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China’s Outlook on the Shanghai Cooperation Organization

[Editor’s Note: The Shanghai Cooperation Organization (SCO) had its 12th Summit in Beijing from June 6 to 7, 2012. Chinese media praised the event highly as a milestone for SCO, marking the transition into its second decade. In China’s view, the SCO model, or “Shanghai Spirit,” is China’s way of dealing with international organizations. It differs from the U.S. model in that China focuses more on political results. It fosters political unity by offering economic help to other countries. China contributes more monetarily to SCO but offers each member country the same share of voting power. China also leverages its huge economic engine to promote joint regional economic development. The economic carrots that China has offered have served to keep the SCO united and have played a more and more important role in regional and international affairs. The following are excerpts from three articles that Outlook Weekly published to commemorate the SCO.]

SCO: A Wonderful Book [1]

By Cheng Guoping, Vice Foreign Minister

I. Strategic Diplomatic Importance

The SCO makes an extremely important contribution to China’s foreign policy. SCO has six member countries, Kazakhstan, China, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. Their combined land area accounts for 3/5 of Eurasia, and their total population makes up 1/4 of the population of the world. In 2011, the total GDP of the six SCO members accounted for 13% of the world GDP.

China and the rest of the SCO members share borders totaling more than 7,600 kilometers (4,750 miles). The “Shanghai Five,” the predecessor to the SCO, was established to solve the border issues and to build trust in the border regions.

If we include SCO’s five observer states–India, Iran, Mongolia, Pakistan, and Afghanistan–and its three dialogue partners–Belarus, Sri Lanka, and Turkey–into the above statistics, the size of the SCO is even more impressive.

The SCO advocates maintaining equality between nations, large or small, and solving regional affairs through consultation. It established a multi-level, multi-channel platform covering more than 50 areas and a consultation and group decision mechanism involving national agencies, academic institutions, and non-governmental organizations. This enables its member countries to communicate and coordinate on issues in a timely manner, from big topics such as strategic security to small issues like detailed implementation, and to seek common ground while preserving differences and expanding consensus. The birth of the SCO provides a good platform for the countries in the region to develop good-neighborly friendship and deeper pragmatic cooperation.

II. Four Milestones

The first milestone was the establishment of the SCO in 2001. Member countries signed the Shanghai Convention to Counteract Terrorism, Separatism, and Extremism. Its strategic direction was focused on combating these “three forces” [2] and safeguarding regional security. Here I would like to draw everyone’s attention to the fact that the Convention was signed in June of that year, three months before the 9/11 event in the U.S. This means that the SCO was the first to raise the anti-terrorism issue. It had a very clear understanding regarding the terrorists’ threats and challenges to the region. For the past 11 years, SCO member countries’ cooperation in the area of security has continued to expand, from combating the “three forces” to fighting drug trafficking and providing security for major international events. As more and more information is shared online, computer network security has also become an important area of cooperation for the member countries.

The second milestone occurred in 2003 when the SCO member countries signed the Multilateral Trade and Economic Cooperation Outline. It outlined the main tasks for economic and trade cooperation in the short, medium, and long term, and established the long-term vision of progressively implementing the free flow of goods, capital, and services. Investment and trade cooperation among the member countries continues to increase. In 2011, the trade volume between China and other members reached US$113.4 billion, more than 9 times what it was 10 years ago.

The third milestone occurred in 2007 when the Long-Term Good-Neighborly Friendship and Cooperation Treaty was signed. The ideology of friendship forever and the absence of hostilities between member countries was officially set up in the form of law, which created the new model of a non-alignment and non-confrontation partnership between the member countries.

The fourth milestone occurred this year, which marks the first year of the second decade of the SCO. All of the parties uniformly decided to establish a strategy for SCO’s development in the next decade to enable the SCO to play a greater role in protecting regional security and promoting joint development.

III. Three Relationships That Need to Be Kept in Balance

The first relationship that needs to stay balanced is maintaining regional stability versus adhering to the principle of noninterference in internal affairs. The “three forces,” drug trafficking, and transnational crimes are rampant, and the unrest in Western Asia, North Africa, and Afghanistan continue to pose a real threat to regional security and stability. They necessitate that the SCO increase its capacity to respond to emergencies. To respond to the changing situation of the region and external interference, the SCO member countries must strengthen their union and become stronger. Not only should they cooperate broadly and comprehensively, but they should also adhere to the principle of non-alignment and demilitarization. Also, on the basis of respecting each other’s sovereignty and independence and the basis of not interfering in others’ internal affairs they should address various threats and challenges actively and effectively.

The second relationship that needs to be kept in balance is improving the ability to act versus adhering to the principle of consultation to reach consensus. Consensus is the unique charm and vitality of the SCO. It is a true representation of the equality among all countries, big or small, rich or poor, strong or weak. Regarding the major organizational development issues, member countries must always adhere to the principle of consensus. Only when the fundamental interests of the member countries are respected and upheld can the organization develop and cooperation be sustained. For specific projects, as long as the concerns of member countries are respected and overall interests protected, we can flexibly and pragmatically carry out multi-level, multi-channel cooperative efforts. In particular, (we should) implement those multilateral cooperative projects that will benefit the development of the member countries. This will make the SCO a reliable guarantor of the stability and development of its member countries.

