China Research

A discussion forum on emerging markets, mainly China – from a macro, micro, institutional and corporate angle.

SCO – another example of Chinese long-term strategy

September 3, 2025

The Shanghai Cooperation Organisation (SCO) belongs to the international conventions that are hardly known in our part of the world. Though having been founded already in 2001, not very much has been reported from the 24 Heads of State Council meetings before the 25th SCO convention that took place recently in Tinjian.  The SCO Tianjin Summit 2025 has probably been the most important of its kind so far, due to the list of prominent participants and the burning international conflicts.

Long-term aspects more important than short-term results

Shanghai Cooperation Organization (SCO), is an intergovernmental organization that has been started in 2001 by China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan aiming at peace and cooperation among its member states with the intention to promote what then was called a new fair political and economic order. Later on, also India, Pakistan and Iran joined the organization.

Totally, the SCO also includes quite a number of observer states from the Eurasian region. Around half of the global population is represented in the SCO which considers itself as an alternative to corresponding Western organizations .

According to the SCO, its main goals are defined as follows:

#  “to strengthen mutual trust, friendship and good-neighborliness between the Member States;

#  to encourage the effective cooperation between the Member States in such spheres as politics, trade, economy, science and technology, culture, education, energy, transport, tourism, environmental protection, etc;

#  to jointly ensure and maintain peace, security and stability in the region; and

# to promote a new democratic, fair and rational international political and economic international order”.

When reading these points above, one can easily observe their general and unbinding character – whatever this may mean. But now more co-operation among the member countries seems to be strived. This would allow China – the strongest member of the SCO – to pave the way for the continued development of the SCO (see https://www.chinadailyhk.com/hk/article/618965), certainly in line with its international long-term strategy. A parallel long-term strategy of this kind is also visible in other parts of the globe, for example in Africa, South America and the Pacific area. Russia’s role in the SCO seems to remain limited compared to China’s dominant position. India’s future impact on the SCO still appears unclear but closer relations to China seem to be on the cards. Trump’s tariffs could favor such a development even more than so far.    

Conclusion: China’s interest in the future of the SCO underlines again its long-term ambitions in the world – for reasons of political influence, new markets for its exports and the future supply with important commodities. By looking somewhat deeper into the SCO, we have got another example of China’s unique capacity to apply both short-term and long-term perspectives at the same time. A phenomenon that uses to come back regularly and that often is neglected in Western countries and companies..

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University

BRICS countries in trouble

August 15, 2025

Originally, BRIC was started as a financial investment idea in promising emerging markets. In other words, BRIC was in the beginning a financial construction for investing in well-growing emerging markets. B stood for Brazil, R for Russia, I for India and C for China. Later, also South Africa – representing the S in BRICS – was enabled to join.

New conditions

What initially seemed to be an interesting innovation, has in the meanwhile developed into a completely different and in many (financial) aspects into a financially obsolete product.

Growth and other economic conditions have changed profoundly since the start of BRICS. Chinese growth has been slowing down considerably, Russia suffers from burdening war effects, Brazil is economically unstable though recently improving somewhat and India, on the other hand, has more strongly moved in the right direction.

In other words: We have seen that the BRIC(S) countries did not have a homogeneous development in recent years. Rather the opposite – but not as a positive contribution in a diversification sense.   

More lately, BRICS countries have also suffered from President Trump’s tariffs and increasing global uncertainty about particularly emerging markets. These tendencies should lead to the question what may happen to BRICS in the future. Will BRICS recover as an important but not very powerful group of emerging markets or move into a different direction with China as an increasingly active driving force, favoring its own political interest and influence?

Conclusion:  My own guess is that the latter alternative seems to be the most probable one since China already since a number of years ago has demonstrated an increasing strategic political interest in modernizing emerging and less developed countries. These countries may be particularly relevant when they can provide China with important commodities.

