Samarkand calling

Shanghai Cooperation Organization (SCO)

Samarkand, that legendary fabulous city by ancient Silk Road in Uzbekistan is calling again. This time the state heads of SCO (Shanghai Cooperation Organization) were gathering in their summit, the 22nd meeting of the Council of Heads of State of the SCO in September 15 – 16, which appears to be exceptionally important in the current turbulent situation.

The SCO summit saw the leaders of 15 nations convening in Uzbekistan, which is hosting the gathering this year. The venue in the ancient city of Samarkand is quite fitting. It is one of the oldest cities in Asia and was a key hub in the centuries-old Silk Roads for trade and human interaction.

For those, not so well-acquainted with the Organization, here short SCO info in the nutshell:

SCO was announced on June 15, 2001 and its charter was entered into force on September 19, 2003. The present member states of SCO account for 40 percent of the world’s total population, for over 60 percent of the Eurasian landmass and over 20 percent of global GDP.

The SCO is focusing on following goals among the member states: strengthening mutual trust and neighbourliness; promoting their effective cooperation in politics, trade, economy, research, technology and culture; making joint efforts to maintain and ensure peace, security and stability in the region; seeking fair and rational new international political and economic order. A strategic partnership of China and Russia has enabled the two countries to facilitate and advance various measures within the SCO. The two leading countries as the twin engines of the SCO have led efforts to safeguard regional security and advance economic development within the framework of the SCO.

Founding member states were six: China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan. In 2017 two new members were accepted; India and Pakistan and number of member states went up to eight. In 2022 summit two states were accepted in process of accession to member state, namely Iran and Belarus.

The second group is “observer states”: Afghanistan and Mongolia. The following 14 states are so called “dialogue partners”: Armenia, Azerbaijan, Bahrain, Cambodia, Egypt, Kuwait, Maldives, Myanmar, Nepal, Qatar, Saudi Arabia, Sri Lanka, Turkey, UAE.

Turkish President Recep Tayyip Erdogan, speaking after the summit of the SCO in Samarkand, declared Ankara’s wish to become the SCO’s full member. “Now our next process will be steps towards this end. This is our goal,” he said.

The meeting of the SCO Ministerial Council in Tashkent in early August involved some very serious items. It was the key preparatory meeting before the SCO summit in Samarkand. Russian FM Lavrov wrapped up main themes on the path towards Eurasian integration: Interconnectivity and “the creation of efficient transport corridors”; Drawing “the roadmap for the gradual increase in the share of national currencies in mutual settlements.”

The results of the Samarkand summit can be wrap up in following way: SCO grows, enlarges and strengthens in members, numbers and assets, while Russia and China boost their ties in response to US policies in Ukraine and Taiwan. Plenty of significant sideline meetings were organized as well as prominent cooperation and economic deals and agreements were signed, including political “Samarkand Declaration”.

Items of the Summit

Western mainstream media (MSM) appears to leave unnoticed the factual significance of the SCO summit, just Xi – Putin meeting was the issue rising over the news threshold of western MSM.

The meeting was especially strategic as it was the first such meeting featuring Iran as full member and Belarus on the fast track to join in the short term. Some other, regionally very important countries have indicated their willingness of becoming full members like Turkey, UAE, Qatar and Saudi Arabia.

The SCO is the most tangible expression of the emerging multipolar world. Its founding tenets are based on mutual dialogue and cooperation in respect of international law and inalienable national sovereignty. The themes in discussions of the SCO Summit were broader multipolar alliance, common security and coordination of action towards improving the conditions of life of peoples and sovereign nations as outlined by the UN Charter.

Samarkand Declaration, signed by the participants, which account for over half of the world’s population, indicates that the participating countries are no longer going to defer to the US.

The speeches by Russia’s Vladimir Putin and China’s Xi Jinping are especially noteworthy. Both countries put the US on notice that the US and NATO will be treated as a sponsor of terrorism because they supply weapons to Ukraine that are being used to attack civilian targets.

Russia and China also put the west on notice that Iran is no longer going to be treated as a pariah state. Iran is welcomed by both Putin and Xi as a member of the SCO. Going forward, this means that Iran will do business with all members of the SCO under the rubric of a new financial order being organized by Russia, China, India and Brazil. Sanction policies of the western block are now backfiring and the process of de-dollarization got some new impetus going further in dethroning the status of US dollar reserve currency.