The third relationship that needs to maintain a balance is between the SCO strengthening its own development and adhering to the principle of opening the door to other countries. The ongoing, deeper cooperation between member countries in various fields calls for the SCO to improve its process, rationalize the working mechanism, and improve its decision-making efficiency. At the same time, with the enhancement of the SCO’s international status and influence, more and more countries and international organizations wish to cooperate with the SCO. Member countries will continue to cooperate with the nations and international organizations that agree with the SCO’s mission and principles. It should also recruit new members, observers, and dialogue partners when appropriate, on the basis of consensus.

The New Decade for SCO [3]

By Sun Changhong, Deputy Director of the Eurasian Research Institute of the State Council Development Research Center

Further Elaboration on the Challenges before SCO

Currently, the international situation is undergoing profound and complicated changes; so is the situation in the Eurasian region. The unstable and uncertain factors that can threaten regional development and cooperation are increasing and changing. Given this background, planning the cooperation blueprint for the next decade and fixing the problems and challenges for SCO is particularly pressing.

The SCO’s economic cooperation to some extent faces difficulties as it is difficult to form a group consensus and different nations differ in their goals and systems. The main challenge is to find the breakthrough point to strengthen multilateral cooperation and coordinate among the different mechanisms of each country in the region. Regarding cooperation in the area of security, fighting the “three forces” is the key task. A lot of work has already been done in that area, but (we still need to) emphasize one thing. As the regional situation changes, cooperation in the area of political security urgently needs to be strengthened. This is necessary for each country to maintain its own political and social stability. It is their most crucial strategic need for the future.

In particular, the economic cooperation mainly relates to the fact that, for the next ten years, the uncertainty of the world economic situation will directly impact the economic development of the member countries. Due to the coexistence of multiple regional economic cooperation organizations, their member compositions, and the overlapping position of their functions, the economic ties among the member countries may become more complex. Along with the growth of China’s GDP and the expansion of China’s economy, the “China threat” theory and the “economic dependency (on China)” theory may become more widespread and the momentum of trade protectionism may rise. Regional security cooperation mainly relates to internal stability and security within the member countries, including such issues as the transition of power, extremism, and ethnic and tribal conflicts; and conflict between the member countries on issues such as water resources, borders, energy, and transportation cooperation. The security issues outside the region involve the drawn-out Afghan issue and its impact on the regional situation; the conflicts between the transformation toward democracy that the West tries to impose and the local people’s choice of their own path of development; and non-traditional security issues.

In addition, the relationship between the development of the SCO itself and its cooperation with other international and regional organizations needs to be refined and improved. The development of the SCO is mainly concerned with two issues: First, there are increases in the establishment of new institutions, setting up conferences and meetings, and reaching resolutions and agreements, but they lack specific targets and specific implementation. This affects the seriousness of the treaties and the authority of each organization. Also, an effective mechanism is lacking to respond to emergencies that occur in a region, within the member countries, and among the member countries. This directly impacts organizational cohesion and organizational cooperation. SCO’s development and SCO’s positioning are inconsistent, which may affect the unity and development of the organization.

The major issues in dealing with the relationship and cooperation with other international organizations are: first, an overlap of multiple organizations. With the exception of China, other member countries are also members of several other organizations and these organizations overlap in their functions and positioning; second, the differences in internal systems and internal goal setting between member countries, along with different expectations and attitudes that the members countries have for different organizations, may affect the cooperation among those regional organizations; third, the cooperation with relevant regional and international organizations is in its infancy and urgently needs to have some substantive and focused pragmatic cooperation; fourth, member countries lag behind other regional and international organizations in the area of economic cooperation. The above issues affect the SCO’s ability to speak out on regional affairs and prevent it from playing a greater role in regional affairs.

The Balance Power of the SCO [4]

By Yang Shilong, Outlook Weekly Reporter

I. The History of the SCO

As the Cold War was over and the world had entered the new millennium, the establishment and development of the SCO was a major event in international political affairs. Its origins date back to the “Shanghai Five.”

In May 1989, the relationship between China and the Soviet Union returned to normalcy. In November of the same year, China and the Soviet Union began to negotiate a mutual reduction of military forces along their borders and an improvement in military trust. With the collapse of the Soviet Union, more than 7,000 kilometers of border between China and the former Soviet Union became the border between China and Russia, Kazakhstan, Kyrgyzstan, and Tajikistan.

After 22 negotiations over 7 years, all parties reached a final agreement. On April 26, 1996, at the presidential summit in Shanghai, the five countries signed the “Agreement on Strengthening Military Trust in Border Areas.” In the following year, they also reached a disarmament agreement in Moscow.

