In an intriguing diplomatic overture, China’s Vice Commerce Minister, Wang Shouwen, extended a noteworthy invitation to India, welcoming its inclusion in the Regional Comprehensive Economic Partnership (RCEP). During a discourse at the ‘Business 20 summit’ of G20 nations in New Delhi, Shouwen emphasized that participation in RCEP could substantially catalyze burgeoning trade ties between the two swiftly ascending economies.
The RCEP, the world’s preeminent trade conglomerate orchestrated by China, encompasses an alliance of 15 Asia-Pacific economies, including powerhouses such as Australia, Japan, New Zealand, and an assemblage of 10 ASEAN member-states. Against a backdrop of prevailing geopolitical tensions, notably the border skirmishes at Ladakh in June 2020, Shouwen’s articulation of the invitation stood as a significant olive branch, perhaps hinting at the potential to recalibrate relations between the two nuclear-armed nations.
Amidst the burgeoning economic dialogue, India’s Trade Minister, Piyush Goyal, emphasized the vitality of ameliorating the trade equilibrium with China. While acknowledging the expansion of trade between the two nations, he acutely noted the prevailing skew in favor of China, thereby underlining the exigency for an equitable recalibration.
Simultaneously, Prime Minister Narendra Modi’s strategic conversations with China’s President, Xi Jinping, during the BRICS summit in Johannesburg, unveiled concerted efforts to address long-standing border disputes and disengage from tensions. Xi’s conciliatory tone, encapsulated by China’s official news agency Xinhua, accentuated the confluence of mutual interest, fostering peace, stability, and development.
Contemplating the expanded BRICS sphere, economic pundits remain circumspect about the universal dividends it might yield. While Saudi Arabia, UAE, Iran, Argentina, Ethiopia, and Egypt step into the fold, observers express mixed sentiments regarding their potential to galvanize economic rejuvenation within the bloc. The rationale echoes the complexities of the entrants’ economic profiles, ranging from petroleum affluence to economic straits, compelling speculation about the actual transformative impact of the expansion.
Some industry mavens cast a skeptical gaze on the prospects of heightened foreign direct investment (FDI) resultant from this structural expansion. The very proposition of a richer investment landscape for the newly admitted nations is met with cautious skepticism, as investors weigh the overall attractiveness of these economies.
Nonetheless, proponents and economic analysts underscore the amplified economic resonance emanating from the expansion. The incorporated nations are poised to augment the bloc’s global GDP share to 29%, a substantial leap from the current 26%, alongside a parallel elevation of goods trade to 21% from 18%. Opinions on whether this can be characterized as a “game-changer” may vary, but the emphasis on consumer market access and its resultant scale underscores the transformative potential.