The SCO and China’s Third Phase
No. 1 2016 January/March
Vitaly Vorobyov

A senior research fellow at the Center for East Asia and SCO Studies at the Institute of International Relations (MGIMO). He is also Ambassador Extraordinary and Plenipotentiary.

The Shanghai Cooperation Organization in a New Setting

What has the Shanghai Cooperation Organization (SCO) done to benefit its operation over the past fifteen years? During this time the SCO has experienced vigorous and extensive growth. It has launched a variety of diversified mechanisms intended to promote concerted action along three main lines—security and stability, trade and economics, and culture and humanitarian affairs. While the SCO has not been as effective in all of these spheres as it planned initially, its geographic expansion has been unexpectedly rapid. In addition to six founding states (Kazakhstan, Kyrgyzstan, China, Russia, Tajikistan, and Uzbekistan), the SCO now includes six observer countries (Afghanistan, Belarus, India, Iran, Mongolia, and Pakistan) and six dialogue partners (Azerbaijan, Armenia, Cambodia, Nepal, Turkey, and Sri Lanka). The SCO has won wide international acclaim, of which its observer status at the UN General Assembly is unmistakable evidence.

In formal terms, the SCO has firmly established itself as an independent interstate regional agency. The SCO Development Strategy up to 2025 adopted at the Ufa Summit in July 2015 is clear proof that the formation stage is over. The thoroughly worded Strategy has fixed the organization’s current status quo and identified fundamental benchmarks to follow. The document envisages an inertial evolution scenario, rather than innovative development. There is nothing reprehensible about this choice because the main emphasis is placed on measures to improve the quality of the SCO’s diversified activities (which is essential for a young organization), raise its international standing, and increase the efficiency of all of its agencies and mechanisms. Time will show what amendments are necessary, but some major challenges are already looming on the horizon.

Ready for Expansion

Although briefly mentioned in the Strategy, there is one completely new factor about the SCO that warrants attention. In addition to the Strategy, the Ufa Summit agreed on a far-reaching decision: the SCO’s core will not remain unchanged indefinitely, but will grow and incorporate new members. Special reference was made to a provision in the SCO Charter that the organization is open to new members. Importantly, the interpretation of this provision has been expanded. The first signs that such a transformation might be possible were evident a decade ago, but it was decided then to postpone the consideration of applications, let alone the admission of new members. The SCO was still finding its feet then and the adoption of rules and procedures, practically nonexistent in its original regulations, required thorough scrutiny.

Two belts emerged around the SCO’s core (which had rightly devoted several years to internal consolidation)—that of observer states and of dialogue partners. These two groups and fresh applications from other countries were regarded as a clear sign that the SCO was gaining appeal. However, up to a certain point all relations with those other countries had been confined to official protocol contacts. At the Ufa Summit a different trend manifested itself when Belarus was upgraded to an observer country. The dialogue partner status was granted to Azerbaijan, Armenia, Cambodia, and Nepal. It looks like the group of SCO sympathizers has good prospects for continued and unlimited expansion. Ever more, potential candidates have displayed the wish to join. The official vocabulary has even incorporated a rather broad term: “the SCO family” (which in some respects smacks of propaganda and self-advertising).

The Ufa agreements on the launch of procedures for accepting India and Pakistan as full-fledged SCO members are not just evidence that the organization’s next phase of development will be somewhat different. In fact, they give the green light to far more substantive, radical, and far-reaching changes. Essentially, the SCO may assume a different quality, while retaining the same institutional configuration and functions. The decisions regarding India and Pakistan have set a precedent and more aspirants will be eager to follow. The current admission requirements for new members are not very strict politically. The list of the organization’s members is unlimited. All newcomers instantly get the same rights as the founding states.

So now the SCO should not choose whether or not to extend the list of its full members, but decide strategically on how far it can afford to go, without letting its main focus on Central Asian issues be shifted elsewhere. Any, even de-facto, attempts at changing the SCO’s default rules will naturally annoy and provoke objections from Central Asian member-states, for such moves may shake the very foundation of the organization. In any case, there is an urgent need to establish a uniform understanding among SCO members of what the organization’s critical measure of expansion may be without running the risk of collapsing from overweight or growing to some kind of gigantic association distant from its original goals.

Integrating new components to a streamlined, well-operating system always entails problems of mutual adjustment and is fraught with the possibility of upsetting functional harmony, increasing the sluggishness of day-to-day operations, and, most importantly, impeding decision-making on critical issues. New interests may jeopardize the SCO’s fundamental rule of consensus. In fact, those interests are very likely to be sporadically declared and systematically promoted. A consensus will inevitably be harder to reach, although it may also contribute to improving the art of concerted decision-making.

