China hosts the BRICS (Brazil, Russia, India, China, and South Africa) Business Forum in Beijing today.
BRICS nations account for approximately 23% of world GDP, with China by far the largest economy. The summit comes as the Chinese economy faces significant pressure due to international supply chain issues and the ramification of its strict zero-COVID19 policy. Ensuring good public health will assist Communist Party (CCP) Chairman Xi Jinping in his re-election bid at the CCP Party Congress taking place at the end of 2022 as he has tied his legitimacy to success in managing the pandemic.
In the near-term, China is willing to sacrifice its economic performance for health concerns. The Chinese government is balancing economic prosperity with controlling the spread of the virus, partially due to the non-effectiveness of its Sinovac vaccine against the Omicron variant. The Chinese economy also faces other pressures, like the teetering default of real estate developer Evergrande, that could cause further economic shock.
Ultimately, these factors limit significant growth in China in the short to medium-term. Provided Xi Jinping is re-elected in November, China is likely to gradually loosen its zero COVID-19 policy, leading to a greater emphasis on economic growth.
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Cian is a Research Analyst and contributes to both Analysis and the Daily Brief. He specializes in Australian and European geopolitics with a particular interest in the strategic autonomy of the EU.