Tag: brics

The intention of Beijing is to get BRICS to accept RMB as the common currency, replacing the US dollar….writes Madhav Nalapat

A visitor to China will find much that has been designed and built to impress, whether it be the massive skyscrapers or the multi-lane highways crisscrossing a city and the country. High-speed trains convey passengers at speed smoothly to numerous destinations, evoking awe in the minds of visitors. Older and even not so old buildings are razed to the ground and replaced with modern structures, and overall there is an impression of bustle that could rival cities such as Tokyo or Mumbai in the business quotient.

Taiwan is very different. Although the per capita income of the small but significant island is over $33,000 as compared to $12,000 in China, the capital of Taiwan is unpretentious. The roads are smaller, as are the houses, not to mention that older buildings are allowed to remain rather than get torn down. Comparing the two sides, it would be difficult to guess that it is Taiwan that is in per capita terms more of a powerhouse than its much larger neighbour on the other side of the straits.

The buildup of infrastructure in Taipei has been sedate as compared to that witnessed in Beijing. What is unmistakable is the difference in the ambience. Folks in the Chinese capital are more careful about what they speak and to whom. There is an invisible CCP-directed script that they adhere to so consistently that doing so has become second nature to them, so much so that they almost believe what they are saying to others, especially to foreigners. In contrast, people in Taiwan are relaxed about airing their views.

Political parties and television channels each have their own script, all of which causes the ambient noise that is the cadence of discourse in democracies. While almost all the people across both sides of the Taiwan Straits come from the same ancestral roots, they have evolved into entirely different societies. Whatever was left of the mood for unification with China has been dissipated by the experience of once different Hong Kong, which has been pummelled into subservience to the CCP the way the rest of the PRC has.

Whether it be within the PRC or in the littoral of China, locations such as ASEAN or even Taiwan, high-ranking visiting officials of the CCP walk with a swagger, steeped as they are in the belief that Might is Right.

In the CCP-directed script, it is always China that is the peace loving country, that is never the aggressor. That any contrary impression is because of untruths peddled by US media. What had been concealed from getting expressed in the past is now openly said, which is that the US is the enemy. There are more than a few in the Biden administration who remain trapped in the fog of memories relating to Cold War 1.0, during which Beijing was an ally in the battle against Moscow.

Joe Biden has been a Cold Warrior throughout his political life, and it is no accident that he was the prime mover behind the effort launched by NATO since 2022 to terminally weaken the Russian Federation, so that it dissolves into fragments. This is an eventuality that would be welcomed in Beijing, which would waste little time in seizing as much land in eastern Russian as it could. Not for the first time, by its actions Washington has speeded up the pace of the effort by the CCP to overtake the US not merely in GDP but in terms of global power and influence.

To take a single example, US Treasury Secretary Janet Yellen signed on to the numerous sanctions on Russia that have so affected global growth, and continues to believe that any large scale shift of US investment from China to elsewhere would be a disaster for the US a stand that has earned her the title of “useful idiot” of the PRC from Senator Tom Cotton. Not that Janet Yellen appears to have noticed, but even in recent times, the PRC has occupied huge chunks of land, air and sea space that does not belong to it.

Each such acquisition is justified on the ground that it is Chinese territory. In the PRC telling of a wrong narrative, there has been no aggression against India, to take the example of the world’s largest democracy. All that the PLA soldiers were doing was to take a stroll in their own land when they were interrupted by Indian troops. In the CCP book, any territory occupied by China or which is a target of that country’s expansionism is by definition Chinese and has always been. Such are the rules of the game that Beijing would like the world to play by.

The western world has often been accused by others of having set up a rules-based international order that they themselves ignore in practice whenever it is convenient to do so. Or to set rules that have the effect of perpetuating western dominance. In the longstanding tradition of copying the example of the US, the CCP is seeking to replace Washington and its western allies as the prime movers in global affairs while creating a set of international rules that are skewed to favour the PRC.

The BRI is an example, where almost all the money spent flows back to China in some form or the other. A multilateral world calls for rules that are neutral between countries, not those that tilt in one direction or the other. Those countries that preach multilateralism while promoting a unilateral world order need to have their biases called out.

There was a lot of discussion within BRICS about using each other’s currency for purposes of trade. Had the idea been implemented, each of the members of BRICS would have been the gainers. However, it is clear that the intention of Beijing is to get the group to accept RMB as the common currency, replacing the US dollar.

Which is why efforts to revert to the rupee-rouble trade that took place during the Soviet era failed. Behind the scenes, Xi persuaded Putin to ensure that the Russian Federation asked for payment for its oil not in rupee terms but in RMB. There is clearly no interest in Beijing for the rupee to begin to be used more widely as a key currency in international trade, as would have been the case were there to be a revival of the rupee-rouble agreement.

Nor is there any desire in Beijing to promote the South African rand or the Brazilian real. Only the RMB matters or ought to matter. A fitting response would be for IBSA (India Brazil South Africa) to begin using each other’s currencies in trade amongst themselves, an initiative that could be taken by ASEAN as well. Genuine multilateralism calls for such moves, and not merely the exchange of a single dominant power or currency with another.

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