- The Shanghai Cooperation Organization is planning to establish a new development bank and a new transport corridor
- Next year India and Pakistan will join as full members
This article originally appeared at The BRICS Post
Leaders from the Shanghai Cooperation Organization (SCO) are meeting on Monday in central China’s Zhengzhou City for their 14th prime ministers’ meeting. The China-Russia-led bloc is planning to establish a new development bank and a new transport corridor.
During the two-day meeting, Chinese Premier Li Keqiang and Russian Prime Minister Dmitry Medvedev along with other heads of government from the SCO members of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan are expected to discuss “cooperation in trade, investment, finance, transportation and culture”, said an official Chinese statement.
A host of cooperation deals will be signed at the meeting and a joint statement is expected on Tuesday.
The bloc’s meet in China is yet another indication of how the Russo-Chinese relationship will shape the region’s future.
In Russia for the BRICS and SCO Summits in July, Chinese President Xi Jinping called on the member states to “uphold the “Shanghai Spirit” for common development”.
Xi announced in Ufa, Beijing is willing to strengthen investment cooperation with other SCO members channeling the China-Eurasia Economic Cooperation Fund and the Silk Road Fund, “focusing on large infrastructure projects, resources exploitation, industry and finance”.
China had already announced a $40 billion Silk Road Fund last year.
The China-Russia-led SCO has also announced an expansion this year to include Asian neighbours India and Pakistan.
Both countries will become full-fledged members of SCO at the Tashkent Summit in 2016.
Currently, both India and Pakistan are observers at the bloc. Pakistan applied for a full membership in 2006 and India in 2014.
During the two-day summit this week, leaders of the group will focus on economic cooperation, reiterating support for regional development strategies including the China-proposed initiative on the construction of the Silk Road Economic Belt and the 21st Century Maritime Silk Road, or the Belt and Road Initiative.
The Russian President and Chinese leader Xi Jinping signed a decree in May on tying the development of the Russia-led Eurasian Economic Union with China’s ambitious “Silk Road” economic project.
The SCO also signed an agreement on border defense at the summit in Ufa. The bloc is also drawing up a new treaty on fighting extremism.
Russian President Vladimir Putin said at the Summit in July that “ensuring the security of the member countries’ territory and external borders remains one of the Shanghai Cooperation Organisation’s priority areas of work”.
“The growing activity of the Islamic State terrorist organisation, which is trying to spread its influence, is further worsening the situation. We agreed to bolster coordination between our defence ministries to monitor the situation more effectively and coordinate joint action to prevent potential threats,” said Putin.
Founded in 2001, the SCO now has China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan as its full members, with Afghanistan, Belarus, India, Iran, Mongolia and Pakistan as observers, and Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka and Turkey as dialogue partners.
The SCO member states are also planning a new bank after the successful launch of the new BRICS Bank and the Asian Infrastructure Investment Bank (AIIB).
“The SCO members should strive for early establishment of their own financing vehicles to serve multilateral projects of shared benefits, as well as the economic development of each member,” Chinese President Xi Jinping said earlier this year.
Xi, in Russia this week, also called on member states to quicken the implementation of an SCO transport corridor.
China will provide funds to support the feasibility study and plans of the project, he said.
His Russian counterpart agreed.
“We see big promise for the initiative of developing a common SCO transport system, including using the transit potential offered by the Trans-Siberian and Baikal-Amur railways in Russia,” Putin proposed.
In the next few years, China will push for the completion of 4,000 kilometers of railway and over 10,000 kilometers of highway within the region, Xi said. Beijing has already invested billions of dollars in the natural gas pipeline network connecting Central Asian producers to China.
In tying the region further with its Silk Road Project, China also urged member states to deepen industrial capacity cooperation and push forward the building of industrial parks in every member state.