In economics, BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are

all deemed to be at a similar stage of newly advanced economic development. It is typically rendered as "the BRICs" or "the BRIC countries" or alternatively as the "Big Four". The acronym was coined by Jim O'Neill in a 2001 paper entitled "Building Better Global Economic [1][2][3] BRICs". The acronym has come into widespread use as a symbol of the shift in global economic power away from the developed G7 economies towards the developing world.

Summit Participant Date

Host country Host leader

Location

1st

BRIC

June 16, 2009 Russia

Dmitry Medvedev

Yekaterinburg

2nd

BRIC

April 16, 2010 Brazil

Luiz Incio Lula da Silva Braslia

3rd

BRICS

April 14, 2011 China

Hu Jintao

Sanya

4th

BRICS

2012

India

Manmohan Singh

New Delhi

STRONG ECONOMIC RECOVERY Though in different patterns of growth, BRICS countries -- Brazil, Russia, India, China and South Africa -- have been heralding the recovery of the world economy since the financial crisis broke out in 2008. Facing the severe impact of the global financial crisis, all BRICS countries have taken a series of economic stimulus measures to heal the wounds. China for example, took a proactive fiscal policy and a moderately easy monetary policy to cope with the crisis. The government invested heavily in the country's industry, encouraged domestic consumption to fill the gap of the shortfall of exports, thus curbing the decline of economic growth within a short period of time and enabling the economy to return to the normal pace of growth. After a rise of 9.2 percent in 2009, China's economy grew 10.3 percent in 2010, and is expected to increase 8 percent this year. The World Trade Organization said China stimulated global demand during the financial crisis, and helped stabilize the world economy. The 2009-2010 fiscal year for India was a year of gradually getting rid of the negative influence of the crisis thanks to heavy government spending. Thus the following fiscal year would be time for India's economy to stabilize and grow at a faster pace.

According to India's official estimates, the country's economy is expected to grow 8.6 percent during the fiscal year of 2010-2011, and 9 percent in the fiscal year that follows. India's favorable demographics with over 30 percent of its population below age 15 and a comparatively higher intellectual level look set to support the country's consumption and economic growth in the long run. The Brazilian economy rebounded robustly in 2010 with a 7.5-percent growth thanks to strong domestic demand and heavy government investment. For the first time Brazil's GDP has exceeded 2 trillion U.S. dollars. If calculated by purchasing power, Brazil has surpassed France and Britain to become the seventh largest economy in the world. The country's economy is expected to grow 4.5 percent in 2011. After steep recession in 2009, Russia's moderately-paced economic recovery gained momentum in 2010 with a GDP growth of 4 percent. Recovery in oil prices and fiscal policy stimulus have pushed growth to stable levels, although droughts fueled inflation in the second half of 2010. The 2011 growth is expected to be 4.2 percent. Affected by the financial crisis, South Africa, a new member of BRICS, suffered economic recession for the first time in 17 years. However, its economy picked up in 2010, with a large increase of output value in agriculture, mining industry, and manufacturing. Domestic consumption had become the major force of South Africa's economic recovery. Its GDP rose by 2.8 percent in 2010. The central bank estimates South Africa's economic growth in 2011 and 2012 would reach 3.7 percent and 3.9 percent respectively. REINING INFLATION AND REDUCING DEFICIT The accommodative monetary policy adopted by the world's major economies during the financial crisis has largely increased global liquidity, leading to asset bubbles and pressure of imported inflation. Developing countries' expansive monetary and fiscal policies have also pushed up inflation and fiscal deficit. The latest political unrest in Middle East and North Africa as well as Japan's earthquake and the nuclear crisis have also pushed the prices of large commodities such as oil to high levels. To avoid hard-landing of the economy, some emerging economies including the BRICS countries are gradually withdrawing from their stimulus policies and starting to take measures to curb inflation and reduce fiscal deficit. Affected by imported inflation and home-grown inflation, China currently faces severe inflation with the CPI in January and February 2011both reaching 4.9 percent compared to the same periods last year. The People's Bank of China decided to increase the one-year benchmark interest rates for savings and loans by 0.25 percentage point starting from April 6.