China and Russia strongly affirmed that the US is no longer a reliable, trustworthy partner. The leaders of the SCO realize that Washington is leaderless, when observing and comparing the performance and personal conduct of Biden versus those of Xi and Putin.

President Xi’s speech

Chinese President Xi Jinping delivered an important speech on Friday at the summit emphasizing the need to follow the guidance of the Shanghai Spirit as forging ahead. The SCO should keep itself well-positioned in the face of changing international dynamics, ride on the trend of the times, strengthen solidarity and cooperation and build a closer SCO community with a shared future. Xi’s five thesis for the SCO future were:

First, we need to enhance mutual support.

Second, we need to expand security cooperation.

Third, we need to deepen practical cooperation.

Fourth, we need to enhance people-to-people and cultural exchanges.

Fifth, we need to uphold multilateralism (the UN-centered international system and the international order based on international law).

Finally, Xi expresses China’s congratulations to India on assuming the next SCO presidency.

President Putin’s speech

He shares the statements and positive assessments of the work of the SCO and its growing prestige in international affairs. The SCO has become the largest regional organization in the world. Global politics and economy are about to undergo fundamental and irreversible changes. The growing role of new centers of power is based on the universally recognized principles of the rule of international law and the UN Charter.

The joint efforts of SCO member states are based on these principles in politics and the economy. The US has controlled the international game but the countries of the SCO are no longer going to let the US dictate where, when and how the game is played.

Fighting terrorism and extremism, drug trafficking, organized crime and illegal armed formations remains a priority of our cooperation.Other key areas include providing assistance in the political and diplomatic settlement of conflicts along our external borders, including in Afghanistan. Russia favours the earliest possible accession of the Islamic Republic of Iran and support also the full membership of Republic of Belarus.

After the summit, Putin also held the press conference dealing with Ukraine, terrorism, fertilizers and Europe’s energy crisis.

Samarkand Declaration

At the summit, leaders of the SCO member states signed the Samarkand Declaration, expressing their unanimous attitude of ruling out bloc, ideologically charged and confrontational approaches to current international and regional development issues and reaffirming the importance of promoting cooperation in the development of international relations of a new kind in the spirit of mutual respect, equality and mutually beneficial cooperation, as well as in building a community with a shared future for mankind.

The Declaration underlined also the Afghan issue, which fully demonstrated the great importance the SCO has attached to Afghanistan. The Afghan issue is definitely the main concern of the SCO, given its member states’ geographic positions, as well as the purpose of the group itself. The situation of Afghanistan will certainly affect the security and stability of these countries. 

In this process, China’s role is central. In 2013, President Xi for the first time proposed the initiative to jointly build the Silk Road Economic Belt. Years later, the Belt and Road Initiative (BRI) has already yielded fruitful results in Central Asia. The Global Development Initiative (GDI) and Global Security Initiative (GSI) put forward now by the Chinese leader were a response to the concerns of regional countries.

Meetings in the sidelines

China – Russia meeting

President Vladimir Putin and his Chinese counterpart Xi Jinping held a much-anticipated bilateral meeting on the sidelines of the summit of the SCO. Both Russia and China see the SCO summit as a major indicator of unity and defiance in the face of threats coming from the US-led political West.

The two presidents concluded that the unipolar world order in which the US is the dominant power has come to an end. The leaders discussed the geopolitical circumstances in Ukraine and Taiwan. Russia’s leader praised the SCO as a counterbalance of constructive and creative cooperation emphasizing the fact that majority of the world’s population is seeking to resist the US unipolar world order.

Chinese leader re-affirmed his understanding both of the historical moment now shaping the world and also the vital role he understands both Russia and China must play in navigating humanity through this storm. Russian President reiterated to his Chinese counterpart that “We highly value the balanced position of our Chinese friends regarding the Ukrainian crisis, we understand your questions and concerns on this matter and during today’s meeting we will of course clarify all of these in detail.”

