BRICSHouse Five

The BRICS summit being held in Sanya on Hainan Island on Thursday will probably be presented as a united front of the leading emerging economies. The clarion call will be for strengthened cooperation and coordination between the quintet (South Africa makes five) over global issues such as trade, financial regulation and microeconomic policy, and the environment and climate change.

Yet there are plenty of underlying tensions between the members. China’s relations with Brazil are a case in point. Brazil’s new president, Dilma Rousseff, is making a concomitant state visit. Behind the headline trade deals (China is Brazil’s leading trade partner, with a small surplus in Brazil’s favor), she will be expressing concerns heard increasingly at home that Chinese manufacturing exports to Brazil are de-industrializing the Brazilian economy, while Brazilian exports to China are over concentrated in commodities. (State media are making a big counterpoint of the fact that China is buying Brazilian aircraft as part of the trade deals.)

Certainly the strength of the real, exacerbated by Brazil’s commodity exports to China, makes Chinese exports even cheaper in competition with domestic products. Rousseff will have been pressing Beijing to press ahead more vigorously with letting the yuan appreciate. People who live in bricshouses can still throw stones.

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