Expanding BRICS a challenge for the West

The interest nations are showing in joining the BRICS group is helping Russia and China push back at attempts by the US and its allies to isolate them over the war in Ukraine and military posturing in Asia. [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. Russia and China may be under pressure in Europe and the US, but it’s a different story in Asia. Separate trips this week by President Vladimir Putin and Chinese Premier Li Qiang were a reminder that many nations [still welcome closer ties]( with Moscow and Beijing. Putin’s [biggest accomplishment]( may have been securing more extensive military cooperation with North Korea, where he made his first visit in 24 years. His stop in Vietnam was important too. Hanoi upgraded its relationship with Washington last year in a victory for the Joe Biden administration, but ties with Moscow are deeper and more historic. Vietnam and other Southeast Asian nations such as Indonesia, Thailand and [Malaysia]( have all weighed becoming members of [the economic bloc]( co-founded decades ago by Brazil, Russia, India and China and which now includes other “Global South” nations such as South Africa and Iran. For Putin and Li, the interest in BRICS shows their success at pushing back at attempts by the US and its allies to isolate them more broadly over Russia’s war in Ukraine and China’s military posturing in Asia. WATCH: Kim Jong Un said he will “unconditionally support” Russia in its invasion of Ukraine. Bloomberg Opinion’s Marc Champion breaks down the situation and its significance. Source: Bloomberg The bloc is attractive to those seeking an alternative to US or Western-led institutions such as the International Monetary Fund, which pushed austerity measures blamed by some in the region for deepening the hardship caused by the Asian financial crisis in the late 1990s. And BRICS does control a multilateral lender in the Shanghai-based New Development Bank that has loaned almost $33 billion to its members for new projects including infrastructure. Whether those seeking to join the group will be able to tap that finance remains to be seen. Regardless, it’s clear that BRICS is gaining ground as a hedge against the West.— [Philip Heijmans]( Li Qiang, left, with Malaysian Prime Minister Anwar Ibrahim in Putrajaya, Malaysia, on Wednesday. Source: Malaysia’s Department of Information/AP Photo Global Must Reads Support for Marine Le Pen’s far-right National Rally is rising ahead of France’s legislative elections, [according to a new poll](, while a separate survey showed President Emmanuel Macron’s approval rating worsening. The snap two-round vote beginning on June 30 has [unsettled some bankers and fund managers]( who heeded Macron’s plea to flock to Paris so it could one day rival London as a finance hub. Marine Le Pen Photographer: Nathan Laine/Bloomberg Israel’s military is airing doubts over Benjamin Netanyahu’s long-stated goal of destroying Hamas in Gaza, with Rear Admiral Daniel Hagari describing the idea in a television interview as “simply throwing sand in the eyes of the public.” His comments [highlight the difficulties]( facing the prime minister in claiming victory in a war that’s now into a ninth month. South Korean soldiers fired warning shots after North Korean [troops crossed the border]( and then retreated for the third time this month. The incident took place hours after Putin wrapped up his first visit to North Korea in 24 years, where he and Kim Jong Un [sealed a deal]( under which their countries would come to each other’s aid if attacked. Keir Starmer is preparing a blitz of planning reforms aimed at immediately boosting housebuilding if his Labour Party [wins the UK election]( next month. Starmer would instruct his government to work rapidly to implement changes to help deliver 1.5 million homes over five years, [sources say](. Argentine President Javier Milei is [making a return trip]( to Europe starting today, emboldened by the success of his right-wing allies in recent elections. Milei is attempting to position himself as a leader of the global hard right that is threatening to make sweeping gains this year — at the expense of leftists he has antagonized like Spanish Prime Minister Pedro Sanchez. A naval force deployed by the European Union to protect vessels in the Red Sea needs to [more than double in size]( because of escalating attacks by Iran-backed Houthi rebels, the head of the operation said. At least two refineries in southern Russia were damaged in [an overnight swarm attack]( by drones, one of the largest of its type since the war in Ukraine began. Taiwan’s opposition Kuomintang threatened to derail much of the ruling Democratic Progressive Party’s agenda, [deepening a dispute]( over new legislation that would let lawmakers investigate President Lai Ching-te’s government and summon top officials. Philippine Vice President Sara Duterte’s resignation from the cabinet this week sets her up as the [most formidable challenger]( to President Ferdinand Marcos Jr. just two years into his six-year term. Washington Dispatch The $85 million that the Joe Biden-Kamala Harris campaign raised in May [is an impressive figure]( — until you compare it to the $141 million amassed by Donald Trump. The former president’s showing was made possible by an extraordinary gusher of donations at the very end of the month following his conviction on criminal charges. May marked the second consecutive month that Trump outraised Biden, who up until then had possessed a commanding advantage. The Biden campaign says it still has $212 million in the bank even after hiring hundreds of staff in swing states and buying $50 million in advertisements. Trump didn’t say how much he had in the bank, but his campaign and the RNC reported having $171 million cash on hand. Biden’s staffers have used Trump’s gains to raise more money — sending emails and text messages to highlight his post-conviction windfall. One thing to watch today: Existing home sales likely declined in May as high interest rates dent demand amid a crisis of affordability. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day China’s electric vehicle industry received at least $231 billion in government subsidies and aid from 2009 through to the end of last year, even as the amount of support per vehicle has declined, [according to new research](. Slightly more than half the total amount was in the form of sales-tax exemptions, Scott Kennedy, a China specialist at the Center for Strategic and International Studies, wrote in a blog post. The rest is made up of nationally approved buyer rebates, state funding for infrastructure such as charging stations, government procurement of EVs and R&D support programs. And Finally Although financial crime in Sweden has garnered fewer headlines than a surge in gang-related gun violence, it’s [become a growing risk](, partly because the country has gone further on ditching paper money than almost any other in Europe. Authorities have put pressure on banks to tighten security measures and make it harder on tech-savvy criminals, but it’s a delicate balancing act. Going too far could slow down the economy, while doing too little erodes trust and damages legitimate businesses. BankID is used by nearly all adult Swedes. Photographer: Jeppe Gustafsson/Shutterstock Pop quiz (no cheating!) 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