SCO SUMMIT 2022
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China is willing to work with Russia to take the global order “in a more just and reasonable direction,” Beijing’s top diplomat said, underscoring the depth of the two nations’ ties.
A Bloomberg report said:
Under the guidance of President Xi Jinping and President Vladimir Putin, “the relationship between the two countries has always been on the right track, and both sides firmly support each other on issues relating to their core interests,” Yang Jiechi told Russian Ambassador Andrey Denisov in a meeting in Beijing on Monday.
“The Chinese side is willing to work with the Russian side to continuously implement high-level strategic cooperation between the two countries, safeguard common interests and promote the development of the international order in a more just and reasonable direction,” Yang said, according to a Chinese Foreign Ministry statement.
Xi, Putin Set for First Meeting Since Beginning Of The Ukraine War
China has sought to present itself as a neutral party in Russia’s war, despite Xi’s declaration of a “no limits” partnership with Putin weeks before the attack. While Beijing has not explicitly criticized the war, its leaders have also avoided providing sanctions relief or military supplies to Russia.
Chinese exports of cars, televisions and smartphones helped Russia fill a void when foreign brands fled. In the second quarter, 81% of Russia’s new car imports were Chinese, and Xiaomi Corp. was Russia’s best-selling smartphone maker.
The Xi-Putin meeting would add to a flurry of diplomatic activity between Beijing and Moscow in recent weeks. China and India participated in major military exercises in Russia’s Far East, while Beijing’s No. 3. official Li Zhanshu spoke in person at the Seventh Eastern Economic Forum in Vladivostok last week.
In the meeting with Yang, Denisov said the relationship between the nations had yielded positive results, according to the Chinese Foreign Ministry statement.
China Gave Tens Of Billions To Vulnerable Nations, Emerging As World’s Major Creditor And IMF Competitor
In recent years, China has shelled out tens of billions in “emergency loans” for at-risk nations, indicating a shift to providing short-term emergency lending rather than longer-term infrastructure loans.
It’s a (largely) unforeseen development from Beijing’s $900 billion Belt and Road Initiative (BRI), launched in 2013.
Since 2017, Beijing has given a collective $32.8 billion in emergency loans to Sri Lanka, Pakistan, and Argentina, according to AidData, a research lab at William & Mary University that focuses on China’s global financing activities.
China has also offered emergency loans to Eastern European nations Ukraine and Belarus; South American countries Venezuela and Ecuador; African nations Kenya and Angola; alongside Laos, Egypt, and Mongolia. Chinese overseas lending and credit relationships remain “exceptionally opaque,” according to World Bank researchers. “Chinese lenders require strict confidentiality from their debtors and do not release a granular breakdown of their lending,” they wrote.
But researchers have found that the bulk of China’s overseas lending — around 60% — is now to low-income countries that are currently mired in debt distress, or at high risk of it. Beijing’s pivot to short-term rescue lending highlights its growing role as an emergency lender of last resort, rendering it an alternative to the Western-backed International Monetary Fund (IMF).
The report said:
“Beijing has tried to keep these countries afloat by providing emergency loan after emergency loan without asking its borrowers to restore economic policy discipline or pursue debt relief through a coordinated restructuring process with all major creditors,” Bradley Parks, AidData executive director, told the FT.
China has become the most important official player in global sovereign debt renegotiations, World Bank researchers say.
Gabriel Sterne, a former IMF economist and current head of global emerging markets and strategy research at Oxford Economics, told the FT that China’s emergency lending merely “postpones the day of reckoning” for debt-distressed nations that may be seeking out Chinese loans and avoiding the IMF, the latter of which “demands painful reform.”
In the past couple of weeks, both China and the IMF have inked, or moved closer to, bailout agreements for Sri Lanka, Pakistan, and other nations. Beijing, meanwhile, has pledged to forgive 23 interest-free loans to 17 African nations, and will redirect $10 billion of its IMF reserves to the continent.
The IMF has “zeroed in on cash collateral clauses in BRI loan contracts that give China a first priority claim on foreign exchange in borrower countries,” Parks said.
Some countries are already abiding by the tougher loan conditions. Pakistan, for instance, has “shared details with the IMF…in consultation with the Chinese side,” Muhammad Faisal, a research fellow at the Institute of Strategic Studies Islamabad, told the SCMP.
Xi Heads Abroad To Promote Strategic Role
Chinese President Xi Jinping will attend the 22nd meeting of the Council of Heads of State of the Shanghai Cooperation Organization (SCO) in the city of Samarkand, Uzbekistan, in his first foreign visit since the COVID-19 pandemic, and inject more Chinese wisdom to the SCO which remains cohesive and attractive to potential new members by advocating equity, justice and true multilateralism in a turbulent and divided world.
An AP report said:
Xi Jinping is using his first trip abroad since the start of the pandemic to promote China’s strategic ambitions at a summit with Russia’s Vladimir Putin and other leaders of a Central Asian security group.
The Chinese leader is promoting a “Global Security Initiative” announced in April following the formation of the Quad by Washington, Japan, Australia and India in response to Beijing’s more assertive foreign policy. Xi has given few details, but U.S. officials complain it echoes Russian arguments.
Xi, 69, is due to meet Putin in Uzbekistan this week at a summit of the eight-member Shanghai Cooperation Organization, which also includes Uzbekistan, India and Pakistan.
Opposing Western Practice
“China and Russia share the same stance in opposing the Western practice of imposing sanctions and overthrowing regimes of other countries,” said Li Xin, director of Shanghai University of Political Science and Law’s Institute of European and Asian Studies.
Xi’s government has refused to criticize Putin’s attack on Ukraine. It accuses the United States of provoking the conflict.
