BRICS in 2025

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A global technological revolution is under way, with China at the helm. China’s leaders call it the mobilization of “new quality productive forces,” referring to “great changes unseen in a century.” In the increasingly hamstrung West, each headline-grabbing advance is read as another “Sputnik moment,” giving rise to fresh anxieties and the push for an ambitious policy response. Such was the case with DeepSeek—a phenomenally efficient and open-source large language model that sucked trillions out of the Wall Street AI bubble—and the Chinese probe that brought back to Earth the first samples of the far side of the moon, in the process accelerating  the space race on militarized satellites with significant implications for the US in the Indo-Pacific.

Then there is the ongoing Build Your Dreams moment. BYD, China’s leading EV maker leapt out of its home market in a stunning international expansion, threatening the future of European political coalitions grown up around the internal combustion engine and prompting new waves of anxiety among Western policymakers and captains of industry. China’s dramatic surge of investment into the “new three”—EVs, batteries, and solar—is expected to crush oil demand by 5 million barrels a day by 2030. That cheaper green tech is now enabling a hundred plus countries to break free from expensive imported hydrocarbons towards the sunlit uplands of electric self-sufficiency.

China’s package of automation, digitalization, and electrification offers firms and nations not just carbon-reduction but also—more persuasively—productivity, efficiency, and energy sovereignty. The material basis of the global production, consumption and information systems are being remade. One doesn’t have to be a Marxist to think that will imply a radical transformation in global politics.

Where will the next Sputnik moment come from? Experts list automated factories, biotechnology and biomedicine, small modular nuclear reactors, drones, sodium ion batteries, and AI processing chips.

This Chinese predominance in technology is causing what Adam Tooze has termed the “second China shock”. If the first was when China was incorporated into Western and East Asian supply chains, the second runs in reverse: the West, particularly in Europe and particularly around EVs, is looking to be incorporated into theirs. For the first time in two centuries, the West is no longer the leader in future technology, but the follower. It’s in this context that American allies in Europe and East Asia are now beginning to break away from an aggressively transactional US that is trailing in lead technologies. 

These developments are reshaping the global order and the multi- and bilateral relationships that undergird it. All of the tensions of the moment will be on display at the BRICS forum of middle-income countries that will meet next week in Brasilia. In the last two years, BRICS has doubled its original members to include five new countries—the UAE, Egypt, Ethiopia, Indonesia, and Iran. Under Brazil’s presidency, this year’s forum will focus on green industrialization, climate finance, and sustainable governance. In contrast to BRICS’ original mission of challenging Western institutions, the bloc is now characterized in part by its members’ ambition to strategically insulate from the US, and contains within it a new vision of high-tech sovereignty, powered mostly by clean energy. 

While the West sees BRICS as an anti-western bloc quixotically dedollarizing, the bloc is now held together less by repulsion to an old order than by attraction to the remaking of the material basis of a new sovereignty in a new era of globalization.

Hype and reform

In 2001, the heyday of US-led financial globalization, Goldman Sachs’s Jim O’Neill coined a catchy acronym—BRIC—for a Wall Street emerging markets investment thesis. Brazil, Russia, India and China (South Africa wouldn’t join until 2010) were identified as rapidly growing economies, both in terms of productivity and in terms of currency appreciation. Combined with country-specific data on population, infrastructure, and investment, O’Neill suggested that India’s GDP would eclipse Japan’s by 2032, and that China would be the world’s biggest economy by 2041. These developments, the Goldman analysts speculated, would have ramifications for global investment portfolios and force a change in the West’s dominant position.

The BRIC forum was formally established in Russia in 2009. It was in part intended to design a response to the 2008 crash that would allow its four member states to insulate from the shockwaves wrought by the financial crisis. Beyond that, members had a common goal of reforming global governance, redistributing voting rights in the IMF and World Bank, improving South–South trade, and expanding local currency settlement.

In 2014, BRICS—with South Africa now a member—launched institutions to mimic those created at Bretton Woods. The New Development Bank was to provide development finance a la World Bank, and the Contingent Reserve Arrangement was to give liquidity without onerous IMF-style conditionalities. These new institutions, however, remained limited in scope and scale, insofar as they were constrained by strategic differences between the BRICS members, and there was little for the West to feel threatened by. The New Development Bank’s loan book is small relative to its paid-in capital and the Contingent Reserve Arrangement relies on IMF decisions for much of the funding it offers.

The tone shifted, however, after 2020, when the US and the EU united around Biden’s agenda of confrontation with China and Russia. In 2022 Western powers jointly imposed Russian financial sanctions after the invasion of Ukraine, and aligned on blockades of advanced technology into China. Although Europe balked at the US’s aggressive “decoupling” from China and opted instead for gradual “derisking,” both sides of the Atlantic had become united in their assumption that BRICS was an anti-Western coalition.

As a result of the war, BRICS itself became necessarily more focused on geopolitics than global governance, pivoting to strategic nonalignment for trade and investments. Significantly, Russia put de-dollarization into the bloc’s 2023–2024 agenda. But dollar dependence for the bloc as a whole was hard to escape. The BRICS development bank stopped doing business in Russia in 2022 because none of the other members wanted to lose access to dollar funding banks.

Diversify, dedollarize, decarbonize

With Trump’s reelection, the unity of purpose shared by the EU and the US has begun to crack. Centrist EU leaders now declare that the US is an “enemy of the European project,” and many European countries are pursuing similar goals as some countries in the South. The aim is to reduce exposure to the US and even create a new set of institutions to help enhance sovereignty and counteract the destabilization of trade wars, torn up security arrangements, and an increasingly weaponized dollar system.

