Afternearly20yearsofdevelopment,theShanghaiCooperationOrganization(SCO)hasbecomearegionalorganizationcoveringthemostareaandthegreatestpopulationintheworld.Inthelongrun,thefinancialsectorwillbeacrucialareaforcooperationamongSCOmemberstates.
AttherecentlyconcludedSCOQingdaosummit,participatingcountriesfullytappedintothepotentialoftheexistingSCOcooperationmechanismssuchastheSCOInter-bankConsortiumandtheSCODevelopmentFundbyfurtherdeepeningcooperation.Byexpandingthescopeoflocal-currencysettlement,carryingoutpragmaticcurrencyswapcooperation,learningfromeachotheraboutestablishinginternationalfinancialcenters,andstrengtheningcooperationinfightingmoneylaunderingandterrorismfinancing,theyhavemadepositiveprogressinmaintainingregionalfinancialstabilityandimprovingthenewinternationalfinancialorder.
FinancialCooperationNecessary
WiththeexpansionofdevelopmentoftradeandinvestmentrelationsbetweenmemberstatesandtheadditionofIndiaandPakistantotheSCO,investmentcooperationbetweenChinaandotherSCOmemberstatesintourism,cultureandfinancehasspikedandbecomealong-lastingdevelopmenttrend.
StrengtheningfinancialcooperationistremendouslysignificanttothedevelopmentoftheSCOforavarietyofreasons.
First,itisaninevitabletrendtopromoteSCOeconomicandtradecooperationanddeepenregionaleconomictransformation,upgradingandintegration.
Second,itwillplayanimportantroleinpromotingtheimplementationoftheBeltandRoadInitiativeproposedbyChina.
Third,promotinglocal-currencysettlementcooperationbetweenSCOmemberstatescaneffectivelyhedgeexchangerateriskandpromotetheRMB鈥檚globalstatus.
Fourth,SCOmembercountriesshouldhelpandlearnfromeachotheraboutcombatingmoneylaunderingandterrorismfinancing,establishingregionalinternationalfinancialcentersandjointlypromotingregionaleconomicandfinancialdevelopment.
Fifth,itisconducivetomaintainingstabilityofthefinancialsectoracrosstheentireregion,promotingcoordinatedandconsistentpolicytopreventpotentialcrises,fosteringcooperationinreformingthenewinternationalfinancialorder,andstrengtheningthecohesionandsolidarityoftheSCO.
PragmaticCooperationinCurrencyExchange
Promotinglocal-currencysettlementandcurrencyexchangeisanimportantfacetofSCOfinancialcooperation.
TradebetweenSCOmemberstatesislarge-scaleandfrequent.Toreducetransactioncostsandavoidrisk,memberstateshavebeenengagedinseveralroundsofconsultationtostrengthenusageoffinancialinstruments,improvefinancialcooperationandhelpbankcardclearinginstitutionsandpaymentagenciescarryoutcross-borderbusiness.
Inrecentyears,thePeople鈥檚BankofChinahassignedbilaterallocal-currencyswapagreementswithseveralcountriesandregionsundertheSCOframeworkincludingRussia,Kyrgyzstan,Kazakhstanandotherneighboringcountries.
InAugust2002,local-currencysettlementbusinesswasfirstlaunchedinbilateraltradebetweenChinaandRussia.By2009,transactionvolumehadincreased67timesover.ChinahasalsocarriedoutdirectorregisteredcurrencytransactionswithKazakhstanandothercountriestofacilitateitstradeandinvestmentcooperationwiththosecountries.
DuringtheSCOQingdaosummit,participantsdiscussedfurtherpromotinglocal-currencysettlementinbilateraltradeaswellashowtograduallyexpandittogeneraltradeandnon-tradeareas.AstonetabletinfrontoftheheadquartersoftheAsianInfrastructureInvestmentBank(AIIB)inBeijing.Foundedin2016,AIIBistheworld鈥檚firstmultilateralfinancialinstitutionestablishedundertheproposalofChina.byLiXin/XinhuaFightingMoneyLaunderingandTerrorismFinancing
CombatingterrorismisanimportantdutyandmissionoftheSCO.StrengtheningcooperationinfightingmoneylaunderingandterrorismfinancingisanotherimportantsectorforfinancialcooperationamongSCOmemberstates.
OnOctober6,2004,theEurasianGrouponCombatingMoneyLaunderingandFinancingofTerrorism(EAG)waslaunchedinMoscowbyChina,Russia,Belarus,Kazakhstan,TajikistanandKyrgyzstan.
Subsequently,Uzbekistan,TurkmenistanandIndiaalsojoinedthegroup.Observerstatushasbeengrantedto15countriesand20internationalorganizations.
Withaimstoreducethethreatofinternationalterrorism,ensuretransparency,reliabilityandsecurityofcapitalflows,integrateintotheinternationalfinancialsystemandintensifythefightagainstmoneylaunderingandterrorismfinancing,EAGhasbecomeanimportantplatformfornon-traditionalsecuritycooperationwithintheSCOframework.
DuringtheSCOQingdaosummit,participantsalsodiscussedhowtostrengthencooperationinestablishinginternationalfinancialcentersintheregion.TheChinesegovernmenthasexplicitlyproposedmakingShanghaiintoaninternationalfinancialhubby2020tomatchChina鈥檚economicstrengthandtheRMB鈥檚globalstatus.
Russia鈥檚MoscowandKazakhstan鈥檚Astanahavealsodesiredtobecomeinternationalfinancialcenters.Inaddition,Pakistan鈥檚KarachiandIndia鈥檚Mumbaibothintendtoexpandthecurrentconstructionofinternationalfinancialcenters.Duringtheprocess,countriesintheregioncouldlearnfromeachotherandprovidegreatersupportfordevelopmentoftheregionaleconomy.
ImprovingtheNewInternationalFinancialOrder
AlongsidethedevelopmentandexpansionoftheSCO,greatercooperationinpreventingandreducingtheimpactofthefinancialcrisistotheregionaleconomyandmaintainingfinancialstabilityintheregionandeventheworldhasbecomeincreasinglyimportantforSCOfinancialinstitutions.
OrganizationsincludingtheAsianInfrastructureInvestmentBank,BRICSNewDevelopmentBankandSCODevelopmentBankwillusecurrencyswapandotherinnovativefinancialinstrumentstoenhancethedevelopmentofregionaltransport,tradeandinvestmentfacilitationwhilecoordinatingnationaldevelopmentstrategiesofmembercountries.
Consideringthetrendofglobalizationandregionaleconomicintegration,theSCO,asaninternationalorganizationofdevelopingcountries,willseegreateropportunitiesaswellaschallengesinthefutureandhasalreadyshoulderedimportantresponsibilitiesinpromotingglobaleconomicgrowth,financialstability,tradereformandfinancialregulationformulation.Therefore,furthercooperationbetweenmemberstatesisneededtoestablishahealthierinternationaleconomicandfinancialorder.
AttheSCOQingdaosummit,undertheguidanceofthe鈥淪hanghaiSpirit,鈥漰articipatingcountriesexamineddualchannelsofsecurityandeconomiccooperationwhilecraftinganewmodelofregionalcooperationandacommunitywithsharedfuture.Forthelongrun,financialcooperationundertheSCOframeworkwillinjectcontinuousmomentumforthedevelopmentoftheorganization.
Theauthorisdeputysecretary-generaloftheCenterforBeltandRoadInitiativeStudiesattheChineseAcademyofSocialSciences.