The so-called BRICS group of emerging economies – Brazil, Russia, India, China and South Africa – has agreed to set up a development bank, to help fund infrastructure programmes.
It would be a direct challenge to the World Bank, which they accuse of Western bias.
But at the BRICS gathering in Durban, South Africa, they could not agree the development bank’s size or structure, or even where it would be based.
The two biggest economies – China and Brazil – did manage to sign a three-year currency swap agreement to protect against turbulence in financial markets.
Brazilian Central Bank Governor Alexandre Tombini said that should protect their fast-growing commercial ties: “The idea of the swap… is to provide a back-stop line for financing of the bilateral trade even under more difficult conditions as far as the global financial markets are concerned.”
Brazil sent 32 billion euros worth of exports to China last year – mostly minerals and farm products – which have helped fuel China’s industrial growth and feed its people.
China exported 26.6 billion euros worth of particularly machinery, electronics and manufactured goods to the Latin American giant.
The 23.4 billion euros currency swap between China and Brazil also marks a step by the two largest economies in the emerging powers group to change global trade flows, which have been long dominated by the United States and Europe.