Eagle Intelligence Reports
The Shanghai Cooperation Organization (SCO) stands at a pivotal moment. As the leaders of the non-Western world met at the 25th annual meeting of the Council of Heads of SCO Members in the Chinese port city of Tianjin from August 31 to September 1, the summit – the largest in SCO history — illustrated how major powers are converging outside the Western orbit.
Besides attending several multilateral sessions, the leaders also convened important side meetings during the SCO summit. One of the most important encounters visible was among Chinese President Xi Jinping, Indian Prime Minister Narendra Modi, and Russian President Vladimir Putin. They all laughed, smiled, and choreographed their harmonious ties. Yet, the warmth seen in their cordial exchanges masked wedges in their trilateral relations.
Unlike many older international institutions, the SCO’s foundations have Chinese characteristics. The People’s Republic of China (PRC) helped create the SCO after the Cold War and has guided its development ever since. This year, Beijing leveraged its status as SCO chair to position the PRC as the leader of the non-Western world, with Russia as its “senior junior” partner. In his keynote speech at the summit, Xi depicted China and the SCO as confronting “shadows of Cold War mentality and bullying,” code words criticizing US policies.
In his keynote speech at the summit, Xi depicted China and the SCO as confronting “shadows of Cold War mentality and bullying,” code words criticizing US policies
Xi’s architectural ambitions were most evident in his new Global Governance Initiative (GGI), which is designed primarily to appeal to the aspirations of the Global South for more international influence. Whereas Western governance proposals frequently address improving internal governance in line with liberal democratic principles, the GGI calls exclusively for promoting a more just multipolar world order based on the principles of sovereign equality, international law, multilateralism, a people-centered approach, and concrete outcomes.
In addition to making the SCO a GGI prototype, China has been harmonizing the SCO with its other principal multinational structures. These include the Belt and Road Initiative, the Brazil-Russia-India-China-South Africa (BRICS) bloc, the Global Development Initiative, the Global Security Initiative, and the Global Civilization Initiative. Despite launching these more recent instruments, the attention and other resources devoted to the Tianjin summit underscored that Chinese support for the SCO remains strong.
The media attention to Modi’s presence at the summit highlights India’s pivotal position in Asia’s great power geopolitical dynamics. Modi made his first trip to China in seven years to attend the SCO summit. However, India’s role in the SCO is less important than Modi’s relations with Xi and Putin. The Sino-Indian reconciliation began last year but has accelerated in recent months as New Delhi has sought to compensate for its deteriorating ties with Washington.
Though substantive outcomes from Modi’s visit were lacking, his presence reinforced India’s posture of inclusive strategic autonomy, with a diversified portfolio of partners. Indian officials share the PRC’s concerns about US tariff policies and sanctions on Russian oil imports. Though the Indian government declined to support a mid-June SCO statement censuring Israel for its “aggressive actions” against Iran, Modi accepted such language in the Tianjin declaration, probably because the text also referenced terrorist attacks against India.
Notwithstanding Xi’s declaration that the Chinese dragon and the Indian elephant can dance together, Modi skipped Xi’s September 3 military parade and the September 8 virtual BRICS summit, presumably to underscore Indian independence from bloc politics. India’s geopolitical maneuvering also induced European governments to intensify efforts to secure the EU–India Free Trade Agreement. In effect, New Delhi and Beijing have achieved tactical reconciliation, but not a strategic one. The major sources of Sino-Indian tension persist: their unresolved border dispute, China’s military ties with Pakistan, their heavily unbalanced trade ties, and Sino-Indian divergences regarding the Dalai Lama’s succession and other regional and value issues.
New Delhi and Beijing have achieved tactical reconciliation, but not a strategic one. The major sources of Sino-Indian tension persist
The Russian government routinely promotes non-Western multinational institutions, such as the SCO, as tools to disrupt the established international order. The Kremlin views its partnership with Beijing as critical for realizing this goal. Putin spending an atypically lengthy period, four days, in China underscores this priority. In his interactions with the PRC leadership, Putin held the place of honor, standing to Xi’s right. Xi and Putin both describe the SCO as a new type of structure, with a balanced and inclusive approach to international relations that does not privilege Western countries at the expense of others.
In his presentations to the summit, Putin endorsed Xi’s GGI and underscored the SCO’s potential to supersede outdated Euro-Atlantic models with a more just and balanced economic and security structure that is independent of the West. Furthermore, Putin told the attendees that the cause of the Russia-Ukraine war was not Moscow’s invasion but the West’s alleged overthrow of the Ukrainian government in 2014 and attempts to incorporate Ukraine into NATO. Though no other attendee openly supported Moscow’s war, none openly questioned Russia’s invasion either.
Putin endorsed Xi’s GGI and underscored the SCO’s potential to supersede outdated Euro-Atlantic models with a more just and balanced economic and security structure that is independent of the West
The Russian government has promoted Sino-Indian reconciliation to keep New Delhi independent of the West, remove an impediment to Russia-Indian defense ties, and revive the Moscow-initiated Russia-India-China troika. In addition to their brief trilateral encounter with Xi, Putin and Modi held a lengthy side meeting in Tianjin, which included spending over an hour in Putin’s limousine. Putin praised how their presence underscored that the SCO “brings together … the leaders of the Global South and East to build an architecture of equal and indivisible security across Eurasia.”
