Belt and Road will be key to SCO countries

The Belt and Road Initiative and new business modes will further promote economic ties among members of the Shanghai Cooperation Organization, which are deploying more resources in railways, trade, financial services and people-to-people exchanges, experts and business leaders say.

New opportunities will come from the growing demand of countries in Central Asia, Eastern Europe and South Asia for infrastructure projects and their developing priorities on sustainable development in urbanization and industrialization, and in the service and communication sectors, they say.

This comes in the wake of the recent SCO Summit in Qingdao, Shandong province, which aimed to inject new drive into regional economic integration.

The SCO members, which include China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, India and Pakistan, cover about half the world's population and are important participants of the Belt and Road Initiative. A number of major joint projects have been completed in SCO member states under the framework of the Belt and Road Initiative since 2014, including highways, railways, tunnels and electric power plants, which improve cross-border logistics and promote trade among SCO countries.

PJSC TransContainer, Russia's biggest container operator, will run three trains carrying container cargo per week beginning in the middle of June, between Yiwu in Zhejiang province and Moscow.

In response to the soaring logistics demand between China and Russia, as well as among other SCO member states, TransContainer's new cargo route will have a capacity of 50 40-foot equivalent unit containers, says Alexander Podylov, director of sales and business development of the Russian freight cargo operator.

Alexander Machkevitch, chairman of Eurasian Resources Group, a Kazakh international mining company, says the group is discussing joint projects with Chinese companies in Kazakhstan, encouraged by the fast growth pace of the Belt and Road Initiative.

"Our aluminum smelter, which is the only producer of aluminum in Kazakhstan, was built with China Nonferrous Metal Mining (Group) Co and is one of the largest foreign investments made by China anywhere in the world," he says. "One of the new projects is related to the reconstruction of the two power generation units at the Aksu electric power plant."

Wang Zhipeng, a professor of regional economy at Beijing Jiaotong University, says: "These projects are based on the stabilized economy of SCO members, and their surging goods, commodities and service imports from each other, as well as the quickly diversifying multilateral trade and investment activities among them."

The total volume of trade in goods between China and the other SCO member countries reached $217.6 billion (185 billion euros; ￡163 billion) in 2017, an increase of 19 percent from the previous year, official data show.

Mutual investment has been growing steadily, with China's nonfinancial direct investment in other SCO member countries amounting to $74.2 billion and investment in the "reverse direction" totaling $1.09 billion as of April 2017, according to the Ministry of Commerce.

China has also built 21 economic and trade cooperation zones within the territory of the SCO countries, making contributions to expanding local employment and increasing tax incomes.

Eager to further strengthen ties, China and member countries of the Eurasian Economic Union signed an agreement in Astana, Kazakhstan, in May to cut trade barriers and facilitate economic activities.

The economic and trade agreement covers 13 chapters, including customs cooperation and trade facilitation, intellectual property rights and government procurement, with new topics including e-commerce and market competition, according to the ministry.

The Eurasian Economic Union was founded by the leaders of Russia, Belarus and Kazakhstan in May 2014. The treaty of the union came into force in 2015, when Armenia and Kyrgyzstan joined the bloc.

The Ministry of Commerce said the agreement aims to further reduce nontariff trade barriers and improve trade facilitation, while creating a favorable environment for industrial development and boosting China's economic and trade relations with the Eurasian Economic Union and its member countries.

Zhou Shijian, an economics professor at Tsinghua University, says the agreement will help the six countries better shape the "docking" of the fast-growing Belt and Road Initiative.

"Even though many parts of the world are still having troubles with unilateralism and trade protectionism, China and the five-nation union have reached broad consensus on Eurasian economic integration," he says.