- The emerging world’s ascent has not abated. Last year, emerging markets collective GDP increased by 7.4% to USD29.1 trillion (tr), compared to G7 combined output of USD33tr. Just five years ago, the G7’s output was twice the size of emerging markets’ output.
- Despite sluggish global growth, the BRICS have been relatively successful in avoiding sharp moderations in export growth. In real terms, exports from the BRICS surged by 16% in 2010, and 4.4% in 2012. BRICS-world trade amounted to an estimated USD5.6tr in 2012, making up nearly 16% of total global trade - up from 10% in 2008.
- The BRICS have turned to emerging markets to offset weak demand in advanced economies. Last year, more than half of all exports from China, India and Brazil, and 48% from South Africa, were destined for emerging markets.
- Aligned to these shifts, intra-BRICS trade has swelled. In 2012, we estimate intra-BRICS trade reached USD310 billion (bn), up eleven-fold since 2002. Today, intra-BRICS trade accounts for almost one-fifth of BRICS total trade with emerging markets, up from just 13% in 2008. In contrast, the BRICS actually traded less with the EU last year than they did in 2008.
- The leap in importance of the BRICS has been most pronounced for South Africa. A decade ago trade with the BRIC economies accounted for just 5% of South Africa’s total trade with the world. In 2012, this figure stood at 19%. Last year, South Africa’s exports to its fellow BRICS economies increased by almost 17%.
- Intra-BRICS convergence is being led by China. China acts as a counterparty in 85% of intra-BRICS trade flows. For each of the BRICS, China ranks as a top three export destination. Context is critical in weighing these dynamics: Last year, China usurped the United States to become the world’s largest trader, and China accounts for 55% of total BRICS GDP.
- Significantly, the BRICS trade more with Africa than they do amongst themselves. We estimate that BRICS total trade with Africa reached USD340bn in 2012, representing a more than ten-fold increase over the course of a decade. Since 2007, during a period of relatively slow trade growth (for Africa, the BRICS and globally), BRICS-Africa has more than doubled.
- South Africa punches above its weight within BRICS-Africa trade. Though accounting for just 2.5% of BRICS GDP, South Africa is responsible for 11% of BRICS-Africa trade. In 2012, South Africa-Africa trade was 35% greater than Brazil-Africa trade and 200% greater than Russia-Africa trade.
- Looking ahead, we hold firm to our widely-cited projection that BRIC-Africa trade will eclipse USD500bn by 2015, roughly 60% of which (USD300bn) will consist of China-Africa trade.
This is the Introduction to: BRICS trade is flourishing, and Africa remains a pivot, by Jeremy Stevens and Simon Freemantle, published by the Standard Bank Research Department, February 2013, via the South African Foreign Policy Initiative.
The seven page Standard Bank report can be accessed here.