Regardless of subjective wishes, the emerging unusual situation cannot but breed problems and rifts, even if the reasons for them look insignificant at first sight. For instance, difficulties may arise in expressing nuances of opinion in different languages due to different standards of formulating ideas, vocabulary, and grammar structure, as well as the accuracy of translating into Russian and Chinese. The use of these two languages is one of the SCO’s core principles and should be preserved by all means.

Very important in the long term is the achieved understanding that obtaining SCO membership is not a one-time action, but a process that applies certain political criteria. This explains why the Ufa Summit refrained from a decision on Iran. Finalized and adopted by the six heads of state in 2014, the package of documents identifies the content and procedure of admission. Its duration will depend chiefly on how much time it will take an applicant country—in compliance with its own legislation—to join all of the SCO’s multilateral agreements, which now number three dozen. Also, there are seemingly technical, but in fact essential and sensitive, issues that will have to be settled. These include the amount that newly-admitted SCO members must contribute to the organization’s budget and the related quotas for personnel they delegate to SCO permanent agencies—the Secretariat in Beijing and the Executive Committee of the Regional Anti-Terrorist Structure in Tashkent (RATS).

In terms of configuration and bureaucratic routine, SCO permanent agencies are best tailored to suit the six-party format. But for the RATS executive readjustment will not be as easy. The organization’s staff are not career diplomats, but experts delegated by relevant agencies, with each of them exercising their own rules and procedures, specifically as regards access to and exchange of confidential information. The Secretariat is only learning how to use the available powers and opportunities. At this point it still falls short of operating as a functional integrator and a monitoring coordinator for all SCO activities. Soon it might be appropriate to focus on retuning the Secretariat’s operation in line with the SCO’s current imperatives and future challenges.

Whatever the current faults, which are quite natural for a young but fast-growing organization, its permanent agencies have developed one very precious feature that should be preserved and supported, as SCO performance over these years has convincingly proved. That feature is the positive experience and skills of maintaining day-to-day friendly contacts between representatives of SCO member-states, regardless of the momentary ups and downs in their relations, different religious views, and contrasting cultures and lifestyles.

Devising a mode of tight interaction with the observer states, too, features prominently on the SCO agenda (India, Pakistan, and all other applicants for a place on the list of full SCO members will remain in their present status until all admission procedures are fully completed). Inventing any makeshift solutions is hardly worth trying. It might be more reasonable to use the well-tested and rather effective formula: “all member-countries plus one.” A customized approach to each individual observer country would help make cooperation mutually practice-oriented. Such a format might envisage a procedure for holding meetings according to the formula “all members plus all observers.” A similar formula might also be applied to dialogue partners. Other international organizations should feel free to seek a SCO observer or partner status.

The SCO should not only desire to expand, but be properly prepared for that. This concerns, above all, its core members. Prudence, balance, and step-by-step progress are to be the corner stones of this demanding undertaking. They will help avoid annoyances, destructive deviations, or “delayed action mines” that may suddenly go off as a result of sharp and drastic changes in the international or regional situation, which we have been witnessing increasingly often lately.

Harm-proof expansion is one of the serious tests the Shanghai Cooperation Organization is already taking. Another challenging task that may have historical consequences is taking an optimal position on the Silk Road Belt project.

Chinese Cycles

In the fall of 2013 Chinese paramount leader Xi Jinping called for creating a land-based Silk Road Economic Belt (SREB) and a Maritime Silk Road (MSR). Virtually in no time the initiative was blended into China’s diplomatic practices to prioritize a large-scale promotion campaign. Although sketchy in many aspects, the call was by no means a catchy figure of speech, or an intention to lend a new image and style to China’s international standing. It underpins the strategic plans of the current generation of Chinese leaders to launch a third phase of China’s foreign policy course of self-reliance and independence.

