened its capital base and expanded its investor network through several landmark funding initiatives. These included a $ 1.16 billion syndicated loan – the largest in its history, a $500 million perpetual hybrid bond issue, and the successful execution of Nigeria’s first-ever domestic dollar bond, which raised $900 million at 180 per cent oversubscription.

AFC also returned to the Islamic finance market after eight years, closing a $400 million Shariah-compliant facility.

The year also saw strong momentum in equity mobilisation, with $181.8 million in new capital raised from ten institutional investors. These included Turk Eximbank – AFC’s first non-African sovereign shareholder – the Arab Bank for Economic Development in Africa (BADEA), and several major pension funds spanning Cameroon, Seychelles, Mauritius, and South Africa. Ratings agencies affirmed AFC’s robust credit profile, with AAA ratings from S&P Global (China) and China Chengxin International, and a stable A3 Outlook from Moody’s.

Speaking on the result, Ms Samaila Zubairu, President & CEO of AFC said, “These results send a clear message that strategic investment in African infrastructure creates lasting value for both beneficiaries and investors.”

“In 2024, we exceeded the billion-dollar revenue mark, delivered game-changing projects, and reinforced our financial resilience—demonstrating the scalability of our unique model that blends purpose with performance to accelerate Africa’s economic transformation,” she added.

Continue Reading

Trending