Spotlight: SCO members to explore industrial capacity cooperation

As time draws near for the 14th Shanghai Cooperation Organization (SCO) prime ministers' meeting, the heads of government to attend the event are widely expected to mull ways of expanding industrial capacity cooperation within the bloc.

The meeting, which will bring together heads of government of the SCO member countries of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, and of the observer countries of Afghanistan, Belarus, India, Iran, Mongolia and Pakistan, will be held in Zhengzhou, the capital city of central China's Henan Province, from Monday to Tuesday.

Cheng Guoping, vice foreign minister of China, told a recent press briefing in Beijing on Dec. 8 that industrial capacity cooperation, along with trade facilitation, infrastructure building as well as financial cooperation, will be the priorities for enhancing regional cooperation among SCO countries.

LI PLAN

Chinese Premier Li Keqiang first proposed industrial capacity cooperation at the 13th SCO prime ministers' meeting in the Kazakh capital city of Astana in Dec. 2014.

The proposal to marry China's industry strengths in the production of steel, cement and other materials with Kazakhstan's huge demand for such commodities in the coming years has been hailed by many as a classic example of win-win cooperation.

The Chinese premier's proposal was warmly received by the Kazakh side, and in a sign of appreciation, Kazakh President Nursultan Nazarbayev even coined the term "Li Plan" to describe the package of industrial capacity cooperation projects Li put forward.

Citing consensus between China and Kazakhstan on enhancing industrial capacity cooperation, Li told leaders of other SCO members at the meeting that China is not only willing to cooperate with Kazakhstan in such a mode, but also wishes to forge similar bilateral or multilateral cooperation models with other SCO countries.

"This will not only benefit all parties in coping with the (economic) downward pressure and in facilitating the industrial upgrading, but will also boost the competitiveness of China's surplus capacity in international markets," Li said.

In the past 12 months, China and Kazakhstan have signed scores of industry capacity cooperation deals worth over 30 billion U.S. dollars.

ENORMOUS POTENTIAL

Kazakhstan is not the only country within the SCO framework that shares with China enormous potential in conducting industry capacity cooperation.

Some SCO members in Central Asia, which often strike visitors with an impression of dilapidated infrastructure networks, will shake off such a negatve impression on foreign investors before long if they actively engage in industrial capacity cooperation with China.

Li Yumei, deputy director of Institute of International Economy at University of International Business and Economics in Beijing, said that the advantage of regional cooperation within the SCO is existence of conditions for member states to interconnect their industrial capacities.

The mutually complementary nature of regional cooperation has given a rise to what Li called a situation of equal dependency, which makes other SCO countries willing to cooperate with China in industrial capacity development.

Given that most of the Central Asian countries are landlocked ones, they can overcome the geographic limitations and open up to the rest of the world by cooperating with China, Li told reporters on the sidelines of an SCO trade ministers' meeting in northwest China's Xi'an city on Sept. 16.

GREATER EMPHASIS ON ECONOMIC COOPERATION

Security cooperation and economic cooperation have been described as the two wheels of the SCO. However, a popular impression is that the bloc has achieved a great deal in pushing forward security cooperation among members while its endeavors for economic cooperation appeared to be far less impressive.

In 2012, the SCO members decided to place more emphasis on facilitating regional economic cooperation in the next 10 years.

In July, Chinese President Xi Jinping, while attending the 15th SCO Summit in Ufa, Russia, called for expanding the experience gained from bilateral industrial capacity cooperation to a larger scale within the SCO.

China will push forward the establishment of joint industrial parks in every SCO members based on market principles, he said, stressing that China is willing to share with SCO partners its technology and management know-how.

As they all face downward pressure on their economies, the SCO members are strongly motivated to take the opportunity brought about by the 14th prime ministers' meeting to further align their development strategies so that each could emerge stronger as a result of strengthening industrial capacity cooperation -- a crucial subject for furthering economic cooperation within the SCO. Endi