Besides trade, the BRICS countries’ attractiveness to capital has also been increasing. At the same time, the capital cooperation among these countries began to take on new features. China began to export capital via new cooperation models, such as loans for energy, resources, and infrastructure agreements with the BRICS countries, while China still remains as an attracting destination for investment from other countries.

Chart 18 shows that the annual growth rate of foreign direct investment (FDI) in the G7 countries has fluctuated widely since the 1990s. In fact, FDI in the BRICS countries maintained steady growth. During the past two decades, the annual growth rate of the FDI in the BRICS countries was mostly positive and took on upward trend despite the sluggish world economy. Despite this, the annual growth rate of the FDI in the G7 countries showed sharp declines or were even negative. This showed that the emerging markets could find opportunities during the economic crises to reinforce their economic strength.

From Chart 18, we can see the proportion of BRICS countries’ FDI in the world was much smaller than that of the developed markets, such as G7 countries, when the BRICS countries were at the early stage of their development. However, after 10 years of steady growth, the proportion of the world’s FDI by the BRICS countries has become much closer to the G7 countries. During the past two financial crises, the BRICS countries showed stronger vitality than the developed economies. After the Asian financial crisis in 1998, the proportion of the G7’s FDI in the world dropped to 31 percent in 2003 from 54 percent in 2000. At the same time, the share of the BRICS countries’ FDI rose to 13.5 percent from less than 6 percent. After the global financial crisis in 2008, the ratio of the BRICS countries kept rising to 18 percent, a historic high, while the G7’s proportion dropped to 30 percent, the lowest level in history. Among the BRICS countries, China took the lead in terms of the scale of FDI. In 2009, the FDI in China accounted for 48 percent of the five countries’ total. However, China’s proportion declined slightly from 53 percent in 1999 to 48 percent in 2009, while the proportion of India and Russia registered fast growth. The ratio of India rose to 17 percent in 2009 from 3 percent in 1999, while that of Russia increased to 19 percent from 4 percent. Thanks to the fast growth of the FDI in India and Russia, the gap between China and the other countries has been narrowed, indicating the coexistence of cooperation and competition among the BRICS countries.

Emerging economies have become the major destinations for global capital flows. According to a report released by the Institute of International Finance, the private capital flowing into emerging economies increased 50 percent in 2010 to 908 billion US dollars. The private capital flowing to emerging economies is expected to rise to 960 billion US dollars in 2011, and to hit 1 trillion US dollars in 2012. Meanwhile, overseas investments of the emerging economies were also on the rise. In the first half of 2010, companies from the emerging economies were involved in 243 deals in the developed economies, far more than the 194 deals in the second half of 2009. In addition, cross-border mergers and acquisitions (M&A) in emerging economies also increased sharply.