Almost exactly 70 years after the signing of the Bretton Woods agreement, five major emerging economies, known collectively as BRICS, have created new institutions that would initially supplement and could eventually replace the World Bank and the International Monetary Fund, which have failed to respond adequately to the needs of a changing world.
The political track of the United States-China strategic and economic dialogue held last week in Beijing was beset by bickering, such as that over China's maritime disputes and charges and countercharges over cyber espionage, with little of substance achieved. Things were different, however, on the economic track, where there was movement on negotiating a high-quality bilateral investment treaty and reduction of government intervention in the value of the Chinese currency.
While China seems to be an increasingly confident actor on the world stage, within the country, there is a serious lack of confidence in the government, with those who have thrived within the system eager to leave the country, taking their money with them.
Four years ago, China was crowned the world'ssecond largest economy, having overtaken Japan. Three months ago, the World Bank said that in purchasing power parity terms, China would become number one this year, surpassing the United States.
Five years after the global climate change summit in Copenhagen, when the United States and China failed to reach a binding agreement, the situation has improved though much remains to be done if the world is to reach an accord in Paris next year to replace the Kyoto Protocol.
Last month's US$400 billion, 30-year China-Russia deal on natural gas, the biggest such deal ever, has implications beyond energy resources and Sino-Russian relations. For one thing, it reaffirms a decision by major emerging economies to move away from the U.S. dollar into their national currencies. At the same time, it is a big step toward the internationalization of the renminbi, or yuan, China's national currency.
Last autumn, half a year after assuming office as China's president, Xi Jinping invoked the ancient Silk Road of the Han dynasty 2,000 years ago and called for the forging of contemporary trading routes. In Kazakhstan, he urged the creation of a modern-day "Silk Road Economic Belt," stretching from China into Europe. The following month, in Indonesia, he called for the building of a "Maritime Silk Road of the 21st Century."
The decision by the United States to indict five officers of the Chinese military on May 19 for commercial cyber-espionage is unprecedented and appears to stem from political rather than economic reasons. Yet, there are strong economic factors at play.
The huge China-Russia deal on natural gas, which is being hailed as a milestone in the development of relations between the two countries, is likely in the long run to be positive for East Asia and for energy consumers in general.
Chinese Premier Li Keqiang made headlines during his eight-day trip to Africa by promising that China would increase aid to the continent by US$12 billion and predicting that bilateral trade would double to US$400 billion and cumulative Chinese investment quadruple to US$100 billion by 2020.