The Chinese central bank had already raised interest rates several times this year, in a bid to rein in inflation. The government said it would implement a prudent monetary policy this year and set a CPI ceiling at 4 percent. Russia faces fiscal deficit and inflation at the same time. The fiscal deficit of the federal government in 2010 reached 1.795 trillion rubles, or about 63 billion U.S. dollars, accounting for 3.9 percent of the country's GDP. However, the Russian Finance Ministry estimated that as oil prices surge in the international market, oil-rich Russia's deficit would drop to less than 2 percent of its GDP this year. According to Russia's Economic Development Ministry, the inflation rate would reach 7 percent to 8 percent this year. The CPI within the first two months of this year has risen 3.2 percent, mainly as a result of rising food prices. In February 2011, the Russian government released grain reserves to the market to tame the surging food prices. The Russian central bank also increased annual interest rate for refinancing by 0.25 percentage point to moderately tighten credit. The excessive appreciation of its currency, the real, and rising inflation have posed danger to Brazil's economic development. Brazilian central bank's figures show the real has appreciated 45 percent against the U.S. dollar since 2010 due to excessive inflow of foreign currencies. The inflation rate in the past 12 months till this February has also reached 6 percent. The Brazilian central bank has thus set new regulations to control the speculation of foreign currencies and twice increased benchmark interest rates so far this year. The Brazilian government aims to cut this year's fiscal budget by 50 billion reais (about 29 billion U.S. dollars), lowering the fiscal deficit to the level of 2 percent of the GDP. For the fast growing Indian economy, inflation is its most dangerous enemy. Affected by the sharp rise of food prices, the wholesale price index surged almost 11 percent in 2010, and current inflation rate is above 8 percent, triggering angry demonstrations. To fight inflation, the Indian central bank has raised key interest rates eight times since March 2010. The government has also vigorously reorganized finance, and has lowered deficit to 5.1 percent of the GDP. It is expected that the rate would further fall to 4.6 percent in the 2011-2012 fiscal year. ECONOMIC STRUCTURAL SHIFT The global financial crisis has triggered widespread reflection on the former economic development mode not only in developed countries, but also among BRICS countries. They realized the unsustainability of their past development paths, and started to restructure their economies.

China for instance, is entering a new phase in its development: a structural shift from an export- and investment-led economy to one driven by domestic consumption. According to Nick Timberlake, an analyst with the HSBC, the Chinese government has both the tools (policy flexibility) and raw materials (abundant liquidity) to enact this structural shift. Property tightening measures, healthcare reforms, low-cost housing programs and continued transportation spending are key to the government's efforts, he said. In addition, weak global demand and rising wage demands are pushing the country to move away from the exportdriven model that features low added value. According to the freshly released 12th five-year plan, the forecast of China's economic growth in the next five years is an average of 7 percent, with a focus on quality and benefit of the development. The GDP is expected to exceed 55 trillion RMB (about 8.4 trillion U.S. dollars) by 2015. In Russia, heavy reliance on energy and raw material exports makes its economy vulnerable to outside risks. The Russian government is speeding up structural reforms and investing heavily on high-tech and innovative programs such as energy-saving, aerospace, nuclear energy and medicine to cultivate new industries to drive economic growth. India benefits from the flourishing IT and service sectors, yet poor hardware and infrastructure hamper its further development. The large rich-poor gap and widespread corruption are also the government's headaches. The Indian government has been introducing a series of supportive measures to make better use of its demographic dividend to further develop manufacturing, and is planning to introduce more favorable polices for foreign investment. Brazil's economy has been relying heavily on bulk commodities, but now it's trying to shift its focus on exports of commodities and services with high added value. The government is pushing the speeding-up of industrial technological innovation, opening up the market, encouraging competition, and improving infrastructure. South Africa puts manufacturing, infrastructure and clean energy as the focus of development, and expects to increase employment through a more equal and reasonable growth. South African President Jacob Zuma said early this year in his state-of -the-nation address that the government sets a goal of creating 5 million jobs by 2020, by establishing an employment fund and investing 9 billion rand (1.33 billion dollars) to assist employment, and providing 20 billion rand (about 2.94 billion dollars) worth of tax cuts to encourage manufacturing. COOPERATION CHALLENGES