With the north Atlantic bloc under such duress, interest in BRICS is on the rise. Western legitimacy, moreover, lies buried in the rubble of Gaza. New and aspiring joiners to the club have a mix of motivations, as chronicled by the Carnegie Endowment thinktank. For Egypt, which has struggled with dollar shortages and IMF programs for years, transactions in local currencies are attractive. For Indonesia, diversification of trade and diplomatic ties is a show of its long standing non-alignment policy. Nigeria, meanwhile, seeks economic ties with larger countries and a bigger regional role on the continent. For the UAE, the bloc is a way to further its regional influence. Saudi Arabia (invited but not yet accepted) has a similar view. According to Layla Ali at Gulf Research Center, both countries “see the BRICS summit as a strategic platform to expand their diplomatic and economic ties on a global scale.”

Green industrial cooperation

A dramatic contest is now taking place within BRICS itself. Oil and gas rich member countries are facing a rising challenge to their growth models from BRICS economies shifting toward greener industrial policy. Those BRICS countries that historically imported large quantities of oil and gas from Russia or Iran are now faced with the rapid growth in renewables; this is the case in China, but also in Brazil, India, and South Africa. The result is that fossil fuels now account for less than half of the bloc’s total electricity generation.

This hasn’t stopped Russia and Iran from drilling more oil and gas. China’s export of manufactured clean energy generation and electrification, as well as its green tech and financing arrangements, is so far winning converts, but the final outcome remains to be seen. This implicit contest over the dominant energy mix, and the political economy built around it, will decide not just geopolitical power arrangements across the BRICS nations in the decades ahead, but the fate of most of the world’s peoples. In an effort to win this contest, China is building hegemony by exporting not just its green products but also in a structural shift exporting its technology, engineering, supply chains, and financing.  

Two recent reports by analysts—including Tim—at Clean Energy Finance and Net Zero Industrial Policy Lab spell out examples of green industrial cooperation between China and larger developing countries, while smaller countries continue to largely serve as export markets. Clean Energy Finance estimates that since the start of 2023, Chinese companies have invested over $100bn overseas across 130 clean technologies in a “clean energy tsunami.” 
Bilateral green industrial cooperation between BRICS members suggest new patterns of economic development utilising two advantages. First, member countries now possess many of the leading green technologies; second, they have fast growing domestic consumer markets providing scale and profits for industrial growth.

Brazil & China

Brazil under President Lula is making much stronger moves towards Beijing. Lula directly convinced China’s BYD to invest in a plant in the northeastern state of Bahia, which will be its first EV production hub outside Asia—projected to produce 150,000 vehicles per year. Undoubtedly Brazil’s large consumer market gave Lula negotiating leverage to exchange technology for market access. Spurred on by Lula’s Nova Industria Brasil policy, Bahia is a prime example of the global energy transition at work. Two American giants of twentieth-century industry—Ford and GE—sold their plants in Camacari to BYD and Gold Wind respectively, which are the world’s largest EV and wind turbine manufacturers. To ensure that local value-add and knowhow is created for domestic firms, Bahia’s government negotiated with BYD an R&D center and localization targets. BYD’s first “made in Brazil” car rolled out this week—just in time for the BRICS summit.

China & UAE

China and the UAE are cooperating on EVs, solar, and transition metals. The UAE’s bargaining power has increased—winning localization clauses and transfers of intellectual property—as Chinese firms are increasingly tariffed in western markets. Chinese solar firms like LONGi are building local knowledge and skills, exemplified by their solar academy in Dubai, while processing metals sourced from Brazil’s iron mining giant Vale in green steel manufacturing hubs in the Gulf Kingdom.

India & Brazil

Not every intra-BRICS collaboration involves China. Brazil and India, both with strong farmers’ coalitions in their legislatures, have focused on cooperation in sustainable biofuels. They plan to lead a Global Biofuel alliance in order to combine resources, expertise, and technology to eventually triple their joint production of biofuels for aviation, cars and shipping. The marriage combines the technological expertise of Brazil with its patents and decades-in-the-making industrial position in biofuels with India’s growing biofuel demand (now the world’s third largest consumer of ethanol) and fast growing passenger aviation.

No going back

A popular criticism of the BRICS multilateral initiatives is that they lack effectiveness: the NDB and the CRA are not large enough to do the job, “BRICS Pay” is a fantasy, and coordinated reform efforts within the Bretton Woods voting systems have proven unsuccessful.

But nevertheless, each country is pursuing strategies for dedollarization and green energy and manufacturing. BRICS is inherently about grasping and shaping a post-American world order, there are now many more nations interested in that project. Larry Summers said it best in 2023: “There’s a growing acceptance of fragmentation, and—maybe even more troubling—I think there’s a growing sense that ours may not be the best fragment to be associated with.”

A question animating many is who will own the green industries and their value chains? A recent interview with the chair of metals and mining firm Vale was telling: “’We’re a Brazilian company run out of Canada joint venturing in Indonesia with the Chinese and the Saudis have 10 per cent in us. Welcome to the next stage of the political complexity of the world we live in.” Can bilateral collaborations and Chinese technological advances add up to a systemic change, a shift in the world order? 

The postwar geopolitical order rested on three pillars: American hegemony, the fossil-fuel energy system, and an open, multilateral trading order. America has now attacked each pillar at the foundation of its hydrocarbon global order.

There are now two competing global models of energy and influence: one based on fossil fuels, one on green technologies and a new model of sustainable development. China’s technology is finding new markets around the world because lots of people want it. But there is so far no real wraparound support of finance, trade, and tech transfer—as no new international order of sustainable governance has yet been built. The critical question of the future of BRICS lies with its member countries’ willingness and ability to effect broader collaboration in the fields of technology, trade, and finance. A quarter of the way to the twenty-second century, everything is up for grabs.