On June 21, Chinese President Xi Jinping arrived at Bokhara, starting his state visit to Uzbekistan and attended the 16th Meeting of Council of Heads of State of Shanghai Cooperation Organization (SCO) in Tashkent. On June 23, the Minister of Commerce Gao Hucheng, who accompanied President Xi Jinping, received the interview from major central media regarding issues like deepening SCO regional economic cooperation and building the matchmaking platforms of “Belt and Road”.
Gao said that, SCO was found on June 15, 2001. It is the only regional international organization which is named after a Chinese city and has its headquarter in China. During the 15 years, following the “Shanghai spirit” with mutual trust, mutual benefit, equality, consultation, respecting the diversified cultures and seeking of the common development, the SCO member countries completed the formulation of rules, determined the cooperation directions, and actively advocated the new type international relation which is open, inclusive, and reciprocal. They have made great contributions to the stability and prosperity of the region, and showed great vitality.
1. The direction of regional economic cooperation was clarified. SCO members determined jointly the short, mid and long term goals of regional economic cooperation of facilitating trade and investment, strengthening economic and technological cooperation and realizing the free mobility of trade, capital, technology and services within the region, which laid the legal fundamental of regional economic cooperation. The organization mechanism was optimized gradually with more than 30 mechanism formed like the Economic and Trade Ministers’ Meeting, the Finance Ministers’ and Central Bank Governors’ Meeting, the Transport Ministers’ Meeting, the Agriculture Ministers’ Meeting and the Science and Technology Ministers’ Meeting. Among these, the Economic and Trade Ministers’ Meeting has 6 special working groups including the customs group, the e-commerce group, the investment promotion group, the trans-border potential development group, the group of modern information and telecommunications technology and trade facilitation, and the entrepreneurs’ committee and inter-bank combo. It has become an important platform to promote SCO regional economic cooperation.
2. The international influence was further improved. SCO has developed from 6 member countries to 18 countries (including 6 member countries, 6 observer countries and 6 dialogue partner countries), with a population accounting for 44% of the world total and the area about 38 million square kilometers, covering one quarter of the world land area. In 2015, the total GDP of its member countries reached US$ 12.5 trillion, and the total import and export surpassed US$ 5 trillion.
3. The economic and trade cooperation between China and SCO countries became even closer. In 2015, the trade volume between China and the other member countries was seven times that of the beginning of the foundation of SCO. The facilitation measures of the member countries on custom clearance, inspection and quarantine, logistics transportation and payment were optimized constantly, and the new trade types like cross-border e-commerce enjoyed a rapid development.Economic and technological cooperation witnessed great achievements. Up to May 2016, all of China’s investment to the other SCO members accumulated to over US$ 70 billion, and the contractual volume of the implementation projects valued US$ 57.18 billion. China has become a major investment partner of the other members. The infrastructure network connecting the energy, transportation and telecommunication within the region has showed its outline. Other SCO member countries’ investment in China was active, totaling US$ 1.07 billion. SCO constantly strengthened the interests’ integration, forming an interests’ community with you in me and me in you.
4. The initiative of “Belt and Road” injected great power to SCO regional economic cooperation. The initiative of “Belt and Road” which was put forward by President Xi Jinping in 2013 was the Chinese plan and China’s contribution to the global governance. The construction of the “Belt and Road” follows the principle of joint consultation, joint construction and sharing, led by the Silk Road Spirit of “peace and cooperation, openness and inclusiveness, learning from each other, mutual benefit and win-win result”. It takes the forging of Fate Community and Interests Community as the cooperation goals, has gained wide recognition from SCO countries. During the 3 years, SCO countries actively took part in the joint construction of “Belt and Road”, gaining fruitful achievements. In July 2015, while attending SCO UFA Summit, President Xi Jinping put forward four economic and trade initiatives including promoting intra-regional connectivity, strengthening capacity cooperation, strengthening ability construction cooperation and conducting investment and financing cooperation. All the member countries reached consensus on joint construction of “Belt and Road” and wrote it in the Summit declaration, marking that SCO regional economic cooperation’s stepping into a new era of “Belt and Road” integration. The development concept of joint consultation, joint construction and sharing put forward by China highly tallied with the development vision and strategies of the countries within the region. SCO regional economic cooperation began to enter the formulation stage of regional trade facilitation rules, and stride steadily towards the “three steps” goal of trade and investment facilitation, economic and technological cooperation and building FTA.