The people in BRICS nations account for 40 percent of the world's population, and their combined GDP accounts for 15 percent of the world's total. Along with their respectively robust economic growth and quick recovery, economic cooperation and trade among the BRICS countries have also been surging. Trade for BRICS has shot up with an average annual growth rate of 28 percent from 2001 to 2010, with the total volume of trade among BRICS countries reaching 230 billion U.S. dollars in 2010. China is currently the biggest trading partner of Brazil and South Africa, and a major partner of India and Russia. In 2010, trade between China and the other four countries exceeded 180 billion U.S. dollars, up 40 percent from the previous year. Cooperation among BRICS has also been expanded to areas such as agriculture, energy, and science and technology. BRICS countries enjoy relatively complementary economies, which paves the way for even more cooperation. Russia is called "the world's gas station" with rich oil and gas resources. Brazil is named "the world's raw material base" abounding in soybean and iron ore, while China is dubbed "the world's factory" with a strong manufacturing sector, and India is claimed as "the world's office" for its highly professional employees in IT and service sectors. As a result, Brazil and Russia can provide raw materials to China and India, while the latter two can provide good services and products to the former two. Although still a relatively small economy, South Africa is the biggest and most influential economy in Africa. Its joining builds a bridge for the BRICS countries and the African continent, opening new markets for both parties. However, cooperation among BRICS is never easy. Among opportunities and trust there are also competition and suspicion. Both as Asia's emerging economies, China and India compete for the world market and strategic resources. As both natural resources exporters, Russia and Brazil face similar competition. There are also territorial and political disagreements among BRICS countries. However, as the new force of emerging countries, the BRICS nations are obliged to speak in one voice on behalf of developing countries on many major international issues, such as global security, anti-terrorism, climate change, aerospace, economy and energy.

How to deal with their differences and cooperate as best as they can test the BRICS nations' wisdom and courage. STRONG ECONOMIC RECOVERY Though in different patterns of growth, BRICS countries -- Brazil, Russia, India, China and South Africa -- have been heralding the recovery of the world economy since the financial crisis broke out in 2008. Facing the severe impact of the global financial crisis, all BRICS countries have taken a series of economic stimulus measures to heal the wounds. China for example, took a proactive fiscal policy and a moderately easy monetary policy to cope with the crisis. The government invested heavily in the country's industry, encouraged domestic consumption to fill the gap of the shortfall of exports, thus curbing the decline of economic growth within a short period of time and enabling the economy to return to the normal pace of growth. After a rise of 9.2 percent in 2009, China's economy grew 10.3 percent in 2010, and is expected to increase 8 percent this year. The World Trade Organization said China stimulated global demand during the financial crisis, and helped stabilize the world economy. The 2009-2010 fiscal year for India was a year of gradually getting rid of the negative influence of the crisis thanks to heavy government spending. Thus the following fiscal year would be time for India's economy to stabilize and grow at a faster pace. According to India's official estimates, the country's economy is expected to grow 8.6 percent during the fiscal year of 2010-2011, and 9 percent in the fiscal year that follows. India's favorable demographics with over 30 percent of its population below age 15 and a comparatively higher intellectual level look set to support the country's consumption and economic growth in the long run. The Brazilian economy rebounded robustly in 2010 with a 7.5-percent growth thanks to strong domestic demand and heavy government investment. For the first time Brazil's GDP has exceeded 2 trillion U.S. dollars. If calculated by purchasing power, Brazil has surpassed France and Britain to become the seventh largest economy in the world. The country's economy is expected to grow 4.5 percent in 2011. After steep recession in 2009, Russia's moderately-paced economic recovery gained momentum in 2010 with a GDP growth of 4 percent. Recovery in oil prices and fiscal policy stimulus have pushed growth to stable levels, although droughts fueled inflation in the second half of 2010. The 2011 growth is expected to be 4.2 percent.

