Trade in BRICS? What Happens When China Stops Trading with the US and EU?

China, a major player on the world stage, is making bold moves in trade that could have far-reaching consequences, including for us in the USA. Developing countries and emerging markets now play a bigger role in China’s trade strategy than traditional heavyweights like the US and Europe, accounting for 56.7% of China’s total trade volume. This shift is driven by China’s partnerships through the Regional Comprehensive Economic Partnership (RCEP) and free trade agreements with 154 countries as part of its Belt and Road Initiative. China’s car exports have surged, making it the world’s top car exporter, with 840,000 vehicles shipped to Russia last year alone. As China strengthens ties with emerging markets, these regions have doubled their share of global trade since China joined the WTO in 2001, becoming central nodes in global value chains. China’s strategy isn’t just about trading more; it’s about trading smarter with a broader set of partners. Trade with BRICS countries (Brazil, Russia, India, and South Africa) has surged, with trade reaching trillion yuan in the first quarter of 2024. China is also expanding its BRICS circle to include Iran, the UAE, Saudi Arabia, Egypt, and Ethiopia, enhancing the economic footprint of the BRICS bloc. China’s relationship with Iran revolves around energy, while ties with the UAE span sectors like energy, technology, and infrastructure. Saudi Arabia, a key energy partner, anchors much of its bilateral trade with China in crude oil. Egypt is a strategic gateway to Africa and the Middle East, and Ethiopia sees significant Chinese investment in infrastructure. China’s trade dynamics with the EU are also shifting, with China remaining the EU’s largest goods supplier despite a 17.8% dip in imports from China in 2023. China dominates the global supply chain for heavy rare earth elements and critical minerals essential for high-tech products and clean energy technologies, underscoring the need for diversification and boosting domestic production capacities. In the US, dependence on China for critical components in sectors like EV batteries and solar cells poses a national security concern. Strengthening domestic supply chains and securing critical supply chains against potential disruptions are crucial steps to balance these challenges with global trade opportunities. #ChinaTrade #BRICSTrade #EmergingMarkets #GlobalValueChains #ChinaEconomicStrategy