The first phase manifested itself in efforts to promote this foreign policy course during the Cultural Revolution in the 1960s and the 1970s, which was largely initiated by Mao Zedong precisely for that purpose. The main thrust of that phase was a demonstrative break with the previous policy of “leaning to one side” (yibiandao); that is, to the Soviet Union, which was encased in a thirty-year alliance treaty concluded in Moscow in January 1950. Ideological rhetoric in Chinese foreign policy then was toned down. The Theory of Three Worlds gave China much room for another Big Game under the slogan of independence and self-reliance and with disregard for previous commitments. The theory was devoid of the slightest hint at communist criteria, but at the same time unequivocally demonstrated estrangement between the Chinese Communist Party and the Soviet Communist Party and between China and the Soviet Union. Initiated by the Chinese leader, the normalization of relations with the United States was another sign pointing in the same direction. The U.S. promptly noticed and correctly interpreted the message from the Chinese. It was pragmatic and rationalistic enough to turn a blind eye to the repressive and destructive excesses of China’s Cultural Revolution. It is not accidental that those years saw the emergence of the U.S.-Soviet Union-China triangle, where China looked like a political heavyweight in the lineup of leading world powers. Remarkably, in today’s China critical assessment of the leftist ultra-radical ideology and practices of the Cultural Revolution does not include the foreign policy course pursued at that time, and Mao Zedong’s role in it is seen as positive.

The next phase lasted for thirty years (the countdown began in the late 1970s). China promptly mobilized itself to address the tasks of economic development. It accomplished fundamental economic modernization and turned itself into “the world’s number one workshop” and the world’s second largest power by some economic parameters, exercising growing influence on the global economy and processes underway there. Subordinating foreign policy to the task of achieving domestic policy goals required reconfiguration of the policy of independence and self-reliance. From a policy of leaning to the West, which yielded considerable dividends but at the same time displayed its limits and inconveniences, China promptly and effectively shifted to a multi-vectored policy and dynamic balance. Both continue to determine the essence of Chinese foreign policy today.

While dismissing the conclusion of and membership in military-political alliances as a legacy of the Cold War, China placed the emphasis on partnership relations with various countries (including strategic and comprehensive relationships). Over the twenty years following the first such precedent in relations with the Russian Federation, China has established a network or a system of multi-tier partnerships with more than 70 countries.

This time the reformatting of Chinese foreign policy was manifested in the full normalization of relations with the Soviet Union at the end of the 1990s, including the historically important settlement of border issues. This policy included the gradual turning of the border into a line of neighborliness and a basis for trust in the military sphere (importantly, China achieved all that without any harm to its political and business contacts with the West). The Soviet Union’s self-elimination in 1991 added to China’s certainty that it was correct in pushing ahead with the chosen foreign policy course. The emergence of new states in the post-Soviet space was pragmatically interpreted by China as an extra potential resource for addressing internal modernization tasks and expanding the room for foreign policy maneuvering, as the U.S.-Soviet-Chinese triangle had ceased to exist in its original format. With this in mind, China agreed to be one of the SCO co-founders, especially since the organization was conceived of and built as a multilateral institution of partnership in spheres of converging interests.

Deng Xiaoping’s role in that phase of independence and self-reliance policy is beyond doubt. It rested upon his own and—still effective—Chinese economic model. It looked pretty much like a remake of Vladimir Lenin’s and Nikolai Bukharin’s ideas of the New Economic Policy (NEP), fundamentally refurbished to meet modern realities and readjusted to the requirements of the globalized and information world. For many years it guaranteed China’s high growth rates and enabled the Chinese to gain a firm foothold alongside the world’s top powers. Deng’s political legacy incorporates the well-known foreign policy stratagem: “Coolly observe, calmly deal with things, hold your position, hide your capacities, bide your time, accomplish things where possible.”

The global Silk Road Belt initiative, the new style of Chinese diplomacy (a global scope, flexibility combined with reasonable firmness in safeguarding fundamental interests), and shifts in the focus and tonality of commentators’ rhetoric observed of late prompt the suggestion: Is Deng’s formula undergoing revision? Reiterated stress on the need for “revival of the Chinese nation” is one of the arguments in favor of this supposition. As if China stands on the threshold of some drastic turn in its history. And what mobilizing intentions are wrapped in the slogan of making the “Chinese dream come true”? Especially as it is increasingly associated with an ambitious and rather controversial goal of “China’s rise.”

China as the world’s second largest economic power is a hard fact. Objectively it cannot be concealed, whatever Beijing’s subjective intentions. The same is true of China’s military potential. As a derivative of the economy, this potential cannot but grow and become more sophisticated. The accumulated potential is naturally projected to the realm of geopolitics. Any other alternative would contradict historical logic. So why should China be viewed as an exception to the rule?

The core of the problem is not so much China’s need and capability for taking a worthy military and political niche in the global hierarchy, or, in other words, its ability to create a second global center of power (this is of course if we take for granted the imminent emergence of a new multipolar world order, in which, incidentally, the centers of power will likely have different weight). China’s main challenge is how to present its evolution along this line in the best and least costly way for its image in the current favorable international environment and amid widely spread prejudice against “superpowers.” Especially since in its time Chinese official propaganda instilled an utterly negative interpretation of “superpowers” in people’s minds.

