China's SCO development bank idea meets needs of Central Asian nations

19:55, December 01, 2010      

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China's proposal to establish a development bank for the Shanghai Cooperation Organization (SCO) was not surprising because the need had been there for a long time, a Russian expert told Xinhua Wednesday.

Gennady Chuprin, an adviser at Russia's Academy of Science, also said it was a logical continuation of SCO's further development.

Chinese Premier Wen Jiabao attended the Ninth Prime Ministers' Meeting of the SCO on Nov. 25, calling for deeper financial and monetary cooperation among SCO member states and proposing to conduct research on establishing a SCO development bank.

Chuprin said economic cooperation among SCO members would gradually outweigh other dimensions of their activity.

"This is Beijing's point of view that economy must go first," he said, adding the global financial crisis proved this view was correct.

Chuprin said, "Beijing sees the initiative as a means of supporting the Central Asian countries, whose financial systems have been ruined."

Currently, the financial sector has been a bottleneck in the SCO's development. All SCO members got financial support via the Eurasian Economic Community treaty institution, of which they were members, Chuprin said.

Currently, China, which is not a member of the Eurasian Economic Treaty, had the overwhelming share of Central Asian nations' foreign trade but "Beijing remains aside", he said.

"So the countries' leaders will be happy to receive support from Beijing to finance their national infrastructure in the current context where their own financial institutions have been gradually fading," Chuprin said.

The professor also said that, to establish such a bank, was only a preliminary intention so far, and the SCO members would have to go a long way to decide several important issues, such as its shape and the currency to be used.

However, "creation of the SCO bank will mean that quantity transforms itself into quality," he said.

Chuprin was optimistic for SCO's future development.

The professor also predicted that China would soon obtain a dominant position within the SCO after the establishment of the bank, squeezing Russia into the second place.

However, "Moscow does not see this qualitative shift in the SCO's power balance as something negative or threatening for Russia," he said.

"Moscow is interested in SCO as a whole getting stronger. And if your friend becomes stronger, you become stronger too," he said.

Source: Xinhua


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