In 1998, Kazakhstan President Nursultan Nazarbayev proposed that the five countries should not limit their cooperation to the border issue, but should also include economic and trade cooperation and the fight against the “three forces.” All countries endorsed this proposal. Since the first summit was held in Shanghai, the Kazakh media referred to it as the “Shanghai Five.” Since then, the five countries have held their presidential summit once a year, taking turns in each nation’s capital city.

In 2001, China was the host for the fifth anniversary of the “Shanghai Five” summit. China planned to continue to promote the “Shanghai Five” organization and work with all parties to establish a regional international organization on this foundation. After several in-depth discussions, all countries felt that it was the right time to establish an international organization. On June 15, 2001, the Shanghai Cooperation Organization was established.

II. What’s Behind SCO’s Success?

Zhang Deguang, who was the Vice Foreign Minister of China when the SCO was established, pointed out that the SCO needed to cooperate in three areas: security, economics, and humanitarian concerns. It is not the traditional, single-purpose type of organization. Nevertheless, it is different from the NATO-style traditional military alliance when it comes to cooperating over security, and with regard to economics, it is different from the E.U., which aimed at a high degree of integration.

Zhang Deguang stressed that the SCO was based on careful consideration of the historical relationships and experiences of the countries in the region. From the very beginning, it had its own unique set of ideas and norms, which is the “Shanghai Spirit,” or “mutual trust and benefit, equality and consultation, respect for diversified civilizations, and seeking common development.” These were also referred to as the SCO’s fundamental values, concept of civilization, security, development, and motto. They were enshrined in the SCO’s Charter.

“It determined that it would not have the characteristic of the Cold War era, nor does it carry the genes of confrontation. From the outset, it explicitly declared its diplomatic policy as pursuing peace, openness, and cooperation, making no alignments, forming no closed groups, and not targeting any third party.”

On April 24, 1996, Russian President Yeltsin visited Beijing. The five-nation summit was scheduled to be held in Beijing to sign an agreement on strengthening military trust along the border areas. If Yeltsin stayed in Beijing to sign the agreement after his visit, it would have left the impression that China and Russia dominated the treaty. To show the spirit of equality and meet diplomatic etiquette, Zhang Deguang recommended signing the agreement in Shanghai. China’s President would head south and Yeltsin would also leave Beijing. The Chinese and Russian leaders agreed and the three Central Asian countries warmly endorsed it.

Zhang Deguang said that the SCO Secretariat had membership fees and a budget, but the fees were not equally shared. Due to the different economic conditions of its member states, they pay different amounts in dues. China and Russia each pay 24%, Kazakhstan pays 21%, and other countries pay less. This does not mean, however, that the countries that make greater contributions have a greater voice. All member countries are equal within the organization and no country has veto power.

“For example, Kyrgyzstan’s annual GDP is only US$2 billion. The GDP of Putian City, Fujian Province in China is more than 500 billion yuan (US$79 billion), but Kyrgyzstan is still equal to us.” Zhang Deguang said that the SCO meeting lists countries in alphabetical order using the Russian language, rather than in the order of the countries’ economic strength.

In fact, since the six SCO members signed the “SCO Member Countries Multilateral Trade and Economic Cooperation Outline” in 2003, which defined the short-term, mid-term, and long-term development goals for regional economic cooperation, the region has shown rapid development in that area.

A set of data is worth noticing: By the end of 2011, the total amount of import and export trade of the six member countries reached US$4.65 trillion, an increase of 25.1% from the prior year. The volume of trade between China and other member countries increased from US$12.1 billion in 2001 to US$113.4 billion in 2011. China has become Russia’s largest trading partner and the second largest trading partner for Kazakhstan, Kyrgyzstan, and Tajikistan.

According to statistics from the IMF, despite the international financial crisis, the total GDP of the six member countries reached US$9.39 trillion in 2011. When the SCO was established it was only US$1.67 trillion.

Minister of Commerce Chen Deming wrote an article commenting that the SCO member states have achieved good results in their trade and economic cooperation. Infrastructure connecting the energy, transportation, and communications within the region has gradually improved. Financial cooperation among member countries has also taken shape.

In the Beijing summit that was just concluded, the SCO expounded its own views, in the form of a declaration on the current international and regional situation, as well as on hot issues including Afghanistan and Syria.

The relevant countries and international organizations in the region “must resolve regional affairs through consultation.” “If individual countries or groups of countries unilaterally improve their anti-missile systems without any restrictions, it will cause harm to international security and strategic stability.” “(We) oppose any military intervention or imposed ‘regime change.’” The world has paid significant attention to SCO’s clear attitude and solemn wording.

The collective voice of the SCO this time not only fully reflects the new security concept that it advocates – “mutual trust, mutual benefit, equality, and cooperation” – and further expands SCO’s international influence and discourse power, but it will also have a profound impact on the formation of the multi-polar world during the post-Cold War era and the global democratization process.

[1] Outlook, “SCO: A Wonderful Book,” June 11, 2012.
[2] Three Forces, or三股势力, China used this term to refer to terrorists, separatists, and extremists in Central Asia.
[3] Outlook, “The New Decade for SCO,” June 11, 2012.
[4] Outlook, “The Balance Power of the SCO,” June 11, 2012.