SCO working on use of national currencies in mutual settlement, says secretary-general
Published: May 10, 2023 10:13 PM
Zhang Ming, Secretary-General of the Shanghai Cooperation Organization at a media conference in Beijing on May 10, 2023 Photo: Xie Wenting/GT

Zhang Ming, Secretary-General of the Shanghai Cooperation Organization at a media conference in Beijing on May 10, 2023 Photo: Xie Wenting/GT

The central banks and finance ministries of Shanghai Cooperation Organization (SCO) member states have begun drawing up a roadmap to use national currencies in mutual settlement, SCO Secretary-General Zhang Ming said on Wednesday.

Zhang also noted that they are discussing setting up an SCO development bank.

Zhang made the remarks in Beijing on Wednesday at a media briefing. When asked about the use of the national currencies in trade among member states, Zhang said that the SCO attaches great importance to pushing forward economic cooperation, and an expert group is working on creating conditions to realize this goal.

In September 2022, leaders of the SCO agreed to increase the use of national currencies in mutual settlement, according to the Samarkand Declaration.

In addition to facilitating trade and economic cooperation among its members, the SCO is now gaining increasing popularity, which is clearly shown in the number of countries applying for SCO membership.

Zhang said that the expansion of the SCO shows that the basic principles and values that the SCO has adhered to have gained more and more recognition, and the mechanism of the SCO contributes to the peace and stability of the region.

"It's not intentional to pursue the expansion. This [expansion] just happens naturally," Zhang said.

Currently, the SCO has eight member states, four observers and 14 dialogue partners.

As to whether the expansion might lower the efficiency of the SCO, Zhang pointed out that theoretically the expansion may reduce efficiency but in reality this has not happened.

He gave an example that after India and Pakistan joined the SCO in 2017, the efficiency of the organization has not been affected.

At the same time, the SCO is keeping pace with the times and is actively promoting modernization of the organization, according to Zhang.

In recent years, a growing number of countries in the Middle East have shown enthusiasm for joining the SCO.

In March, Saudi Arabia approved a memorandum on becoming a dialogue partner with the SCO. In the just-concluded Council of Foreign Ministers meeting in India in May, Kuwait and the UAE together with Myanmar and the Maldives signed a memorandum on becoming dialogue partners with the SCO. Iran will also become a full-time member of the SCO.

Zhang said that the principles of the SCO have now won widespread recognition in the Middle East. As the region is facing common threats and challenges, the SCO will help maintain the peace and stability of the region and provide a better environment for development.

According to the SCO's website, the SCO pursues its internal policy based on the principles of mutual trust, mutual benefit, equal rights, consultations, respect for the diversity of cultures and aspiration toward common development, and its external policy is conducted in accordance with the principles of non-alignment and openness.

However, some Western media reports have claimed that China is using the SCO as a lever to expand its influence in the Middle East to challenge the US. Zhang dismissed these reports, saying it was not a commonly held viewpoint.

He emphasized that the SCO is an open and cooperative organization, which adheres to the principles of non-alignment, peace, security and stability. It doesn't accept the Cold War mindset. According to Zhang, the SCO should not be compared with NATO as it is not a political or military bloc.

The SCO will follow its own path of development and make contributions to regional development and prosperity, Zhang said.

Asked about whether the SCO will set up a communication mechanism for settling disputes between member states, Zhang said that so far, no member state has expressed a desire for such a mechanism.

He said the cornerstone of the SCO is the common values that member states adhere to, and the SCO pushes forward cooperation that creates a favorable environment among member states.

In terms of counter-terrorism, Zhang said that more than 20 years ago, the region was plagued with terrorism and extremism. Since the foundation of the SCO - which initially focused on mutual intraregional efforts to curb terrorism, separatism and extremism in Central Asia - these problems have been effectively curbed.

At the same time, Zhang stressed that the SCO doesn't have the function of joint defense.

The population of SCO member states is now about half of the global population, and its GDP exceeds 23 trillion yuan ($3.32 trillion). The SCO is also tackling new challenges such as the safety of energy, food and climate change, he said.