What impact did Xi's and Putin's absence from this year's BRICS summit? | DW News

Key Concepts:

• BRICS alliance
• Tariff threats
• Global trade
• US-BRICS relations
• China-Russia economic partnership
• Western companies in Russia
• Risk-reward calculation for businesses
• Dual-use goods
• Sanctioned goods

BRICS and US Tariff Threats:

• Countries aligned with the BRICS alliance have criticized tariff threats made by US President Donald Trump, viewing them as a danger to global trade.
• Trump responded by threatening an additional 10% levy on countries aligning with BRICS policies.
• The BRICS grouping includes 11 nations, primarily developing countries, but also US allies like Brazil, Saudi Arabia, and Indonesia.
• The summit in Rio de Janeiro occurred without the presence of the leaders of Russia and China, both founding members.

Absence of Russia and China at BRICS Summit:

• Alina Rakova (Peterson Institute for International Economics) suggests that the absence of the leaders of China and Russia signals that even the founding members of BRICS may not consider it a high-priority forum.
• Putin's absence may be due to the risk of arrest related to an ICC judgment against him.
• Xi Jinping's absence is interpreted as a deliberate signal of potentially diminishing importance placed on BRICS.

China-Russia Economic Partnership:

• Rakova characterizes the economic relationship between Russia and China as one of "desperation" for Russia and "opportunistic" for China.
• China has become Russia's largest trade partner, but it is not investing heavily in Russia.
• China provides Russia with consumer goods and dual-use goods (including Western goods) for military purposes.
• Large-scale projects like the "Power of Siberia" pipeline have been discussed for years but have not progressed significantly.
• Russia's share in China's trade is small compared to the US, Europe, and other countries, and its investment share is negligible.

Western Companies Returning to Russia:

• Putin has claimed that some Western companies are looking to return to Russia.
• Rakova questions the rationale for businesses to return, emphasizing the risk-reward calculation.
• Russia's economy is heavily reliant on oil, gas, and metals/mining (80% of exports).
• The period of high oil prices (2000s, from $13 to $113 per barrel) is unlikely to return.
• The domestic environment in Russia has become more complicated, with some multinational companies experiencing asset seizures and multi-billion dollar losses.
• Returning to Russia, a medium-sized European economy, with no expectation of high oil prices, is not appealing to shareholders or boards.
• Smaller traders continue to operate, facilitating Russia's access to dual-use and sanctioned goods, but a large-scale return is unlikely.

Key Quotes:

• Alina Rakova: "It is a relationship I would say even desperation for Russia and opportunistic relationship from the side of China."
• Alina Rakova: "China is being opportunistic IC and cautious."

Technical Terms:

• BRICS: An acronym for Brazil, Russia, India, China, and South Africa, representing a grouping of emerging economies.
• Breton Woods Institutions: Refers to the World Bank and the International Monetary Fund (IMF), established after World War II to promote international financial stability and development.
• Dual-use goods: Products that can be used for both civilian and military purposes.
• Sanctioned goods: Products that are prohibited from being traded with a specific country or entity due to international sanctions.
• ICC: International Criminal Court.

Synthesis/Conclusion:

The video analyzes the dynamics of the BRICS alliance, particularly in the context of US tariff threats and the economic relationship between China and Russia. The absence of key leaders at the BRICS summit raises questions about the alliance's importance. The China-Russia partnership is characterized as opportunistic for China and driven by desperation for Russia. Western companies are unlikely to return to Russia on a large scale due to economic risks and a less favorable investment climate. The analysis emphasizes the importance of risk-reward calculations for businesses and the limited scope of Russia's economic influence on China.