Gao pointed out that nextly, SCO regional economic and trade cooperation should grasp the following directions while being led by the spirit of “Belt and Road”,:
Firstly, constantly promote trade facilitation. We should further explore the trade potential among SCO countries, expand market liberalization and trade scale, and optimize commodity structure. At the same time, we should strengthen comprehensive facilitation measures like custom clearance, inspection and quarantine, logistics transportation, standards authentication and payment. We should also generalize new trade types like e-commerce, promote the business facilitation level of SCO countries and bolster the realization of the trade facilitation arrangement of the whole region.
Secondly, we should forge the connectivity pattern as soon as possible. We should make full use of the role of SCO as a multilateral economic and trade cooperation platform, and continue to conduct the regional network infrastructure construction projects of energy, communication and transportation. We should coordinate to promote the construction of the transportation logistics projects with regional influences like China-Europe corridor, China-Kazakstan Horgos Frontier International Cooperation Center, Lianyungang International Logistics Base and South Ural International Logistics Center. The aim is to form a convenient and effective regional connectivity system.
Thirdly, constantly innovating modes for capacity cooperation. The SCO (Shanghai Cooperation Organization) countries have different endowment of resources, and they are complementary to each other in economy while enjoying broad space for industrial cooperation. We should make full use of the industrial cluster and demonstration effect that the cooperation industrial parks play, focus on the areas of petrochemical engineering, metallurgy, equipment manufacturing, transportation logistics and agriculture development, expand the attraction of FDI, intensify the resources of R&D, support all countries to carry out their national strategies of economic transformation and industrial upgrading, and take the lead in forming the overall competitive advantages for the SCO regional economy and influence other region of the “belt and road”.
Fourthly, striving for a multilateral and synergic investment or financing system. Efforts will be made to constantly perfect the SCO financial service platform and to set up the special account and development bank for the SCO. Further play the role of Shanghai Interbank Consortium and build up a bridge of information exchanges and communication and cooperation for industrial circle and financial institutions. Innovate the modes, actively support SCO’s cooperation projects in infrastructure, resources development, and industrial development through the platforms of China-Eurasian economic cooperation fund and Silk Road fund. Satisfy the diversified needs of financing and gradually establish a sustainable diversified investment and financing support system for the SCO to adapt to local characteristics.
The SCO Tashkent Summit will further implement the fruits of the Ufa Summits last year, outline new blueprint for the future development of SCO, promote the further development of the regional economic cooperation, and benefit the people of the Shanghai Cooperation Organization member countries..
Afterwards, Gao Hucheng answered questions from the main media in Uzbekistan.
The main media: In July 2015, the Chinese side proposed the initiatives of promoting regional connectivity, strengthening capacity cooperation and cooperation in ability construction, and conducting investment and financing cooperation at the SCO Ufa Summit, so how about the implementation?
Gao Hucheng: In July 2015, at the SCO Ufa Summit, the Chinese side proposed the initiatives of promoting regional connectivity, strengthening capacity cooperation and cooperation in ability construction, and conducting investment and financing cooperation. All members reached the consensus on jointly building the “Belt and Road”, which was written in the Declaration of Ufa Summit, marking a new stage for the SCO regional economic cooperation to integrate into the development of the “Belt and Road”. The Chinese side has made active efforts to implement the economic initiatives put forth by President Xi Jinping at the Ufa Summit and has made remarkable achievements.
1. Promoting regional connectivity. In the first half of this year, the Angren - Pape tunnel undertaken by the Chinese enterprises in Uzbekistan was completed, and Vahdat -Yovon tunnel in Tajikistan was put into use. That is of great significance for improving people’s life in Uzbekistan and Tajikistan and enhancing the connectivity cooperation along the “belt and road”. The project of Sukkur-Multan along the Peshawar-Karachi highway under China-Pakistan Economic Corridor kicked off in April 2016 and Teheran-Isfahan high-speed rail was launched in January 2016. The construction of western China-western Europe highway undertaken by the Chinese enterprises in Kazakhstan is expected to end in 2016. The Moscow-Kazan high-speed rail is expected to complete its feasible research and the Tongjiang River (Russian side) is under construction and is expected to be completed in 2018.