While the SCO meeting was held in Samarkand, Russian and Chinese navies conducted joint patrols and military exercises in the Pacific Ocean and before that China participated in Vostok-2022, a Russian large-scale military exercise in the Russian Far East. Mentioning China’s most sensitive security and geopolitical challenge, which involves direct US meddling in Beijing’s internal affairs, Putin also addressed the issue of Taiwan, telling Xi: “We firmly adhere to the One China principle in practice. We condemn the provocations of the US and its satellites in the Taiwan Strait.” China is ready to work with Russia in extending strong support to each other on issues concerning their respective core interests, Xi said to Putin during their meeting.

The two leaders didn’t only focus on geopolitical challenges but pledged to deepen and enhance economic cooperation between the countries. Trade exchange has already hit a new record high up to $ 147 million in 2022, at a growth rate of 25% within the first seven months of this year. Putin once again reiterated the importance of deeper economic ties between the two countries and told China’s leader that the annual trade turnover will increase to $200 billion or more. In early September, Gazprom said it had signed an agreement with China to start payments for gas supplies to China in yuan and rubles instead of US dollars.

For his part, Xi Jinping firmly agreed that the US-led unipolar world order is finally unraveling and further explained that “in the face of the colossal changes taking place on a global scale in our time which are unprecedented in history, we are ready, together with our Russian colleagues, to show an example of a responsible world power and to play a leading role in bringing such a rapidly changing world onto a trajectory of sustainable and positive development.”

Both leaders see the SCO summit as a major indicator of unity and defiance in the face of threats coming from the US-led political West. Although the organization is not exactly a counterpart to NATO or the EU, it does provide a functioning security, economic and geopolitical framework for many countries across the vast Eurasian landmass. In this regard, the meeting, which also saw Iran sign a Memorandum of Obligations to become a permanent member, was successful. In addition, this was Xi Jinping’s first foreign trip in almost three years, since the COVID-19 pandemic started, which further solidifies the importance of the summit.

China, Russia, Mongolia – a trilateral meeting

The presidents of China, Russia and Mongolia held a trilateral meeting (Xi Jinping, Vladimir Putin and Mongolian President Ukhnaa Khurelsukh) on the sidelines of the SCO summit, during which the leaders agreed to move forward major projects in infrastructure and energy supply and continue to deepen trilateral economic cooperation. 

The three leaders agreed to activate the Mongolian section of the China-Russia natural gas pipeline known as Power of Siberia 2. The final deal of the project would close in the near future. The new pipeline is designed to transport annually 50 billion cubic meters of gas from Russia to China through Mongolia. Asked by reporters, if the Power of Siberia 2 pipeline aims to replace Nord Stream 2 within Russia’s energy strategy, Russian Energy Minister Novak said “yes.”

Xi made a four-point proposal on enhancing China-Russia-Mongolia cooperation, including to deepen political mutual trust and support, upgrade cooperation within the framework of the China-Mongolia-Russia Economic Corridor (upgrading and development of the central-route railway of China-Mongolia-Russia) and activate the project in the Mongolian section of the China-Russia natural gas pipeline. The Economic Corridor is an important part of the Belt and Road Initiative.

The Chinese president proposed more trilateral cooperation and supporting the expansion of settlement in local currencies in mutual trade. Russian and Mongolian financial institutions are welcome to join the RMB Cross-border Interbank Payment System to build a strong bulwark of financial security in the region.

President Xi Jinping’s visit to Uzbekistan and Kazakhstan

Xi’s choice to visit Kazakhstan and Uzbekistan and participate in the SCO summit in person indicates Beijing appears to be currently more focused on domestic stability concerns, border issues and insufficient energy and food supplies, instead of wide-range international power politics.

On the other hand, official China see President Xi’s trip to Central Asia as a strategic move to break US’ “encirclement” of China by expanding the “circle of friends” in the SCO context demonstrating Xi’s confidence and influence, while indicating the further strengthening of China’s international status and influence.

In just three days from Wednesday to Friday, President Xi paid state visits to Kazakhstan and Uzbekistan, attended the SCO summit, met with leaders of a number of countries including Russia, and participated in the sixth meeting of heads of state of China, Russia and Mongolia.

Russia – India meeting

Bilateral meeting of President Putin and Prime Minister Narendra Modi was described as cordial. Discussions focused on trade, economy and energy. Meanwhile, the State Bank of India will be opening special rupee accounts to handle Russia-related trade.

