Shanghai Cooperation Organisation (SCO) and Global South strategic cooperation


Sinnavuuty

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Iran, Russia, China to hold joint naval exercise this autumn — Iran’s General Staff​

According to Chief of the Iranian Armed Forces’ General Staff, Mohammad Bagheri Pakistan, Oman and a number of other countries will probably also take part in these activities

MOSCOW, September 22. /TASS/. Iran, Russia and China plan to hold a joint naval exercise this autumn, the Chief of the Iranian Armed Forces’ General Staff, Mohammad Bagheri, told a news conference at a parade of the Iranian Armed Forces on Thursday.
"Exercises involving the navies of Iran, Russia and China will be held in the northern part of the Indian Ocean this autumn," the Mehr news agency quotes Bagheri as saying. "Pakistan, Oman and a number of other countries will probably also take part in these activities."
Last time the three countries’ military personnel teamed up for joint drills was within the framework of Vostok-2022 exercise, which Russia held on September 1-7. Military personnel from China, India, Belarus, Armenia, Kazakhstan, Mongolia, Tajikistan, Azerbaijan, Algeria and other states took part. The active phase of the war games was monitored by high-level military delegations from Armenia, Bangladesh, Belarus, Venezuela, Iran, Kyrgyzstan, Mongolia, the United Arab Emirates and Pakistan. Defensive and offensive operations were practiced at the training grounds of the Eastern military region, as well as the Sea of Okhotsk and the Sea of Japan.
 

tphuang

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Speaking of Iran. I saw a tweet today that showed Iran/China trade increasing by 19% in first 8 months of 2022. It amounted to $11.16 billion.

From this article in start of the year, they talked about using Yuan in China/Iran trade and increasing viability of Yuan for Iran regime. However, I have not seen more sources on where they are in terms of Iran using Yuan or CIPS.
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The main adopter of Yuan usage is still in ASEAN countries. From July
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Li’s comments on yuan internationalisation come after the Ministry of Finance held its largest offshore yuan sovereign bond sale in six years last month, auctioning off
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in Hong Kong.

Since it came into effect at the start of the year, Li said some RCEP members have increased their yuan reserves, while others have established bilateral swap arrangements, like the one launched between China and Indonesia in September.
also on HK's role in this and it's joining RCEP
“[Hong Kong] can support these countries to build the market infrastructure for the renminbi and cater for the renminbi needs of corporations and people in the region,” she said, adding Chinese companies involved in the belt and road plan are focused on renminbi settlement and lowering exchange costs.
HK is pretty mature financial center, so it has experience with financial product which Shanghai might not have as much. That's why the off shore RMB (CNH) is centered in HK
“London and Singapore are proactively developing the offshore renminbi business, it reflects that renminbi has been increasingly accepted by overseas investors,” Li said.
“Hong Kong, which acts as the centre for the global offshore renminbi business, will continue to support renminbi business development in the region with its strengths in [financial] market, products as well as capital.”

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it's not a surprise that after the recent SCO, there is growing call for increasing Yuan usage in Central Asia (as evident in the recent China-Eurasia Expo in Urumqi).
"Such an idea has been more frequently pondered in recent months, and our cooperation partners - the exchanges in Uzbekistan and Belarus - also agree to include yuan settlement once conditions are ripe," Zhang said, noting that for the settlement of commodities such as timber, minerals and consumer goods, switching to the yuan would greatly benefit the exchange
Here we see Belarus is also entering the fold of Yuan settlement. Clearly, China would like to be able to buy natural resources with RMB.
One day earlier, in a meeting between the heads of state of China, Russia and Mongolia, work for more outcomes in trilateral cooperation and the expansion of settlement in local currencies in trade were also stressed.

Russian and Mongolian financial institutions were welcome to join the yuan-based Cross-border Interbank Payment System to build a strong bulwark of financial security in the region
and of course, Russia/Mongolia will be increasingly using CIPS and Yuan settlement.

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Overall, quite the banner Expo. BRI is tremendously helpful to Xinjiang economy.
In the first eight months of this year, Xinjiang's trade with Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, and Turkmenistan surged 54.7 percent year-on-year to 111.16 billion yuan, Xinjiang Daily reported on Sunday, citing data from the local customs authority. Exports soared 66 percent year-on-year to 94.87 billion yuan.