We know by now that Chinese decision makers are excellent strategist both when it comes to short-term and long-term strategies.

BRICS fits well into this specific context.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University

BRICS II – another BRICK in China’s global strategy

August 31, 2023

We recently noticed the BRICS summit in South Africa. Expectations in our part of the world were not hopeful before the summit in a sense that decisions from Johannesburg would mean an encouraging injection for the global economy. However, it was recognizable that China managed to launch another brick in its global political economic strategy by establishing its de facto leadership for the new and enlarged BRICS II organization.

Democracy clearly underrepresented …

I have been watching BRIC(S) from its start in the early days of this century – i.e. before South Africa was invited to join – as quite an unnecessary organization. BRIC(S) was initially launched as a smart financial marketing idea of an American investment bank without any other logical unifying argument than putting together Brazil, Russia, India and China as the four largest emerging markets with – then – potentially good economic prospects.

Then, two of these four founding countries were not democratic (China -and at least partly – Russia), and two others could be described as democratic (India and Brazil, plus joining South Africa some years later).

Now, when BRICS II will come into force in a few months time, this previously quite balanced democratic participation in BRICS will not be maintained when the six invited new members will become part of BRICS II as well.

These six new BRICS countries are:

Iran, Saudi Arabia, United Arab Emirates (UAE), Egypt, Ethiopia and Argentina.

It is indeed very obvious that none of these invited six countries can offer democratic standards and/or economic strength. There is all reason to believe that democracy in the new BRICS II will become clearly underrepresented.

… and weak economies totally overrepresented

Another angle may be a pure economic one. Also in this context there is nothing encouraging to find – apart from currently more or less healthy macroeconomic stability in India, Brazil and the oil producers of Saudi Arabia and UAE.

So what can the 11-nation BRICS II finally offer themselves and the rest of the world? In my view not very much. There are too many internal imbalances.  May be some increase of intra-trade (mainly for oil and other commodities) could show up. An obvious disadvantage is the missing positive homogeneity between the countries.

However, one more aspect still remains to be considered in the BRICS II context: China’s global political and trade economic strategy with BRICS II as perfect tool.

Application of the old and new Chinese diversification efforts

As I have written before in this blog, China has been starting to work more ambitiously on its intensified and revised geopolitical strategy. I have followed China’s internationalization and globalization for many years and have to admit that China since the start of the opening-up reform policy by the prominent reformer Deng Xiaoping had a logical strategy in their search for enlarged international partnership through all the years.

The international reform steps in the opening-up context were during the years about FDI and more foreign investment in China, the move of Western labor force (experts) to China, increasing exchange of students with abroad both from and to China, mutual cooperation in research –> altogether different steps to improve skills, technology, products and productivity with ideas from outside China. So far about the traditional diversification objectives.

Gradually after China’s important WTO entry, Chinese political leaders also announced objectives for developing China into a technological superpower and for increasing its global political power, more lately very much by focusing on (emerging) countries that appreciate incoming Chinese investments and (expensive) financial support (https://blogg.lnu.se/china-research/?paged=3, from February 17, 2023). Thus, we also have some examples of China’s modern diversification strategy, happening to a high extent geographically.

When summing up some international/global organizations below with obvious strategic interest, you can find some obvious examples where China already is or will become the dominant player, such as:

BRICS II – certainly an organization ready for increasing Chinese influence

Belt & Road Initiative (BRI) – infrastructure projects, fully led by China

RCEP (The Regional Comprehensive Economic Partnership RCEP) includes 14/15 East Asian and Pacific nations working for free trade among each others in a longer perspective (without having the U.S. in the organization). It is quite easy to imagine that China at some point will become more active within RCEP as well.

Looking at these examples clarifies well that China wants to expand its global influence. This will happen via bilateral action or via international organizations. Strengthened global platforms will become even more important to President Xi Jinping and the CP, since China nowadays domestically performs insufficiently after many years of boom.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
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