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Meet shows BRIC rising importance

THE first full-fledged summit held yesterday by the leaders of China, Brazil, Russia and India, known as the BRIC countries, will accelerate cooperation among emerging markets and push forward the establishment of a new financial order in which developing countries will have more say, industry observers said.

"The summit, where leaders of the four countries made their united debut, is a landmark to illustrate the growing importance of the BRIC countries, especially when the global economic meltdown takes a toll on many nations," said Huang Renwei, vice president of the Shanghai Academy of Social Sciences.

"The gathering can at least reach some consensus on key issues, such as what kind of role the four countries should play to combat the ongoing economic crisis and the weight of the four in the world's financial system to match their contribution to the global economy," he said.

Lu Zhengwei, an economist of the Industrial Bank, said the BRIC members should upgrade their cooperation in trade and investment to counter the sharp declines in exports amid the global economic woes as they are widely expected to less impacted by the recession.

He noted Brazil and Russia can be a stable source of energy for China and India. Brazil and Russia can also tap Chinese and Indian demand to boost their economies. Brazil is rich in commodities such as iron ore and copper while Russia has huge reserves of oil and natural gas.

Lu viewed the summit as also providing a platform for the BRIC countries to deal with the problem of their heavy dependence on the United States.

"The financial crisis has cast a long-standing impact on the global monetary system," said Lu. "In the long run, it is a must for developing countries like China to cut reliance on US assets although it may take five to 10 years or even longer to shake the current US-dollar dominance."

Lu said the BRIC nations' talks on the currency issue sent a signal to the US and the world that emerging countries are seeking other options rather than relying on the dollar.

Lu's remarks were echoed by Sun Lijian, a finance professor at Fudan University.

"The world can't ignore the collective voice by the four most promising countries, which demand the developed community take its responsibility in the global financial crisis - tighten its financial supervision system and make the information disclosure process more transparent and more efficient to the rest of the world," said Sun.

Sun said a deal on the currency issue may not be made soon but the BRIC can seek closer ties in trade and investment and band together to ride out the global recession.


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