In early July, the leaders of Brazil, Russia, India, China and South Africa assembled in Ufa, around 700 miles east of Moscow, for the seventh annual Brics summit.
Overshadowed by Europe’s currency imbroglio and China’s stock market nosedive – along with the usual plethora of summer sporting events – this diplomatic gathering in the Bashkirian capital deserved far more media attention than it got.
International commerce used to be dominated by flows of goods and services between the big Western economies and the developing world – with the “advanced nations” generally dictating the terms. Over recent decades, though, there’s been a surge in trade between the developing countries and emerging markets themselves, bypassing the “leading countries” altogether.
As the developing and emerging economies’ share of the global economy has surged from one-third to more than a half of global GDP over the last ten years, they’ve done increasing amounts of business with each other. Such “south-south” flows, just a few percentage points of world trade as recently as 1990, rose to a fifth by 2004 and now account for almost a third of all cross-border commerce.
Russia’s recent “pivot East” has become a geopolitical cliché. It’s now widely understood that one of the most significant consequences of sanctions imposed by America and (less enthusiastically) the European Union has been significantly to strengthen relations between Moscow and Beijing.
Enemies for much of the Cold War, Russia and China have been building serious commercial and diplomatic ties across their 2,700-mile border for well over a decade. Since 2002, their bilateral trade has grown 7-fold, to almost $100bn annually, as both sides recognize the economic synergies between the world’s largest energy exporter and the biggest and most populous manufacturer on the planet.