Xinjiang's trade with five central Asian countries accounted for 76.4 percent of Xinjiang's total trade during the period. Xinjiang contributed to over one-third of China's total foreign trade with these countries.
here is the part China really cares about from SCO countries
Together with observer states, SCO member countries possess about 25 percent of global crude reserves and output, 30 percent of global refining capacity, 44 percent of global natural gas reserves and some 60 percent of global uranium production.
That's a lot of critical resources. It seems like they are a few years away of really completing the build up of all these projects along Central Asia and into the Middle East.
 

tphuang

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first cargo train from China to Afghanistan through Xinjiang, Krygystan and Uzbekistan arrived on Thursday. The trade route to Afghanistan is pretty important long term. Part of the long term importance of the future CKU railway is to connect to Europe as well as to Afghanistan and Pakistan and into Indian Ocean.
 

broadsword

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first cargo train from China to Afghanistan through Xinjiang, Krygystan and Uzbekistan arrived on Thursday. The trade route to Afghanistan is pretty important long term. Part of the long term importance of the future CKU railway is to connect to Europe as well as to Afghanistan and Pakistan and into Indian Ocean.

If there is an existing rail transport to Afghanistan via these countries, why was there a plan to build a new railway?
 

taxiya

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I found this youtuber recently, he talked about the meaning of SCO to China recently, here is the link

As the title states "SCO's true meaning is that China is preparing for disengagement of western market". RMB, natural resources and population/market all serve the purpose. To some extent this moment is like the breaking of the world into west and east in the 1950s.

One further thought is that I expect BRI and Russia's Euroasian Economy Union since they are very much overlapping already.
 

coolgod

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He touched on the Belarus news, which I think is pretty big news that wasn't discussed much here. China and Belarus established all-weather comprehensive strategic partnership, this level is only achieved by Pakistan. Belarus also started the SCO full membership process, which means both Russia and China approved, unlike the many other SCO potential members waiting years in queue.

Lukashenko should be meeting Xi in China soon
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I think @Temstar prediction is pretty good, this rapid increase in China-Belarus relations means something more concrete than just building more Chinese factories in Belarus. Xi is probably a good "salesperson", like the character in Year Hare Affair.
Logistics is a problem that can be solved by throwing more man and machine at it.
Man problem has just been resolved by the partial mobilization, hopefully.
As for machine well, Belarus just gained the
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title with China at SCO, the only country other than Pakistan to have it. If they want to buy lots of trucks from China who can tell them what they can and can't use them for?
 

Minm

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Speaking of Iran. I saw a tweet today that showed Iran/China trade increasing by 19% in first 8 months of 2022. It amounted to $11.16 billion.

From this article in start of the year, they talked about using Yuan in China/Iran trade and increasing viability of Yuan for Iran regime. However, I have not seen more sources on where they are in terms of Iran using Yuan or CIPS.
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Lots of the trade with Iran is barter trade or hidden oil exports with ship to ship transfers. So the statistics are probably not very reliable

Apparently, China has been partially paying with Yuan for more than a decade already and using the dollar is usually illegal, so I'd be surprised if much of Iranian trade is still done in dollars

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tphuang

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If there is an existing rail transport to Afghanistan via these countries, why was there a plan to build a new railway?
If you read that article, it's actually a mix of road + rail. The terrain around central asia isn't great for transportation. Even transportation between China and Pakistan only has Karakoram highway I think due to terrain. Building CKU is going to take quite the engineering prowess.
He touched on the Belarus news, which I think is pretty big news that wasn't discussed much here. China and Belarus established all-weather comprehensive strategic partnership, this level is only achieved by Pakistan. Belarus also started the SCO full membership process, which means both Russia and China approved, unlike the many other SCO potential members waiting years in queue.

Lukashenko should be meeting Xi in China soon
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I think @Temstar prediction is pretty good, this rapid increase in China-Belarus relations means something more concrete than just building more Chinese factories in Belarus. Xi is probably a good "salesperson", like the character in Year Hare Affair.
Yeah, that was kind of weird. Belarus and China have had good relationship in the past, but I didn't think Belarus was significant enough to deserve all-weather status.

Looks like China and Vietnam had a good meeting this week. Aside from trade blossoming, an entire paragraph here of code of conduct in SCS. Let's hope they can agree to something that will make every happy.
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As important as it is to work together with SCO countries, ASEAN countries are more important to China. The other 2 pillars of global south are Africa and Latin America. SCO isn't the only place China is trying to shore up relationships.
 

getready

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Coincidentally, I was watching a short video clip of kishore mahbubani giving a speech during pacific dialogue, that someone sent me yesterday. I don't think I can embed it here unfortunately.

But he also mentioned the importance and potential of ASEAN which the anglo Saxon media has neglected and the lack of understanding that this region brings in terms of global economic growth along with China, India. Add NG them together, he termed the group CIA lol. He also brought up the fact ASEAN region isn't interested in increasing unstability and tensions. They want to trade instead of fight wars like in Ukraine. All of this is of course music to China's ears
 
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