Xi Pushes Shanghai Cooperation Organization Toward Development Bank, Pledges $1.4 Billion
At the Tianjin summit, China's leader seeks to broaden the SCO's remit beyond security with plans for a development bank and fresh loans
Chinese President Xi Jinping on Monday urged members of the Shanghai Cooperation Organization to accelerate creation of an SCO development bank and pledged $1.4 billion in loans for member countries over the next three years as he seeks to expand the group's influence beyond security cooperation.
Speaking at the annual summit in Tianjin, Xi said the international situation had become "more complex and turbulent," and that member states faced "more arduous safety and development responsibilities." Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and leaders from a range of member and partner countries were attending the forum.
Xi did not say that the $1.4 billion would be earmarked for the proposed SCO development bank. The move to create a multilateral lending vehicle underscores Beijing's broader push to enlarge the organization's mandate from a primarily security-oriented forum to one that also provides development financing and economic cooperation.
Formed in 2001 as a regional security grouping, the SCO has expanded its membership and influence in recent years, adding new members and hosting a wider set of participants and observers at its summits. The organization has been viewed by some analysts as a counterweight to U.S. influence in Central Asia and a platform for closer ties among Eurasian powers.
"He wants to provide an alternate world order, because the US-led world order is very much in decline. This is the main narrative," said Alfred Wu, a professor at the National University of Singapore, describing the strategic intent behind Beijing's push to broaden the SCO's remit.
Chinese officials framed the proposals as responses to shared development and security needs among member states. Details on the structure, capitalization, governance and timeline for the proposed development bank were not disclosed at the opening session. Officials also did not specify which projects or countries would receive the new loan funds.
The SCO summit gathered leaders from the organization's full members, observer states and dialogue partners. Participants have used the forum in recent years to coordinate on counterterrorism, border security and economic cooperation. Expanding into multilateral lending would mark a significant institutional shift for the grouping and could increase Beijing's economic leverage within the region.
Diplomats and analysts say the SCO's effectiveness in executing development projects will depend on the bank's design and on whether members agree on lending criteria, project selection and oversight. For now, Xi's announcements signal Beijing's intent to deepen the SCO's role in Eurasian affairs as the summit continued in Tianjin.