Analysis Of The Economic Development Prospects Of BRICS Countries

The global financial crisis, which originated in the United States, had a major impact on the world economy and the economic recovery prospects of developed countries. As the countries with the most active economic growth in the world, BRICS countries (Brazil, Russia, India, China and South Africa) face a great challenge. They need to adjust their development strategies when facing the new challenge in order to achieve rapid and sustainable economic development.

BRICS are all developing countries with good economic development and rapid growth. They have become an important force on the world economic stage, however, these countries face challenges including:

unsustainable economic development models; the negative impact of unfamiliar challenges of; the pressure of economic transformation and upgrading; external strategic pressure / internal political uncertainty The economic development models of BRICS countries is significantly different from that of developed countries and regions like the United States, Europe and Japan. The economic growth in the five BRICS countries was established on the basis of low-cost labour, abundant mineral resources, and few technological innovations. Taking China as an example, it depends highly on investments for economic growth as opposed to consumption which has no contributing value.

The economic structures of BRIC countries are inadequate. Russia mainly depends on the energy, military and heavy industries, but the service and financial sectors are underdeveloped. China is at the low end of the industry-chain structure, whilst South Africa, Brazil and India do not have a comprehensive industrial system and external dependence is prominent.

The internal and external environmental changes have caused large emerging economies to pay more attention to the urgent and difficult task of transformation. There is a general increase in the inflation rate of BRIC countries. In recent years, the overall rate of inflation of BRIC countries has increased year-on-year. In 2012, the exchange rate of the Russian Ruble to the US dollar appreciated by 5% and Renminbi (currency of the People's Republic of China) appreciated by 5%. However, the Brazilian Real, the Indian Rupee and South Africa Rand all faced serious devaluation as the countries saw a decline in the growth of foreign investment and capital flight.

China and India mainly rely on an abundant and low-cost labour force, and are engaged in the processing and...

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