(Photo : BRICS (Brazil, Russia, India, China, South Africa))

China showed its commitment to the plan of the BRICS (Brazil, Russia, India, China, South Africa) Group to setup currency reserves as ready fund against financial shocks by contributing $41 billion.

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The China contribution represents 41 per cent of the total $100 billion that the BRICS nations agreed to raise in order to shield each country against any form of financial downturn, said China Vice Finance Minister Zhu Guangyao

Brazil, Russia, and India will be contributing $18 billion each to the pool of currency reserves while South Africa, a new member of the group, pledged to chip in $5 billion. The figures were announced at the sideline of the Group of 20 Summit in Russia.

Contingent Reserve Arrangement

The details of the fund , dubbed the Contingent Reserve Arrangement, were still being worked out, the leaders of the agreeing nations announced but Russian President Vladimir Putin said the initiative to establish the $100 billion currency reserve fund is already at its final stage.

A source said the technical aspect of the currency reserves will be discussed thoroughly when BRICS officials meet again in March next year.

Chinese banking leaders immediately called the development as a milestone. Zhou Xiaochuan, governor of the People's Bank of China, the country's central bank, said the said currency reserve fund is conductive to further promoting international economic growth and global financial stability.

$50 Billion for BRICS Bank

Also during the informal meeting of BRICS nations in Russia, the group had agreed to infuse a $50 billion capital to a new development bank it planned to establish.

Officials from BRICS countries agreed to set up the bank with $50 billion capital, which will be shared equally among the five nations. The development bank, sources said, aims to reduce BRICS's reliance on other global financial institutions.

China's trade with BRICS member countries went up 188.5 per cent, 83 per cent, 72 per cent, and 327 per cent, respectively. Import and export of services in China also preserved their growth, boasting a year-on-year total-volume increase of 12.3 per cent to $470.58 billion.