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48 I Eurasia bne July 2018
Nazarbayev (walking alongside Chinese leader Xi Jinping) seemed to have a good summit, but Vladimir Putin (middle) may have come away a little more anxious at how much Central Asia is falling into China’s economic orbit.
Kazakhstan among nations cheering SCO’s ‘victory’ over the G7
firmed support for China’s plan.
Last November, Chinese Assistant Foreign Minister Li Huilai told reporters that “the goal of establishing a [SCO] free trade zone will definitely be achieved before long”.
Trade bloc ambitions
The initiative, on the surface, appears to challenge Russia’s leadership ambitions in Central Asia. Moscow has attempted
to consolidate its influence over its for- mer vassal states under its free trade bloc, the Eurasian Economic Union (EEU).
Despite the Kremlin – which was turfed out of the G7 after Russia seized Crimea, although Trump caused upset in Canada by calling for its readmis- sion – repeatedly showing outward support for Chinese investment, many a Russian headline last year expressed concern over China’s influence in Kazakhstan and Kyrgyzstan – especially after Kazakhstan announced plans to transition its language to a Latin alpha- bet away from a Cyrillic one.
The EEU was originally designed to cre- ate a greater dependence on Russia for Kazakhstan and Kyrgyzstan. An SCO free trade zone would likely dwarf Russia’s ambitions of maintaining greater influ- ence over SCO’s ex-Soviet members. In Kyrgyzstan’s case, for example, the EEU has effectively blocked off the inflow of cheap goods from China into the Kyrgyz re-export market. An SCO free trade zone would revitalise that market, but also shift the centre of influence over the country back to China away from Russia.
An SCO trade bloc, if implemented sooner rather than later, might also succeed in bringing Uzbekistan and
Kanat Shaku in Almaty
The relative success of the week- end’s June 9-10 Shanghai Cooperation Organisation (SCO) summit in Qingdao, China, may have been exaggerated in some quarters given the absolute dog’s dinner the G7 summit in Canada turned into as Donald Trump stoked a series of rows with sup- posed allied nations – but Kazakhstan, for instance, was certainly hailing it is
a significant advance with Kazakh and Chinese businesses signing 40 deals worth $13bn during the event, accord- ing to June 11 reports from Kazakh media outlets.
The SCO, formed in 2001, is a China-led intergovernmental organisation which also boasts Russia, Uzbekistan, Tajiki- stan, Kyrgyzstan and Kazakhstan as longstanding members, while India and Pakistan were lately granted member- ship (Afghanistan, Iran and Mongolia have observer status). Many of the inked Kazakh-Chinese deals are in tune with China’s goal of forming trade transit
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hubs and corridors with modern infra- structure in Kazakhstan and much of the rest of Central Asia. Huge sums will be invested into what is known as the One Belt One Road (OBOR) or Belt and Road initiative, with an eye on driving up exports to Europe.
However, this year’s summit of the 18-year-old SCO has not borne as much fruit as was hoped for because China once again failed to secure India’s back- ing for OBOR. Even so, while China’s abil-
“An SCO free trade zone would likely dwarf Russia’s ambitions of maintaining greater influence over SCO’s ex-Soviet members”
ity to attract India to the table appears to be key to the full success of OBOR, the Central Asian nations look set to remain steadfast in their contribution; the lead- ers of the “Stans” have continuously reaf-
Tajikistan into the fold of a common free trade space prior to any breakthrough made by Moscow. Russia has been trying to bring the two countries into the EEU in recent years.