Russia assured to do everything to make the conflict in Ukraine end as soon as possible, Putin said during his meeting with Prime Minister Modi. The Russian leader also assured that he will keep the Indian partners informed about the situation in Ukraine. Putin noted that Russia and India actively cooperate on international platforms, discussing all situations in the world, including troubled ones.

Russia – Iran meeting

Bilateral meeting of President Putin and President Ebrahim Raisi focused on JCPOA on Iranian nuclear program and bilateral issues. Putin announced his contentment on Iran’s membership to SCO. Economic cooperation, trade and the use of national currencies in bilateral trade were main topics of the meeting.

Some key economic deals and other agreements

On the sidelines of the SCO in Samarkand, the leaders of China, Russia and Mongolia agreed to actively push the construction of the Mongolian section of the China-Russia natural gas pipeline, Power of Siberia 2.  The construction of the Russian-Chinese natural gas pipeline transiting through Mongolia will begin in 2024. The pipeline will deliver previously Europe-bound gas from western Siberian fields to China for the first time and has a target date of being online in 2030.

Russian Energy Minister Alexander Novak said the current Power of Siberia 1 pipeline’s supply would reach 20 billion cubic meters this year. Novak also said Russia and China had decided on the construction of a new route from Vladivostok to the north of China, which can transport 10 billion cubic meters of gas per year. The current Power of Siberia 1 gas pipeline has been divided into three sections: the northern section from Heilongjiang’s Heihe to Changling in Northeast China’s Jilin Province; the middle section from Changling to Yongqing in North China’s Hebei Province; and the southern section from Yongqing to East China’s Shanghai. The northern section was put into use in 2019 and the middle section in 2020. The southern section is under construction and is expected to be completed and put into operation in 2025.

As noticed already in Tashkent (FM Lavrov), there are two key issues in Eurasian integration: Interconnectivity and the creation of efficient transport corridors. Uzbekistan is especially supporting the China-Kyrgyzstan-Uzbekistan-Afghanistan railway.

The other one in the making is based on Russia-Iran-India agreement (signed in 2000) regarding the International North South Transportation Corridor (INSTC). This is the shorter and cheaper Eurasian trade route via the Caspian Sea (compared to the Suez Canal). The INSTC in full operational mode signals a powerful hallmark of Eurasian integration – alongside the Belt and Road Initiative (BRI), the Shanghai Cooperation Organization (SCO) and the Eurasian Economic Union (EAEU). Caspian Sea is the key element here as it is connected to the Black Sea by canals off the Volga. A complex and multifaceted pipeline/oil/gas – game is going in Central Asia combined with construction of colossal transport corridors.

Russia and China may be the leading investors in the SCO area but now Iran also plays an important role. Over 1.200 Iranian companies are working in Central Asia. A group of Central Asian banks are working in the SCO interbank consortium. Partners have used “a credit line from the Bank of China” and are now to sign a road map for the transition towards the use of national currencies in regional trade.

Partners see that close cooperation between India and China is necessary. They can make the Asian century happen. India fully supports the INSTC corridor as well not only supports the Russian concept of Greater Eurasia Partnership but is engaged in setting up a free trade agreement with the EAEU. All players will be gradually changing to trade in bilateral currencies and creation of transit corridors is leading to the progressive integration of national transit systems.

Closing words of the summit

The biggest takeaway of the Samarkand summit is that Chinese President Xi Jinping presented China and Russia together as “responsible global powers” determined on securing the emergence of multipolarity and refusing “the rules-based order” imposed by the US.

Xi went straight to the point: it is important to “prevent attempts by external forces to organize color revolutions in the SCO countries. Europe wouldn’t be able to organize anything, because it has been color-revolutionized non-stop since 1945. The US is the real culprit.”

Putin, for his part, sent a message that will be ringing all across the Global South: “Fundamental transformations have been outlined in world politics and economics and they are irreversible.”

