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Guide the SCO to Develop and Prosper Together with New Outlook of Development

Submit Time:01-08-2018 | Zoom In | Zoom Out

Author:Dong Yan | Source:Guangming Daily (June 18, 2018)


Recently, President Xi Jinping delivered an important speech at the 18th Meeting of the Council of Heads of Member States of the Shanghai Cooperation Organization held in Qingdao. On the basis of summarizing and recalling the extraordinary course of development of Shanghai Cooperation Organization (SCO), he praised highly the major achievements obtained by the SCO, expounded the unique value and new connotation of the “Shanghai Spirit”, and put forth five suggestions on building an SCO community with a shared future in the new era, offering the Chinese wisdom for SCO on the aspects of development, security, cooperation, civilization and global governance.  

Vest a new connotation to “Shanghai Spirit” and build an open world economy 

SCO is an important result of China promoting the innovation of global governance pattern, after 17 years of development, SCO is now advancing steadily, becoming an important force in promoting the regional and world peace and development and promoting a fair and rational international order. The “Shanghai Spirit” is the soul of the SCO. Guided by the principles of mutual trust, mutual benefit, equality, consultation, respecting for diverse civilizations and pursuit for common development, the Declaration of Qingdao Summit stated that SCO “is committed to building more fair and balanced international order on the basis of equality, commonness, integration, cooperation and sustainable security, and safeguarding the interests of all countries and every country according to the standards and principles of international laws.” The “Shanghai Spirit” promotes open and inclusive cooperation for win-win outcomes, rejects self-centered, short-sighted and closed-door policies, upholds WTO rules and supports the multilateral trading system so as to build an open world economy, with demonstrative and guiding significance to the world development.  

The current world economy is in the period of transformation and readjustment, after the 2008 financial crisis, the world economy is now in the stance of recovery, according to the IMF prediction in April 2018, the global economic growth is expected to reach 3.9% in 2018 and 2019, the developed economies will continue to expand at a speed higher than the potential growth rate, and then economic growth will slow down, the growth of emerging markets and developing economies will speed up, and then tend to be stable. Global trade resumed its growth momentum in 2017 following a sustained downturn since 2009. According to the latest news released by the WTO on April 12, the global trade in goods will maintain a growth rate of 4.4% in 2018, and it will decrease slightly in 2019 to 4.0%. World economic recovery is still unstable, the global development is facing a series of important challenges, international and regional hotspot issues take place frequently, and some developed economies, based on their own interests, adopt measures such as trade protectionism, bringing great uncertainty to the global macroeconomic stability.  

With the new world economic situation, the global governance structure has entered a period of remolding. In recent period, global and regional situations have been complex with some sudden changes, unilateralism, trade protectionism, inverse globalization trend, populist trend rose significantly, leading to increasingly serious threats and challenges to the global free market order, free trade system, and the international order. At the recent concluded G7 summit, the difference within the group of seven became intensified, showing that in the circumstance that the interests of all countries are increasingly blended, ruling the world by hegemonism and beggar-thy-neighbor policies will surely be opposed by all countries of the world, and only win-win cooperation is the general trend.  

China has played a positive role in promoting the recovery of the world economy and the steady growth of the global economy while rising its position in the global economy. “China has been the largest contributor to world economic growth since the 2008 global financial crisis,” the World Bank said in its introduction to China on its homepage, which was updated on April 19. As the world’s second largest economy, China has been actively participating in global economic governance, shouldering the responsibility as a big country, and offering the Chinese wisdom for global governance through idea support, policy guidance, system innovation and action guide.  

At the 2018 Boao Forum for Asia held in April this year, China demonstrated its firm idea in expanding opening-up and building an open world economy. At the SCO Qingdao Summit held two months later, China, through hosting another diplomatic activity at home, advocated that all countries build an equal, open and inclusive, and shared win-win partnership, to shape an open world economy. Facing the external pressure, China has actively and steadily pushed ahead independent opening-up to convert the pressure into motive force. By lowering import tariffs on consumer goods and automobiles, substantially relaxing market access and lifting restrictions on the proportion of foreign shares in automobile production, preparing for China International Import Expo, promoting trade and investment facilitation, and advancing negotiations on free trade agreements, China has taken the lead to definitely pushing forward an open world economy.  