Affected by the financial crisis, South Africa, a new member of BRICS, suffered economic recession for the first time in 17 years. However, its economy picked up in 2010, with a large increase of output value in agriculture, mining industry, and manufacturing. Domestic consumption had become the major force of South Africa's economic recovery. Its GDP rose by 2.8 percent in 2010. The central bank estimates South Africa's economic growth in 2011 and 2012 would reach 3.7 percent and 3.9 percent respectively. REINING INFLATION AND REDUCING DEFICIT The accommodative monetary policy adopted by the world's major economies during the financial crisis has largely increased global liquidity, leading to asset bubbles and pressure of imported inflation. Developing countries' expansive monetary and fiscal policies have also pushed up inflation and fiscal deficit. The latest political unrest in Middle East and North Africa as well as Japan's earthquake and the nuclear crisis have also pushed the prices of large commodities such as oil to high levels. To avoid hard-landing of the economy, some emerging economies including the BRICS countries are gradually withdrawing from their stimulus policies and starting to take measures to curb inflation and reduce fiscal deficit. Affected by imported inflation and home-grown inflation, China currently faces severe inflation with the CPI in January and February 2011both reaching 4.9 percent compared to the same periods last year. The People's Bank of China decided to increase the one-year benchmark interest rates for savings and loans by 0.25 percentage point starting from April 6. The Chinese central bank had already raised interest rates several times this year, in a bid to rein in inflation. The government said it would implement a prudent monetary policy this year and set a CPI ceiling at 4 percent. Russia faces fiscal deficit and inflation at the same time. The fiscal deficit of the federal government in 2010 reached 1.795 trillion rubles, or about 63 billion U.S. dollars, accounting for 3.9 percent of the country's GDP. However, the Russian Finance Ministry estimated that as oil prices surge in the international market, oil-rich Russia's deficit would drop to less than 2 percent of its GDP this year. According to Russia's Economic Development Ministry, the inflation rate would reach 7 percent to 8 percent this year. The CPI within the first two months of this year has risen 3.2 percent, mainly as a result of rising food prices. In February 2011, the Russian government released grain reserves to the market to tame the surging food prices. The Russian central bank also increased annual interest rate for refinancing by 0.25 percentage point to moderately tighten credit.

The excessive appreciation of its currency, the real, and rising inflation have posed danger to Brazil's economic development. Brazilian central bank's figures show the real has appreciated 45 percent against the U.S. dollar since 2010 due to excessive inflow of foreign currencies. The inflation rate in the past 12 months till this February has also reached 6 percent. The Brazilian central bank has thus set new regulations to control the speculation of foreign currencies and twice increased benchmark interest rates so far this year. The Brazilian government aims to cut this year's fiscal budget by 50 billion reais (about 29 billion U.S. dollars), lowering the fiscal deficit to the level of 2 percent of the GDP. For the fast growing Indian economy, inflation is its most dangerous enemy. Affected by the sharp rise of food prices, the wholesale price index surged almost 11 percent in 2010, and current inflation rate is above 8 percent, triggering angry demonstrations. To fight inflation, the Indian central bank has raised key interest rates eight times since March 2010. The government has also vigorously reorganized finance, and has lowered deficit to 5.1 percent of the GDP. It is expected that the rate would further fall to 4.6 percent in the 2011-2012 fiscal year. ECONOMIC STRUCTURAL SHIFT The global financial crisis has triggered widespread reflection on the former economic development mode not only in developed countries, but also among BRICS countries. They realized the unsustainability of their past development paths, and started to restructure their economies. China for instance, is entering a new phase in its development: a structural shift from an export- and investment-led economy to one driven by domestic consumption. According to Nick Timberlake, an analyst with the HSBC, the Chinese government has both the tools (policy flexibility) and raw materials (abundant liquidity) to enact this structural shift. Property tightening measures, healthcare reforms, low-cost housing programs and continued transportation spending are key to the government's efforts, he said. In addition, weak global demand and rising wage demands are pushing the country to move away from the exportdriven model that features low added value. According to the freshly released 12th five-year plan, the forecast of China's economic growth in the next five years is an average of 7 percent, with a focus on quality and benefit of the development. The GDP is expected to exceed 55 trillion RMB (about 8.4 trillion U.S. dollars) by 2015. In Russia, heavy reliance on energy and raw material exports makes its economy vulnerable to outside risks. The Russian government is speeding up structural reforms and investing