Despite its modest origins as a small annual gathering among the leaders of China and its four newly independent post-Soviet neighbors, the SCO has become Eurasia’s most important regional institution. Its members have considerable collective potential in terms of population, geography, and economic size. They include some of the world’s leading economic and military powers. The SCO’s pivotal position indicates that its evolution could significantly impact Asia, Europe, and the Middle East.
As more heads of state and government attended this summit than before, additional SCO partners expressed interest in eventually becoming full members. Their entry could further enhance the organization’s international impact, especially in the Global South, including the Middle East, which offers promising prospects for future growth. In recent years, Iran became a full member, while Saudi Arabia and the UAE have become formal SCO partners. China, Russia, India, and the other SCO members in Asia are eager to increase their ties with the Gulf states, especially for economic reasons.
The Middle East offers promising prospects for future growth. In recent years, Iran became a full member, while Saudi Arabia and the UAE have become formal SCO partners. China, Russia, India, and the other SCO members in Asia are eager to increase their ties with the Gulf states, especially for economic reasons
Yet, membership could further challenge the bloc’s cohesion unless members accede to the Russian proposal to relax the organization’s consensus decision-making rule. The organization’s sweeping agenda — encompassing economic, security, and other issues — already facilitates differences. As leading energy exporters, Russia and Iran favor higher hydrocarbon prices, while China and India seek discounted energy imports. Member governments also differ regarding groups and actions they have defined as supporting terrorism.
These divergences have diluted the SCO’s security potential. The organization has never resembled a NATO-like military alliance. It lacks an integrated command structure, and the importance of its recent security exercises has decreased since Moscow invaded Ukraine. Though the SCO provided the People’s Liberation Army (PLA) with some of its first opportunities to deploy military forces in foreign exercises, the joint Sino-Russian exercises and patrols — which have occurred in Europe, the Middle East, and East Asia — have become substantially more significant for the PLA than the multinational SCO drills that have taken place only in greater Central Asia. In that region, Russia has prioritized participation in the Collective Security Treaty Organization, a genuine Moscow-led military alliance that excludes China. Meanwhile, the new SCO members have typically sent only small contingents or unarmed observers to recent exercises.
Beijing has renewed its previous efforts to prioritize the SCO’s economic development. In Tianjin, China offered 2 billion RMB (USD 280 million) in grants, combined with 10 billion RMB (USD 1.4 billion) in loans, to other members. The GGI also promoted Beijing-friendly economic principles such as ending trade and investment constraints. Commercial cooperation represents China’s source of comparative advantage as it has the largest SCO economy. Last year, the PRC’s annual trade with the other SCO members exceeded $500 billion. China is also a leading source of loans and direct investment. The PRC would benefit if economic barriers among SCO members decreased.
But the SCO has traditionally lagged in promoting economic cooperation. One reason for this gap between aspirations and achievements is that SCO governments have traditionally preferred bilateral deals. Furthermore, SCO members have divergent economic policies and priorities. Though Moscow and India have recently joined China in favoring mutual trade and de-dollarization to reduce their exposure to US tariffs and sanctions, they have regularly sought to shield their economies from low-cost Chinese products and constrain PRC investment in their strategic infrastructure. It would be unsurprising if they sought to hobble the potential of the newly created SCO Development Bank to advance the PRC’s economic primacy.
Moscow and India have recently joined China in favoring mutual trade and de-dollarization, but they have regularly sought to shield their economies from Chinese products and constrain PRC investment in their strategic infrastructure
A potential wildcard challenge could come from Washington. Though the SCO had alarmed the US national security community when the United States was trying to sustain a robust military presence in Central Asia after the September 2001 terrorist attacks from neighboring Afghanistan, the US government has largely ignored the organization during the past decade. Since this year’s summit took place in China and attracted such prominent world leaders, the gathering renewed alarmist media commentary in the run-up to the event. However, the media quickly shifted focus to the splashier Chinese military parade that occurred a few days later, attended by more governments overtly hostile to the United States than appeared at Tianjin.
Trump was very hostile to the recent BRICS summit in Brazil, warning that he would impose additional tariffs on countries challenging the US dollar. He also remarked on his Truth Social media platform that Putin, Xi, and North Korean leader Kim Jong Un were using their trilateral meeting at the parade to “conspire against The United States of America.” In contrast, he initially downplayed the SCO summit. It was not until a week after the meeting that he made the belated Truth Social comment that it “Looks like we’ve lost India and Russia to deepest, darkest, China. May they have a long and prosperous future together!”
Though Trump’s jocular tone and public nonchalance might be tactical, for now, he seems confident in US military and economic superiority over hostile regimes, believing he can leverage these countries’ interest in maintaining good relations with the United States, and that his personal diplomatic skills can sustain decent relations with potential foreign adversaries. Following his comment, he and Modi praised each other and their cordial personal ties in reciprocal social media postings. However, other Asian democracies would likely join the United States in confronting the SCO, should US policies toward the organization toughen.