Advocate new outlook of development of SCO and make a powerful engine for joint development and prosperity.  

Promoting development is an important task faced by all SCO member countries. In the process of economic globalization, one of the important risks is the widening income gap between countries all over the world, the benefits of globalization have not shifted to lower level, and the less developed regions and people are lacking in the ability and opportunity to share the benefit of globalization. The economies of the SCO member states have shown signs of recovery now, but the momentum of recovery remains weak. At the same time, the SCO member states are at different stages of economic development. Countries differ greatly in economic development, with different appeals for development. Kazakhstan, China and Russia are relatively strong in economic development, with per capita GDP at 8000~10000 USD, while Uzbekistan, Pakistan, India, Kyrgyzstan and Tajikistan have a great gap in the economic development level compared with that of Kazakhstan, China and Russia. As a regional cooperation organization, SCO has gradually expanded its functions from security cooperation to economic cooperation. How to solve the economic income gap between member states is a new challenge to SCO.  

To tackle the problem of unbalanced development, narrow the income gap between countries and achieve “common prosperity”, the SCO needs new ideas and concepts. In the process of promoting common prosperity, we need to strengthen leadership with innovation and effectively inject new momentum into global economic development with the help of information revolution and technological innovation; we need to focus on coordinated development and promote the spread of technology in developing countries through trade liberalization and investment flows; we should advocate green economy, pay attention to economic balance and multivariate development; we should uphold the concept of openness and reduce trade and investment barriers; we should reduce trade inequality, promote inclusive growth, promote the integration of SMES into regional value chains, and advance the UN 2030 Agenda for Sustainable Development. The innovation, coordination, green, openness and sharing outlook of development initiated by China at the SCO has provided wisdom and solutions of China. The innovative, coordinated, green, open and inclusive development is an important part in the 13th Five-Year Plan of China, it has integrated the outlook of development proposed by China based on its own development experience into the development concept of SCO, demonstrated the interaction of the national governance of China with the global governance, and provided the Chinese solution with Chinese wisdom to the general problems faced by developing countries in globalization.  

Promote the connection with the Belt and Road Initiative and build up a new pattern of integrated regional development of SCO 

President Xi Jinping proposed that the SCO should “promote open and inclusive cooperation for win-win outcomes”, which is consistent with the principles of joint consultation, joint construction and sharing upheld by the Belt and Road Initiative. The Belt and Road construction has brought new development opportunities to the SCO, since 2015, the successive summit communique issued the declaration of heads of state and communiques of prime ministers’ meetings all stated explicit support for the Belt and Road construction. The SCO has actively promoted the policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds among the countries. The SCO member states signed in 2014 the Protocol on Facilitation of Inter-government International Road Transport of Shanghai Cooperation Organization Member States, promoting the regional connectivity of Belt and Road. Before this Qingdao Summit, China and Russia signed the Joint Declaration of China and Russia on Completing the Joint Feasibility Study on Eurasia Economic Partnership Protocol, the deepened cooperation of both parties will help enhance mutual complementarity of advantages, deepen the participation of both countries in global trade flows, and lead the connection of Belt and Road construction with the construction of the Eurasian economic union through bilateral cooperation.  

The SCO Qingdao Summit issued a joint statement on trade facilitation, which is an important result of promoting trade liberalization among member states. The SCO countries differ greatly in economic development, with obvious differences in the economic development stage, the market business environment and legal governance level in various countries, joint efforts need to be made in terms of rules and regulations docking, for example, improvement is expected for the customs and inspection and quarantine systems of some countries, and factors such as system differences, technical barriers, tariff quota may influence the actual working effect of cooperation. Advancing trade and investment facilitation will lay a foundation for removing barriers, gradually establishing a system of regional economic cooperation and opening up a new journey of regional economic cooperation.  

The SCO has actively expanded cooperation in various fields. At the Qingdao Summit, a number of pragmatic cooperation documents in the areas of food security and customs cooperation were signed. Looking forward to the future, the Shanghai Cooperation Organization will continue to deepen cooperation among the countries in economy, trade, investment, finance, connectivity and agriculture, to inject new motive force into economic cooperation, promote the connection of development strategies of all countries with the Belt and Road construction, and build a new pattern of regional integration development.  

 (Author entity: Institute of World Economics and Politics of the Chinese Academy of Social Sciences)

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