Extra addition – Patrushev’s express visit to China after SCO summit

Nikolai Patrushev, the Secretary of the Security Council of the Russian Federation, spent two days in China (September 18.-19.), where he met with Chinese colleagues in two areas:

  • for strategic stability — Yang Jiechi, head of the Foreign Affairs Commission of the Communist Party of China
  • for public security and law and order — member of the Politburo of the CPC Central Committee, secretary of the Central Political and Legal Committee Guo Shengkun

Obviously, the meetings were held as part of the implementation of the decisions reached as a result of the bilateral meeting between Vladimir Putin and Xi Jinping at the SCO summit in Uzbekistan. The Putin-Xi meeting ended on September 15, and Patrushev’s visit followed immediately afterwards. This speaks to the importance of the problems that Russia and China are currently facing. Russia and China cooperate closely in such important areas as national security, struggle against terrorism, drug trafficking and struggle against transnational crime.

The high-level strategic interactions between China and Russia reflect the stable cooperation and mutual trust of the two countries in the security field, which is of regional and global significance amid the current instability and uncertainty cross the world. 

The parties agreed to “expand the exchange of information on countering extremism and foreign attempts to undermine the constitutional order of both countries in order to undermine the independent policy of Russia and China in the service of their national interests.”

The parties agreed that the United States was escalating tension in the Asia-Pacific region and confirmed to continue military cooperation, including joint military exercises and joint patrols against the background of the US’s pledge to defend Taiwan in the event of China’s possible invasion of the island. Russia is ready to provide military assistance to China in the event of US aggression in the Asia-Pacific region.

This seems to be something bigger than just cooperation. This begins to look like “a pre-party before full-fledged cooperation” in the event of hostilities in Southeast Asia. The main results of Patrushev’s visit might be:

  • Patrol operations for the creation and development of “corridors” for trade traffic in the potential water area of ​​the Taiwan conflict to protect shipping
  • Deepening coordination between general staffs in the event of a conflict
  • Joint coordination between Russia and China of the global agenda

The speed by which the meeting was organized, suggests a sharp escalation of the global military-political situation and corresponds to requests from the Chinese side.

One further notice

China – Russia recent meetings at many levels and in many important aspects, as well as numerous recent military exercises, may put some alarm bells ringing.

Why did Patrushev visit Beijing only a couple of days after Putin and Xi met each other’s face to face.

Readers should remind themself of Putin-Xi meeting in early February and what happened soon afterwards.

The timing of these meetings is interesting, because the prime season for a potential Chinese invasion of Taiwan is fast approaching (October is the best month for naval movements to avoid typhoons). China would not necessarily need to commit to a ground invasion, either. They organize a naval blockade, by simply cut off all import/export trade from any source other than China and starve Taiwan until they accept re-unification.

There may also be an issue of the US & NATO massive arms supply to Ukraine, which has depleted the stockpiles of munition and other military material and equipment in the West.

Russia may be seeking to ensure China remains a steady economic partner should geopolitical pressures increase. They may even be making a deal of mutual support: China takes Taiwan while Russia divides Ukraine and takes best parts of it and they each support the other economically, when NATO counties try to impose more sanctions on China and Russia.

China’s ruling Communist Party will hold its five-yearly congress beginning on October 16, with Xi Jinping poised to secure a historic third leadership term and cement his place as the country’s most powerful leader since Mao Zedong. Before that congress, no major foreign political decisions / operations will be made in China but what happens after the congress… that is the real question.

Anyway, China is preparing to go to war and it is not trying to hide its efforts. Amendments to the National Defense Law, effective the first day of last year, transfer powers from civilian to military officials. In general, the amendments reduce the role of the central government’s State Council by shifting power to the CMC, the Communist Party’s Central Military Commission. Specifically, the State Council will no longer supervise the mobilization of the PLA.

Last month, Chinese entrepreneurs making medical equipment for consumers said that local officials had demanded converting production lines so that they could turn out items for the military. Moreover, Chinese academics privately say the ongoing expulsion of foreign colleagues from China’s universities appears to be a preparation for hostilities.

China’s global dominance in imports/exports gives them considerable economic leverage in trade and global business. Many nations would not support sanctions against China. Also, their vast holdings of US dollars and Treasury Bonds could be used as a weapon to damage or destroy the dollar’s world reserve status.

If China invades Taiwan within a year, China may start with the massive selling of US Treasury Bonds, which will collapse the value of bonds and skyrocket the interest rate in the US, by this operation destroying the US economy and at the same time making “the Great Reset” worldwide.