2. Capacity cooperation is in full swing. China-Kazakhstan capacity cooperation has confirmed 52 early harvest projects with a total value of US$23 billion. The extension project for 110MW coal fired heater and generation set of Karaganda No.3 power station was combined to the grid for the first time on December 21, 2015, and was handed over at the end of January 2016. The Datka - Keming 500KV high-voltage power supply and transformation project in Kyrgyzstan was completed in August 2015, signifying Kyrgyzstan’s independence of power. China-Belarus industrial park finished the “Seven-Providing and One level” supportive infrastructure within 3.5 square meters starting zone, and 1.2 square meters office building and 8,000 square meters standard factory construction. Tajikistan’s lead and zinc ore mining project and industrial park has obtained US$2.713 million investment by the end of April 2016, and the concentrating mill has been built and put into use. During President Xi Jinping’s visit to Uzbekistan, the two leaders negotiated on building Dzhizak industrial park into an important platform for China-Uzbekistan capacity cooperation.
3. Helping member countries improve the level of ability construction. So far, China has trained a total of 6,513 talents of various kinds for the SCO member countries under the term of foreign aid budget, covering party policy, public management, trade, diplomacy, agriculture, forestry, husbandry and fishery, transportation, education, medical health, culture and energy and mineral resources. From 2015 to April 2016, the Chinese side has trained 1,337 talents for SCO member countries by using foreign aid budget.
4. Carrying out investment and financing cooperation in major projects. The Asian Infrastructure Investment Bank, Silk Road Fund and China-Eurasian Economic Cooperation Fund have been at a stage of substantive operation, and the Chinese government has provided US$13.1billion preferential buyer credit loan for SCO countries to carry out 52 cooperation projects. China has signed agreement on local currency settlement in border trade with Russia, Kazakhstan, and Kyrgyzstan, and signed agreement on local currency settlement in cross-border trade with Tajikistan. China also signed a bilateral local currency swap agreement with Russia, Kazakhstan and Tajikistan. In March 2016, the People's Bank of China announced that it has finished several deals of capital use through bilateral local currency swap with the central bank of Russia. We can say that China’s financial cooperation with SCO member countries just start and has a broad prospect.
The main media: It is the SCO countries’ common wish to expand the size of trade and attract foreign capital. What work has the Chinese side made to promote the SCO trade and investment facilitation?
Gao Hucheng: 1. Further enrich the facilitation policy system. Efforts were made to steadily advance the implementation of measures through the trade facilitation panel under the mechanism of trade ministers’ meeting. Strengthen the overall facilitation measures in customs clearance, inspection and quarantine, logistics transportation and payment and settlement. , make it easier for SCO countries to do business, popularize the experience to other countries along the “belt and road” and enhance the trade facilitation arrangement across the whole region.
2. Promote the cooperation between the Customs and the Quality Inspection Department and improve the level of customs clearance facilitation. Efforts have been made to continue to promote the cooperation between the trade safety and facilitation, to improve the level of cooperation of port management with the other members of the SCO and to improve the basic port infrastructure of China and the above countries by assisting the Customs in testing equipment. Efforts have also been made to carry out the cooperation between the quality standards of the export products and quality certification. Launch the work of standards amendment and measurement standards assessment of prior fields such as energy and transportation. Centering on the above tasks, all members have signed the documents such as the Agreement on the Cooperation and Mutual Assistance of the Customs, the Protocol of the Exchange of Energy Supervision Information of the Customs and the Customs Department’s Memorandum of Understanding of Developing and Applying the Risk Management System, etc. At this Summit, new initiatives will be proposed on facilitating the training of the special personnel, assisting the customs and quality inspection equipment and the technical support.
3. Strengthen the promotion of the creative trading mode such as the e-commerce. Efforts have been made to vigorously develop the cross-border e-commerce and to promote the “Internet+” plan of the SCO. Special Efforts have also been made to support Alibaba and Jingdong to enter the SCO countries and to co-build the cooperative platform with the local e-commerce. Work is done to positively promote members, observer countries and dialogue partners to jointly participate in the establishment of the e-commerce platform of the SCO and the formulation of rules. The infrastructure construction such as the logistics and the storage has been strengthened and the cross-border payment conditions have been improved. China has proposed to study and build the e-commerce platform and the alliance for e-commerce. And China has submitted the proposal to all parties.
4. Promote the regional financing cooperation and the cross-border domestic currency clearing. The Asian Infrastructure Investment Band initiated by China has been officially running. 57 countries joined in the AIIB. The Silk Road Fund and the China-Eurasian Cooperation Fund completed the establishment of the AIIB. China has provided US$13.1billion favorable buyer’s credit for the intra-area countries and supported the implementation of 52 investment projects. With the expansion of the territorial scope of the overseas RMB settlement, efforts have been made to further promote the use of RMB in the settlement with other members in order to provide convenience for the intra-regional trade and project financing.
