Russia & China's US-Provoked Payment Problems Caught Most BRICS Enthusiasts By Surprise
Authored by Andrew Korybko via Substack,
RT published a feature analysis on Friday asking, “Has the US finally succeeded in choking off Russia’s biggest trade lifeline?”, which readers are encouraged to read in full to learn more Russia and China’s US-provoked payment problems. In a nutshell, Chinese banks of all sizes have suddenly started complying with the US’ sanctions out of fear of secondary sanctions, which RT’s financial expert Henry Johnston reminded everyone has also been reported by the domestic Russian media whose articles he cites.
All of this is shocking for the average BRICS enthusiast who’s been influenced by wishful thinking articles since the start of the special operation into imagining that this group is an anti-Western bloc. They’ve also heard countless times that “the dollar is dead” or is “about to die any day now,” that Russia and China are “allies” who are jointly resisting the West in all respects, and that a new world order has already emerged to replace the previously American-led unipolar one. None of that is true though.
The dollar remains the world’s reserve currency despite the reputational damage caused by the US’ anti-Russian sanctions, Russia and China are mired in US-provoked payment problems, and multipolarity has yet to fully emerge since the legacy of America’s unipolar system is responsible for the aforesaid.
China’s complex economic-financial interdependence with the West places certain restraints on its sovereignty in this respect and was even addressed by Lavrov in an interview with RBC last week:
“Of course, everyone is now looking for those new opportunities. But the People’s Republic of China, with the size of its economy, with the volume of its trade relations with the United States and the West as a whole, is, of course, much more dependent on the West than the Russian economy was.
And I have no doubt that China will reduce this dependence and will gradually move toward those forms of communication with its partners that will not be associated with such a dictate.
But, given the Chinese mentality, the Chinese style, they do this slowly. They do not want any sudden movements. This topic is being discussed with our Chinese colleagues. They have a fairly well-developed banking system, and it is very deeply tied to global financial markets.”
To Lavrov’s credit, he addressed the elephant in the room instead of delusionally denying the problem like top Alt-Media influencers tend to do for ideological reasons, which shows BRICS enthusiasts that there’s no need to try to cover up “politically inconvenient” facts like some gatekeepers aggressively do.
The second lesson that they can learn is to emulate Johnston’s calm way of discussing sensitive disputes among strategic partners instead of exaggerating them like so-called “doomers” are infamous for doing.
Third, the reality of BRICS is finally more apparent in light of these problems: it’s a network of countries that voluntarily coordinate their policies to accelerate financial multipolarity, but whose members are limited by structural constraints and their ties with the West in terms of how far and fast they go. If it was a bloc like the average enthusiast imagines, especially an anti-Western one, then there’s no way that Chinese banks of all sizes would ever comply with the US’ anti-Russian sanctions.
The fourth lesson is that India proved more resilient to Western pressure than China. Many BRICS enthusiasts are suspicious of India’s close (but newly troubled) ties with the US, and a top Alt-Media influencer even described it as the West’s “Trojan Horse”. Sberbank’s Deputy CEO confirmed earlier this week though that “There are no restrictions on its operations” in India after it handled 70% of Russia’s $65 billion trade with that country last year, which was analyzed here. Folks should reflect on this point.
And finally, BRICS enthusiasts should incorporate what they learned from the enumerated four lessons to recalibrate their worldview so that it more accurately reflects reality. There’s no shame in being wrong about anything and it’s understandable why so many people have such high hopes about BRICS, but it’s better to be aware of the facts and temper expectations than to be unaware of them and inevitably become deeply disappointed once reality hits. Here are 12 supplementary pieces clarifying BRICS:
* 1 April 2023: “Popular Expectations About BRICS’ New Currency Project Should Be Tempered”
* 27 July 2023: “Alt-Media Is In Shock After The BRICS Bank Confirmed That It Complies With Western Sanctions”
* 3 August 2023: “Russia Is Finally Correcting False Perceptions Of BRICS”
* 17 August 2023: “BRICS Officially Confirmed That It Doesn’t Want To De-Dollarize & Isn’t Anti-Western”
* 21 August 2023: “Lavrov Explained How Russia Envisages BRICS’ Global Role”
* 24 August 2023: “BRICS’ Expansion Is Beneficial But It Also Isn’t Without Strategic Challenges”
* 28 August 2023: “RT Took Care To Clarify India’s Approach Towards BRICS In Order To Avoid Misunderstandings”
* 6 January 2024: “Bridging The Gap Between Russia & Iran’s Differing Views On Whether BRICS Requires A Secretariat”
* 9 March 2024: “BRICS Is Transforming Into A Multipolar Discussion Club & Economic Integration Platform”
* 27 August 2024: “An Indian Source Shed Light On BRICS’ Financial Multipolarity Plans”
* 2 September 2024: “Korybko To SCF’s Hugo Dionisio: You’re Right About Lula, But Wrong About BRICS & India”
* 6 September 2024: “BRICS Membership Or Lack Thereof Isn’t Actually That Big Of A Deal”
Despite the group’s challenges as proven by Russia and China’s US-provoked payment problems and no matter the limitations inherent in its activity, BRICS is still gradually reforming the financial world order in a fairer direction for the Global Majority. As Johnston concluded in his feature article, “The fading hegemon still has a few trump cards it can play with some effect – and it is playing them now. But every time it does, it brings closer the day in which those cards will be rendered obsolete.”