(Kitco News) - The deteriorating relationship between the world’s two most populous countries is threatening to set back the BRICS currency project and undermine the bloc’s de-dollarization goals.
As Indian Prime Minister Narendra Modi prepares to host world leaders at the G20 summit in New Delhi this weekend, relations with China, which have been tense for some time, appear to have deteriorated further. Earlier this week, China announced that President Xi Jinping would not be attending the G20 and would instead send Premier Li Qiang in his place. This is the first G20 that Xi has skipped since he came to power in 2013, and no explanation for his absence was given.
Russia will now assume the chair of BRICS in the new year, and no country on Earth is more motivated to accelerate the ongoing process of de-dollarization and to follow through on the creation of a new financial infrastructure for international trade and settlement, including a new commodity-backed currency to supplant the U.S. dollar.
China and Russia also bear the dubious distinction of having two of the worst demographic profiles among all nations, which means that economic growth in the medium and long term may favor India as well. Then there’s technology, where China and Russia find themselves on the outside of Western high-tech supply chains and sharing agreements, while India has continued to align itself more closely with the United States and its allies. India’s successful moon landing during the BRICS summit, coming just days after Russia’s own spacecraft created a new crater, further highlighted what could be a growing technological divide among the BRICS members.
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