Major media of the Central Government: what trade and economic achievements will be made at the SCO Tashkent Summit?
Gao: This summit will further implement the achievement of the UFA Summit last year, sketch a new blueprint for the future development of the SCO, promote the regional economic cooperation to acquire more development and o benefit the countries and the people of the SCO. Firstly, efforts will be made to further strengthen the capacity building within the SCO framework. Secondly, efforts will be made to restore the cultural relicts along the line of the Silk Road and the cooperation in archaeology. Thirdly, efforts will be made to promote the “Five-Year Plan” of the SCO regional economic cooperation. All parties have launched the negotiation of the List of Potential Responses of Promoting the Project Cooperation between 2017 and 2021. 86 cooperative measures of 10 fields have been preliminarily settled, such as trade and economy, the customs, the quality inspections, the transportation infrastructure, energy and finance. This document will be a roadmap covering a broad scope with strong containment and feasibility, guiding the sustainable development of the SCO regional economic cooperation.
Major media of the Central Government: When President Xi visited Uzbekistan, what new consensuses have been reached between China and UZ on promoting the bilateral trade and economic cooperation?
Gao: UZ lies in Central Asia, marking an important hub on the traditional Silk Road. Since the independence of UZ 25 years ago, the political mutual trust and bilateral relationship between China and UZ has reached an unprecedented level. The old Silk Road increasingly shows great vitality with the rapid development of China-UZ relationship. In September 2013, after President Xi proposed the initiative of co-building the “Belt and Road”, UZ positively responded with it. Through the joint efforts of the two countries in the past three years, the “Belt and Road” co-built by China and UZ made encouraging progress. The two countries strengthened their docking. The Chinese MOFCOM signed the document of expanding the trade and economic cooperation under the framework of co-building the “Belt and Road” with the Ministry of Foreign Trade and Economy of UZ. Highlights can be seen in a series of fields such as transportation, energy and chemical engineering.
After 3 years， on June 22, President Xi successfully paid a state visit to UZ again. President Xi and the President of UZ Islom Karimov.decided to lift China-UZ relationship to a comprehensive strategic partnership. This injects new power into the two countries’ bilateral trade and economic relationship. During this visit, China and UZ reached the following three important trade and economic consensuses:
Firstly, promote the trade of the bulk commodities. The Chinese MOFCOM signed the MOU on the Bulk Commodities Trade with the Ministry of Foreign Trade and Economy of UZ. Both sides agreed to set up the trade cooperation working group under the trade and economy cooperation sub-committee of China-UZ inter-governmental cooperation committee to strengthen market supervision, improve trade conditions and create trade mode.
Secondly, promote the investment and economic and technical cooperation. The Chinese MOFCOM signed the MOU on Investment Cooperation with the Ministry of Foreign Trade and Economy of UZ, promoting the enterprises and financial institutions to sign a batch of investment and financing cooperation documents, supporting the economic and technical cooperation in the fields such as airline, building materials and petrochemical engineering of UZ. At the same time, the two sides agreed to build the Djizak industrial park into an important platform for the two countries to conduct investment and capacity cooperation, to attract the Chinese enterprises to settle down in groups and to promote the industrialization of UZ.
Thirdly, actively implement the people’s livelihood projects. China provided financial support for the affordable rural housing construction project led by the President of UZ. The aim is to promote the improvement of the livelihood of UZ and to maintain the social stability.
Major media of the Central Government: The Heads of the states jointly attended the video connection of the opening ceremony of the railway tunnel project. Can you introduce the important meaning of this project for the two countries regarding their joint building of the “Belt and Road”?
Gao: This railway marks a significant project for UZ, listed as the “President No.1 Project”. The railway is 129 kilometers. The Kamchiq tunnel is the key to the whole line. This tunnel is 19.2 kilometers, being the crucial and difficult road in the construction of this railway with its long distance and difficulty. This tunnel is implemented under the US$350-million favorable export buyer’s credit provided by China, marking China’s largest contractual EPC project in UZ. This is the largest railway tunnel in Central Asia. The completion of this tunnel will link the three states of Ferghana Valley of Southeast UZ to the other regions of UZ and will be of great importance to improving the railway network of UZ, perfecting the transportation conditions of Ferghana Valley and promoting the economic development of UZ. This railway tunnel is the component part of the China-Kyrgyzstan-Uzbekistan railway in the future. The completion of this project will help UZ play its potential of transit transport. This is a significant achievement of the two countries’ jointly building the “Belt and Road”. This is also a new bond of the friendship and cooperation of the people of the two countries.