Li promotes SCO bank, free trade
By HU YONGQI and WANG QINGYUN in Beijing | China Daily
Li promotes SCO bank, free trade
The six-member Shanghai Cooperation Organization on Thursday proposed to advance the establishment of a development bank and fund to boost financial cooperation.
The proposal was signed by member countries at the 15th meeting of the heads of government of the group, which consists of China, Russia, Kyrgyzstan, Kazakhstan, Tajikistan and Uzbekistan.
Premier Li Keqiang, attending the meeting, also said China is open to the establishment of a free-trade zone among the SCO members.
He called on SCO members to continue promoting investment and trade, as well as initiating feasibility studies for a free-trade zone.
“Member countries should break restrictions in the economy and trade by establishing a free-trade zone to expand wider-scale exchanges in this field,” Li said.
A list of 38 “pragmatic measures” was approved at the meeting to govern cooperation in fields such as finance, transport and agriculture from 2017 to 2021.
Experts said these proposals showed that SCO is moving beyond traditional concerns like fighting terrorism, separatism and extremism to promote pragmatic cooperation in economic topics.
The six members cover 30 million square kilometers with about a quarter of the world’s total population. It is working on legal procedures to grant India and Pakistan membership.
Ruan Zongze, vice-president of the China Institute of International Studies, said the SCO meeting is to help deepen economic cooperation and carry out projects in transport, production capacity and other fields.
Chen Yurong, an expert on the region’s economy at the China Institute of International Studies, said the SCO members are in dire need of an FTA mechanism to boost their economies, while the group also has the necessary conditions for the establishment of an FTA.
Chen also said that the establishment of a development bank and fund will help break the bottleneck in development capital, and help realize many projects that the countries are planning.
Kazakh Prime Minister Bakhytzhan Sagintayev said the SCO needs to promote effective economic cooperation to stabilize their economies, and Kazakhstan would like to link up with China’s Belt and Road Initiative and the Eurasian Economic Union, a Russia-dominated initiative.
After the meeting, Premier Li departed from Bishkek for Kazakh capital Astana to attend the 3rd Regular Meeting between Chinese and Kazakh Prime Ministers.
China Suggests Free Trade Zone For the SCO
Premiers from across Eurasia were in Bishkek this week for the Shanghai Cooperation Organization heads of government meeting. Chinese Premier Li Keqiang reportedly said China was ready to discuss a free trade zone among the members. Judging from Russian Prime Minister Dmitry Medvedev’s comments, however, not all the SCO countries are so gung-ho.
These routine get-together have routine outcomes — X number of agreements signed, re-commitments to the “Shanghai Spirit,” and boilerplate statements about the threat of terrorism — but there is always the sideline and the sub-tones, the underlying issues that are up for discussion or in contention among the members.
At a time when Russia and the Eurasian Economic Union seem to be fencing in Eurasia (with China on the outside of the fence), a free trade zone via the SCO would be quite a departure.
Perhaps that’s why Medvedev’s statement at the heads of government meeting highlighted the difficulty. Medvedev, of course, said that the SCO needs to “develop all possibilities for economic cooperation, establish favorable conditions for the movement of goods, labor, services and investment, form added-value chains and enter markets abroad – in each other’s countries and beyond.” But he then went on to add:
The transition to a preferential trade regime within the SCO is a complicated matter given that any preferential regime always requires renunciation of internal decisions of one kind or another. We have agreed to continue our work in this area. All member countries’ business and financial communities should be fully involved in this work, primarily through the SCO Business Council and Interbank Association.
Li had a different outlook. “We are open to cooperation and ready to discuss the creation of a free trade zone. This will help to remove trade barriers. They hinder the development of countries and the world economy,” he said, according to 24.kg, a Kyrgyz news site.
An op-ed that appeared in China’s Global Times on November 1 presaged that the SCO would tackle the issue of a free trade zone at the meeting the next day. Various Chinese experts said the free trade zone would be the highlight of the meeting:
The meeting will likely promote the establishment of an SCO free trade zone and enhance industrial production capacity cooperation between SCO members, He Weiwen, a senior research fellow at the Center for China and Globalization, told the Global Times.
He stressed that by establishing a free trade zone, trade would be also greatly facilitated between countries along the One Belt and One Road route in Central Asia and the Gulf region.
While free trade did make it into Chinese media summaries of the meeting, security was the headline item.Given that two months ago a suicide bomber attacked the Chinese Embassy in Bishkek, the focus on security was far from surprising. As Joshua Kucera detailed for EurasiaNet, the version of events laid out in Chinese media depicts Beijing taking charge, “and a Kyrgyzstan which was trying to keep China happy.” Kucera notes recent developments in the case have done little but cloud the picture further.