As a prime example of cooperation among emerging economies, the BRICS group has consistently acted on the spirit of openness, inclusiveness, and win-win cooperation, playing a positive role in global industry chain cooperation. The expansion of the BRICS with the five new members of Saudi Arabia, Egypt, the United Arab States, Iran and Ethiopia will have a profound influence on industry cooperation among the member states.

First, the expansion will consolidate the foundation for industry cooperation among emerging economies. The enlarged BRICS mechanism will cover a larger population and more resources, creating a wider market and more space for industry cooperation.

Currently, most emerging economies are on the periphery of the global division of labor system, and are engaged in the manufacturing and processing of products with low technology or low added value. Thus, many emerging economies have fallen into the "middle-income trap" after reaching a certain level of development.

After expansion of the BRICS, the share of its population in the global total has risen from 40.7 percent to 44.9 percent, the share of economic output has risen from 24.7 percent to 27.1 percent, and the proportion of exports of goods has risen from 20.2 percent to 24.8 percent, which allows the expanded BRICS countries to mobilize more resources and creates a bigger platform for countries to cooperate. The expansion will also further the economic integration within the group, and help build a more competitive and fair division of labor system among them, with the complementarity of resource endowment among member states enhanced.

The new members of BRICS are rich in energy, mineral and agricultural resources. Saudi Arabia is one of the world's largest oil producers; Egypt has abundant mineral and natural resources, and an advanced planting industry; the UAE is one of the leading liquefied natural gas exporters in the world; Iran is also a major oil producer, while Ethiopia is an agricultural powerhouse. They will provide more raw materials for industry cooperation among the BRICS countries and help optimize the allocation of global resources, promoting the sharing of resources among the members.

The new BRICS countries also have their respective advantages in different technological fields, which is conducive to deepening innovation cooperation.

Saudi Arabia and the UAE have advanced petrochemical and aerospace industries. Egypt has made progress in transforming its traditional industries, such as textile and steel. Iran's R&D capacity in the nuclear energy and petrochemical sectors is remarkable. Ethiopia is a major manufacturing powerhouse in Africa, and is developing industries such as communications and IT.These tech advantages and resources will give the BRICS countries more space for deepening their tech cooperation and boost their technological capacity.

There are three areas in particular in which the expanded BRICS grouping can strengthen their cooperation. First, the BRICS countries include both major energy exporters and importers. The energy importers can participate in the exploitation and operation of mines and oil fields in energy exporting countries through acquisitions and mergers, or form joint ventures with enterprises in exporting countries by providing capital and technologies to take part in the development and use of new energy. They can also help host countries to build ports, roads, railways and grids to improve the transportation and trade efficiency.

Second, the BRICS countries are at the different development stages, creating conditions for them to transfer industries and expand markets within the group. Member states can integrate their resources, markets and technologies into a unified global division of labor system by jointly establishing industrial parks, thus promoting the development and upgrading of traditional industries.

Third, the BRICS countries can cooperate to produce high-tech innovations. The world is on the eve of a new technological revolution, characterized by the rapid development of technologies such as artificial intelligence, 5G, new energy and aerospace, which provides a precious opportunity for the developing countries to overtake the developed countries.

The BRICS countries can jointly build research centers and technology parks to pool resources and promote tech transfer and incubation, which will reduce the costs of R&D and boost its efficiency and promote the integrated development of emerging industries in the grouping.

There are four main strategies and methods for the BRICS countries to promote industry cooperation through financing.

First, they can create a sound monetary and financial environment for industry cooperation through currency cooperation. The BRICS countries should establish currency swap schemes to reduce the impacts of exchange rate fluctuations and boost trade and investment facilitation. It is important to expand the foreign exchange reserves of the BRICS countries and attract funding from the new members to boost the group's capacity to weather international financial crises and liquidity crunches. The BRICS countries should jointly build local currency bond markets, encourage governments, financial institutions and multinationals to issue local currency bonds, and enhance support for infrastructure building and corporate financing. In this way, there will be more reliable investment options within the group and the problem of currency mismatch will be eased.

Second, they should enhance financial support for key industries and projects. The original BRICS members — Brazil, Russia, India, China and South Africa — can draw new members such as Saudi Arabia and Ethiopia into the New Development Bank to enlarge the bank's capital base and boost its capacity to mobilize resources and raise funds. The enlarged grouping should expand investment and financing using local currencies to reduce the costs of financing and the risks involved in foreign exchange fluctuations. The group should integrate the resources of commercial banks in member states, and support flagship projects through joint loans and syndicated loans. It needs to work out differentiated financing strategies to support different industries and cater to the need for capital of outstanding enterprises and projects.

Third, the BRICS countries can enhance support for high-tech and frontier industries. The members of the grouping should enhance their financing support for digital economy industrial parks, incubation bases, and tech transfer centers to facilitate cooperation among member states in tech innovation and transfer. Governments of member countries, multinationals and industrial leading enterprises can jointly establish emerging industries incubation funds, seed funds and venture capital funds, particularly taking advantage of the influence of Saudi Arabia and the UAE in the financial market of the Middle East and draw their sovereign wealth funds to invest in promising start-ups to promote tech breakthroughs.

Fourth, the enlarged group should deepen their cooperation in payment and settlement system. The BRICS countries should explore building a unified local currency payment and settlement system and promote connectivity between different payment systems. The group needs to enhance digital currency and mobile payment cooperation among the member states, and encourage more central banks and financial institutions of emerging economies to participate in the mBridge project, which explores multilateral cooperation regarding international payments using central bank digital currencies, and use distributed ledger technologies to facilitate cross-border payments.

The author is a senior researcher of the Research Institute at the Bank of China. The author contributed this article to China Watch, a think tank powered by China Daily.

Contact the editor at editor@chinawatch.cn.