Xi has participated in other global gatherings by video link. His only trip outside the Chinese mainland since early 2020 was a one-day visit to Hong Kong to mark the 25th anniversary of the end of British colonial rule.
Other SCO governments are Kazakhstan, Kyrgyzstan and Tajikistan. Iran and Afghanistan are observers.
“The Shanghai Cooperation Organization is attracting more countries with a new principle that is completely different from the West in handling relations between nations,” Li said.
China sees the group, founded under Xi’s predecessor, Hu Jintao, as a counterweight to U.S. alliances across East Asia to the Indian Ocean. Beijing has taken part in multi-government military exercises, showing off its fast-developing forces.
At a July meeting, China’s Foreign Minister Wang Yi told his Russian counterpart Sergei Lavrov, that China would “strengthen strategic communication” with Moscow about international security, according to a statement by the Chinese Ministry of Foreign Affairs.
That will “show the basic momentum of China-Russia comprehensive strategic partnership” and “practice true multilateralism,” the ministry statement said.
The SCO summit in Samarkand will be the first in-person summit since June 2019 when leaders met in Bishkek, Kyrgyzstan. Russian President Vladimir Putin, Pakistan Prime Minister Shehbaz Sharif, Indian Prime Minister Narendra Modi and Iranian President Ebrahim Raisi are among leaders expected to attend.
According to Chinese Foreign Ministry spokesperson Hua Chunying, Xi will also pay state visits to Kazakhstan and Uzbekistan from September 14 to 16 at the invitation of the presidents of the two countries.
First foreign visit
The SCO, the first international organization named after a Chinese city, has a unique significance in China’s diplomacy as it includes China’s neighbors, regional powers, key BRI partners and plays an important role in coordinating regional affairs, observers said.
At a time when China is summarizing its achievements made in the past 10 years and is ready to embark on a new journey of great rejuvenation, the Central Asia trip and the summit of a Eurasian-spanning organization composed of countries of different development paths, systems and cultures, will be an ideal occasion for China to present its wisdom in development and international relations and make contributions to the world, analysts said.
Choosing the SCO summit as the destination of his first foreign visit since the pandemic demonstrates the great importance Xi attaches to the SCO and China’s focus on neighborhood diplomacy, Li Ziguo, a senior research fellow with the China Institute of International Studies, told the Global Times on Monday.
Wang Yiwei, director of the Institute of International Affairs at the Renmin University of China stressed that the SCO, accounting for 41 percent of the world’s population and 24 percent of global GDP, and which keeps attracting more countries to join, is set to play a pivot role in interpreting and showcasing new forms of international relations, new forms of international organizations, and depicting new forms of human civilization.
Zhang Hong, an Eastern European studies expert from the Chinese Academy of Social Sciences (CASS), said Xi’s trip and attendance at the SCO summit will serve as a new booster for cooperation with Central Asian and South Asian countries to develop further, and push forward the BRI.
Given the complexity of international and regional situations, the SCO’s development is an important pillar supporting true multilateralism and win-win cooperation, and the establishment of a new, democratic, just and rational political and economic international order, the expert said.
Kazakhstan is the place where Xi first proposed the Belt and Road Initiative (BRI) in 2013. As of today, over 140 countries spanning different regions, cultures and stages of development, and more than 30 international organizations, have signed BRI cooperation documents with China, the Xinhua News Agency reported.
According to official data, China’s trade with BRI economies jumped 20.2 percent in the first eight months of 2022 compared to the same period last year.
Eight countries enjoy the status of full SCO membership: China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Pakistan and India; four countries – Afghanistan, Belarus, Iran and Mongolia – have observer status, and six countries – Azerbaijan, Armenia, Cambodia, Nepal, Turkey, and Sri Lanka – have dialogue partner status.
One of the key agendas for the Samarkand summit is enlarging the membership. The heads of SCO states will adopt a memorandum of obligations for Iran to receive SCO membership. The SCO has also received Belarus’ application and admission procedures could begin at the summit in Samarkand.
Saudi Arabia, Qatar, Egypt
Saudi Arabia, Qatar and Egypt will formally become SCO dialogue partners with the signing of relevant documents and negotiations will be held on granting Bahrain, the Maldives and other states’ the status of dialogue partner.
Li said that against the backdrop of major changes in international relations, the enlargement of the SCO fully demonstrates that current members and pending partners recognize the organization and its guiding Shanghai Spirit.
Championing mutual trust, mutual benefit, equality, consultation, respect for diverse civilizations and pursuit of common development, the SCO creates a sphere of fair and just cooperation and sets a model of a new type of international relations with win-win cooperation at the core, Li noted.
At the international level, more members mean stronger voices in global governance. When conflicts and uncertainty create havoc in the world, it is noteworthy that the SCO has cast aside the Cold War mentality, concepts such as the clash of civilizations and superiority of certain civilizations, but upholds non-confrontational principles and maintains cooperation that does not target third parties, experts said.
Against the backdrop of sweeping Western sanctions against Russia, China-Russia trade jumped 31 percent year-on-year from January to August to $117.2 billion and the two just agreed to a switch in gas payment currencies from the U.S. dollar to the Chinese yuan and Russian ruble.
On India, Zhang said he expects a further easing of the China-India border tension through effective communication of the leaders with strategic visions. There are positive signs as the two sides just conducted a fourth round of disengagement after being in stalemate for over a year, the Hindustan Times reported Monday.
Though the SCO is more focused on security issues, observers share the consensus that the bloc has a great economic potential with more and more states of various economic structures set to join as members or partners.
Li believes the wider participation of Middle Eastern states as well as emerging manufacturing countries means the SCO has large energy consumption needs and strong supply chains, possibly changing the landscape of the energy industry in the region.