Western sanctions are ‘weaponizing’ the world economy

Hong Kong (CNN) — Chinese leader Xi Jinping set the tone for a virtual summit with leaders of the world’s major emerging economies in a speech Wednesday night, denouncing economic sanctions as “weapons” on the world economy and urging the unit in the face of financial challenges.

Xi, speaking at a business forum ahead of Thursday’s virtual summit with leaders of the BRICS economic bloc — Brazil, Russia, India, China and South Africa — said the world is at a critical juncture as it struggles to recover from the pandemic in amidst what he called new “security challenges”.

“The tragedies of the past tell us that hegemony, group politics and bloc confrontation do not bring peace and security, they only lead to wars and conflicts,” he said in a speech that was broadcast via video link.

“The Ukraine crisis is another wake-up call for everyone in the world. It reminds us that blind faith in the so-called ‘position of strength’ and attempts to expand military alliances and seek one’s own security at the expense of others will only fall in a security dilemma,” Xi said.

The comments appeared to be a veiled reference to the United States and NATO, which Beijing has repeatedly blamed for provoking Russia’s aggression in Ukraine.

He also took aim at Western sanctions, saying such sanctions were a “double-edged sword” that weaponized the global economy and would “harm the people of the world.”

Instead, countries should “embrace solidarity and coordination,” he said, touting China’s new development and security initiatives as models.

The BRICS summit and Putin’s participation

The comments provide insight into China’s priorities as host of the annual BRICS summit, a virtual event in Beijing that is also the first time Russian President Vladimir Putin has met in a forum with leaders of major world economies since the invasion of Ukraine earlier this year.

In his own video address at Wednesday’s event, Putin said Russia was “redirecting” its trade flows to BRICS countries and other “trusted international partners,” according to a Kremlin transcript.

He also rejected Western economic actions, saying “politically motivated sanctions” and “mechanisms to put pressure on competitors” undermined global business and were “contrary to common sense and basic economic logic.”

Sanctions have been a key tool used by Western governments and their allies against Russia following its unprovoked invasion of Ukraine, as they seek to pressure it to give up its brutal attack. This has led to a humanitarian crisis and accusations of war crimes against Ukrainian civilians by Russia.

The war in Ukraine casts a shadow over the summit

The war in Ukraine is expected to cast a shadow over the summit, the 14th since the bloc was established in 2009 as a means to “serve the common interests of emerging market economies and developing countries.”

But the crisis, and the series of Western sanctions, may also give impetus to certain issues the group has been discussing for years, including promoting trade deals outside the US dollar system, which Russian institutions are now heavily subject to. restrictions.

Putin raised this possibility in his remarks on Wednesday, saying that the BRICS partners were “developing reliable alternative mechanisms for international agreements” and “exploring the possibility of creating an international reserve currency based on the BRICS basket of currencies.”

But it remains to be seen how enthusiastically the entire bloc will embrace major initiatives such as a change to the dollar system or sweeping statements denouncing Western sanctions at Thursday’s summit.

While each of the BRICS leaders has avoided condemning Russia outright, they have different levels of interest in not being seen as endorsing their actions or working too closely with Russia, and angering their Western friends.

The differences in tone were evident in the speeches of each of the leaders at the forum on Wednesday night, an event for business leaders on the sidelines of the summit.

In his video address, Indian Prime Minister Narendra Modi focused on the forum itself and his hopes that it will spark exchanges between start-ups. South African President Cyril Ramaphosa focused on poverty, inequality and issues such as access to vaccines, as well as trade and investment, according to government transcripts of him.

And Brazil’s President Jair Bolsonaro said that in the face of global economic risks, his country was open to further economic integration, according to Brazil’s national public news agency.