heavily on high-tech and innovative programs such as energy-saving, aerospace, nuclear energy and medicine to cultivate new industries to drive economic growth. India benefits from the flourishing IT and service sectors, yet poor hardware and infrastructure hamper its further development. The large rich-poor gap and widespread corruption are also the government's headaches. The Indian government has been introducing a series of supportive measures to make better use of its demographic dividend to further develop manufacturing, and is planning to introduce more favorable polices for foreign investment. Brazil's economy has been relying heavily on bulk commodities, but now it's trying to shift its focus on exports of commodities and services with high added value. The government is pushing the speeding-up of industrial technological innovation, opening up the market, encouraging competition, and improving infrastructure. South Africa puts manufacturing, infrastructure and clean energy as the focus of development, and expects to increase employment through a more equal and reasonable growth. South African President Jacob Zuma said early this year in his state-of -the-nation address that the government sets a goal of creating 5 million jobs by 2020, by establishing an employment fund and investing 9 billion rand (1.33 billion dollars) to assist employment, and providing 20 billion rand (about 2.94 billion dollars) worth of tax cuts to encourage manufacturing. COOPERATION CHALLENGES The people in BRICS nations account for 40 percent of the world's population, and their combined GDP accounts for 15 percent of the world's total. Along with their respectively robust economic growth and quick recovery, economic cooperation and trade among the BRICS countries have also been surging. Trade for BRICS has shot up with an average annual growth rate of 28 percent from 2001 to 2010, with the total volume of trade among BRICS countries reaching 230 billion U.S. dollars in 2010. China is currently the biggest trading partner of Brazil and South Africa, and a major partner of India and Russia. In 2010, trade between China and the other four countries exceeded 180 billion U.S. dollars, up 40 percent from the previous year. Cooperation among BRICS has also been expanded to areas such as agriculture, energy, and science and technology.

BRICS countries enjoy relatively complementary economies, which paves the way for even more cooperation. Russia is called "the world's gas station" with rich oil and gas resources. Brazil is named "the world's raw material base" abounding in soybean and iron ore, while China is dubbed "the world's factory" with a strong manufacturing sector, and India is claimed as "the world's office" for its highly professional employees in IT and service sectors. As a result, Brazil and Russia can provide raw materials to China and India, while the latter two can provide good services and products to the former two. Although still a relatively small economy, South Africa is the biggest and most influential economy in Africa. Its joining builds a bridge for the BRICS countries and the African continent, opening new markets for both parties. However, cooperation among BRICS is never easy. Among opportunities and trust there are also competition and suspicion. Both as Asia's emerging economies, China and India compete for the world market and strategic resources. As both natural resources exporters, Russia and Brazil face similar competition. There are also territorial and political disagreements among BRICS countries. However, as the new force of emerging countries, the BRICS nations are obliged to speak in one voice on behalf of developing countries on many major international issues, such as global security, anti-terrorism, climate change, aerospace, economy and energy. How to deal with their differences and cooperate as best as they can test the BRICS nations' wisdom and courage.