China’s Silk Road wins big at SCO Summit
July 11, 2015, 6:19 am
In a recently concluded summit of the region, Beijing has consolidated its already strong economic position in Central Asia.
In Russia for the BRICS and SCO Summits, Chinese President Xi Jinping called on the member states to “uphold the “Shanghai Spirit” for common development”.
At least $16 billion of China’s $40 billion Silk Road Fund will be dedicated to projects in Central Asia.
President 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.
Heads of State of the Shanghai Cooperation Organisation member countries, observers and dialogue partners at Summit in Ufa, Russia on 10 July 2015 [Image: brics2015.ru]
Xi on Friday also welcomed the planned expansion of the China-Russia-led SCO to include Asian neighbours India and Pakistan.
The Shanghai Cooperation Organisation (SCO) passed a resolution Friday to initiate the procedures of granting India and Pakistan full membership of the organization at the 15th SCO summit in the southwestern Russian city of Ufa.
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.
Also Friday, the SCO elevated Belarus to the status of observer from dialogue partner, and took in Azerbaijan, Armenia, Cambodia and Nepal as new dialogue partners.
“China believes that the admission of new forces into the SCO will inject new impetus into the organization’s all-ranging cooperation,” Xi said while delivering a speech at the summit.
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 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 on Friday 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.
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 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,” said Xi.
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.
The Russia-China alliance in Central Asia received a boost with Putin agreeing to most of Beijing’s proposals.
At a press conference following the BRICS and SCO Summits in Ufa on Friday, Putin underlined the need for further integration of the region’s economies.
“China remains the locomotive of world economy,” said Putin.
“Our colleagues in the SCO and BRICS often talk about the need to develop infrastructure without which it is impossible to ensure sustainable development. This applies to railways, roads, air transport and pipelines.
It is hard to dispute this. Meanwhile, the Silk Road Economic Belt projects and our plans for the development of Tran-Siberian Railway and the Baikal-Amur Railway and some of our other projects in the EAEU obviously require joint efforts,” he added.