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Xinhua Voice: The BRICS still have potential to excel
Despite current slowed growth of some emerging economies, the BRICS countries are still considered to have the potential to bolster the global recovery.
Business and political VIPs at the ongoing World Economic Forum (WEF) in Davos, Switzerland, are expected to elaborate on what kind of role these five major emerging economies could play in sustaining the still-tardy global economic rehabilitation.
The group, which consists of Brazil, Russia, India, China and South Africa, has been playing as a dose of antidote to the hobble global economy since the start of the 2008 global financial crisis.
Facts proved that a dynamic group of major emerging countries not only strengthened cooperation among themselves, but also helped build a more constructive relationship between the developing and developed economies.
During the past few years, the BRICS countries have made tremendous contributions to the world economy by increasing employment, reducing poverty, pouring in capital, exporting and importing, among others.
Or, in other words, their economic growth in recent years compensated for the stagnation of developed countries and their currency reserves helped in the European debt crisis.
As negative perception on the future power of the BRICS economies is demoralizing some investors due to current slowdown, abundant resources could be used as a strong proof of their still-robust economy and tremendous potential.
Among the five group members, China has been the "world factory" for years, Brazil is an important "raw material base" to the global market, Russia is the world "petrol station," India is a well-known "world office," while South Africa is the resource reservoir of Africa.
The BRICS, with roughly one third of the world's total population and more than a quarter of the world's land area, had a combined nominal GDP of more than 16 trillion U.S. dollars in 2013, according to the World Economic Outlook of the International Monetary Fund (IMF).
Some sources have suggested that the BRICS economies might overtake the G7 (the United States, Japan, Germany, France, Britain, Canada and Italy) by 2027.
As a leading member of the group, the Chinese economy grew 7.7 percent in 2013, much higher than IMF's 5 percent forecast for emerging markets and developing economies as a whole.
British economist Jim O'Neill, best known for coining the "BRICS" acronym, has pointed out that China's economy was now more than half the size of the United States, which meant "if China grows by 7.5 percent ... this would be equivalent of the U.S. growing by 4 percent."
According to O'Neill's estimate, if China grows by 7.5 percent annually in the next decade, it would be an economy of around 16 trillion dollars or more by 2020, allowing its GDP per capita to reach 12,000-13,000 dollars.
In January, the IMF forecasted that China will grow 7.5 percent this year, India 5.4 percent, Russia 2.0 percent and Brazil 2.3 percent, while among advanced economies, the IMF only sees U.S. growth at 2.8 percent, euro area growth at 1.0 percent, and Japan at 1.7 percent.
The growth rate and its wealth-creating potential of China as well as other BRICS members still stand out among major economies in the world, which will remain a key engine for global economic recovery from a medium- and long-term perspective.
[Source: Xinhua, Beijing, 23Jan14]
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