A New Round of Modernization

China’s latent drift towards a leading position in the world will apparently constitute the main content of the new phase of the policy of independence and self-reliance. There are many indications that this phase, just like the previous one, will last much longer than the current Chinese leadership’s ten-year tenure. A great deal of emphasis will have to be placed on the material basis of this transition. Also, the Chinese government has made a priority devising a new innovative model that would guarantee uninterrupted economic growth within the optimal range of 6-6.5 percent of GDP a year. Maintaining socio-political stability inside the country is one of the most solid arguments of why this is essential. A policy has been set towards encouraging and expanding free market economy principles and China’s tighter involvement in globalization processes.

One of the world’s most easily recognizable labels “Made in China” is to give way to a qualitatively different one: “Created in China.” In other words, the gist of China’s new growth model is a new round of modernization. The economy and domestic cutting-edge technologies are to be brought in line with those of the most advanced countries, although China is already quite competitive by many standards. There are plans to tap the potential of China’s central and particularly western regions, where many operations are to be redeployed from the more advanced coastal areas. In addition, the latter would be converted into advanced proving grounds for innovation, as foreign investment will pour into free economic zones where the rules of doing business will become still more liberal. Redundant industrial operations (in various basic industries their share ranges from 30 to 50 percent) will be moved outside of the country. China will employ the very same methodology that developed Western countries and Japan used several decades ago to industrialize the then embryonic economies of developing countries. In other words, the east-to-west vector will largely determine the image and essence of the new model that should ensure economic growth rapid enough to meet domestic demand and let China bolster its status of the world’s second largest economic power.

The model being created is to work as the main source and provider of financial resources and commodity flows along the Silk Road Economic Belt and the Maritime Silk Road. When finalized, it may be presented inside China and to the international community as an embodiment of the New Silk Road Belt project. It remains to be seen, however, what specific achievements are to be listed on its credit side and what criteria are to be used to distinguish them from a multitude of bilateral interstate agreements. After all, the New Silk Road label can be attached mechanically to any noticeable project both inside and outside China. Incidentally, this is already becoming a widely used practice.

The geographic borders of the New Silk Road Belt are being constantly moved. Just recently they encompassed about 40 countries with a population around three billion. Today many point with certainty to nearly 70 countries, including parts of northern Africa and Australia, with a total of more than four billion residents. Hints at the broadest possible openness of the Chinese projects are ever more frequent.

Outlining the main tasks of his initiative in the fall of 2013, Xi Jinping prioritized the political unity of all participants based on the upgraded principles of peaceful coexistence with a slight economic bias (although many still think that his main goal was to achieve infrastructural interdependence). This idea was later coupled with his call to create a “community of common destiny” (voiced for the first time during a lecture at the Moscow State Institute of International Relations (MGIMO) in the spring of 2013).

Looking for discrepancies, half words, and vagueness of expression in China’s proposal to create a New Silk Road, criticizing delays in formalizing its concept (incidentally, the term ‘concept’ is not applied in Chinese official texts), and complaining about the absence of a plausible “road map” would mean narrowing the subject while never understanding its major long-term objective—China’s emergence onto the arena of global project makers.

China has said all along that none of the international associations currently operating in the territories of the future Silk Road Belt are seen as hindrances to the implementation of the ideas it proposed. It will be up to China to devise a way of finding a common language with such structures. The recently started consultations with the Eurasian Economic Union are a precedent.

The Silk Road Belt philosophy is consonant with the SCO’s original ideas and practices. The idea of a New Silk Road cannot and should not be considered as an antagonist to the SCO. On the contrary, the two are quite compatible. The SCO should by no means make any hasty moves to reserve some special niche for itself. It should remain what it is—a well-established, self-sufficient, and authoritative association of countries, and to follow its own plans and intentions. China is not an outsider, but one of the SCO’s founding countries. So its activity within the organization may help to provide a more direct and comprehensive understanding of how China intends to implement the New Silk Road project.

In these new circumstances the SCO is gaining new opportunities and resources, such as the international Asian Infrastructure Investment Bank (its CEOs deny that the bank was created specifically to service the Silk Road project), and a variety of major funds that keep mushrooming in China under the Silk Road logo.

For Russia, the SCO will remain a key foreign-policy factor, as its presidency in the organization over the last year and the Ufa Summit convincingly showed. The volatile international situation requires that Russia conduct multi-vectored diplomacy with a greater emphasis placed on its eastern component. This is where the tasks of making the SCO more robust and pro-active in implementing the New Silk Road ideas meet.