The World Rebalances Naturally

The numbers tell the story better than any political commentary. The expanded BRICS group now represents 40% of global population, 27% of global GDP, 45% of global agricultural production, and 30% of global oil production. If Saudi Arabia joins (they’re reportedly under US pressure not to), that oil figure jumps to 42%.

As Lundy put it: “This is a grouping that cannot be ignored, and it’s a grouping that’s going to continue to grow in prominence over the next 10-15 years.”

This isn’t anti-Western revolution – it’s natural rebalancing toward stability through diversified power centers. When half the world’s population and a third of its economic output start coordinating more closely, that’s not ideology, that’s gravity.

Here’s where it gets interesting for us. South Africa’s weight in the MSCI Emerging Markets index has declined from 7-8% to just 3%. On paper, that looks like failure. In reality, it might be opportunity.

As one conference panelist noted: “Low expectations are really important.” When a market is growing slowly and creating fewer new opportunities, the existing ones become more valuable. Plus, our non-aligned positioning – despite the ruling NC’s stronger ties with certain BRICS partners – keeps multiple doors open (including their seeming, natural, fading away in our political system).

Our trade flows already reflect this rebalancing. Only 7% of our exports go to the United States, and 40% of those are minerals and metals that aren’t subject to tariffs. So only 4% of our exports face Trump’s proposed 30% tariffs. The natural response? “We look to the east. We look to India, we look to China, we look to the Middle East.”

This pivot isn’t ideological – it’s economic common sense.

The conference revealed something that should terrify American policymakers: about half of the top 20% of AI researchers are now Chinese, up from less than a third just five years ago. Meanwhile, China has fast-tracked their renewable energy transition, reaching 50% renewable electricity generation by 2024 – six years ahead of their 2030 target.

Here’s the kicker: about half of Masters and PhD students in AI-relevant subjects in America are foreign, and about 80% traditionally stayed in America after graduation. But with politicians like Marco Rubio threatening to “aggressively revoke visas for students from China,” America is effectively stopping its own AI research development.

This is how empires decline – not through external conquest, but through internal contradictions that drive away the talent they need to stay competitive.

During the emerging markets panel, the opportunities became clear. While US markets trade at elevated multiples, emerging market equity and bond funds have seen significant inflows for the first seven months of 2025. Fund managers are overweight emerging markets by the most amount they’ve been since 2023.

The math is compelling: Chinese companies trading at price-to-earnings ratios of 9-11 versus US equivalents at 45-50. This isn’t about political preferences – it’s about where value exists when you strip away the narratives.

One fund manager’s personal approach captured this perfectly: “My own portfolio is actually made up of two things – made out of the US and made out of China, the two biggest rivals in the world. That’s great. The correlation is close to zero, and my portfolio always grows.”

Lundy highlighted something most Western analysts miss: “New ports, new renewable energy, new bandwidth, port upgrades, airports… much going on in terms of infrastructure development across the continent, in order to take advantage of that population growth.”

This is where the Chinese approach differs fundamentally. While Western investment focuses on financial returns, Chinese infrastructure investment focuses on long-term economic integration. If you were betting on Africa’s growth, Lundy noted, “I’d be looking very actively at East Africa, tremendous amounts of infrastructure being spent… by the Chinese.”

In our wealth management process, we’re constantly evaluating whether our investment strategies can recognize these structural shifts and position accordingly. This rebalancing creates opportunities, not just risks, for investors willing to look beyond home bias.

The conference reinforced several key principles:

• Diversification across power centers reduces risk. As the world becomes multipolar, portfolios concentrated in any single region – even successful ones – become less resilient.
• Currency diversification follows trade flow changes. As South Africa’s economic relationships shift eastward, rand exposure to different currency baskets becomes increasingly important.
• Infrastructure investment precedes market performance. The Chinese infrastructure spending across Africa today creates the foundation for tomorrow’s growth opportunities.
• Valuations matter more than narratives. Whether you like China’s political system is irrelevant to whether Chinese companies represent better value than their US counterparts.

This is why attending conferences like Morningstar and staying connected to global investment thinking matters so much. While others react to headlines about “declining Western influence,” we’re identifying the opportunities that emerge from natural rebalancing.

The key insight from every panel was the same: this transition is inevitable, not optional. Technology diffusion, demographic shifts, and economic gravity don’t care about political preferences. The question isn’t whether this rebalancing will happen – it’s whether your portfolio is positioned to benefit from it.

Asset allocation becomes crucial when you understand we’re not witnessing decline, but evolution. The funds and strategies we use need to recognize that global stability might actually increase as power becomes more distributed rather than concentrated.

We encourage you to read widely about these trends, not just in our communications but across different perspectives. Understanding how global power shifts affect markets helps you separate short-term volatility from long-term structural changes.

Here’s the deeper point: for most of human history, global power was distributed across multiple centers. The brief period of Western dominance was the historical anomaly, not the current rebalancing toward multipolarity.

As Lundy noted about historical patterns: “As one rises and the other falls, you start to see a change of world order, and that’s pretty much where we find ourselves today.”

This isn’t the end of the world – it’s the world returning to its natural state of multiple centers of influence competing and cooperating simultaneously.

Ready to discuss how your portfolio can benefit from this rebalancing rather than fear it? Let’s explore positioning for the world that’s emerging, not the one that’s ending.