_ Chris Devonshire-Ellis, Founding Partner and Chairman, Dezan Shira & Associates. Hong Kong, 15 August 2017.
The coming together of China’s OBOR ambitions with the Russian backed free trade area the Eurasian Economic Union, together with the members of the Shanghai Co-Operation Organisation, is an issue that has been discussed at the highest levels. While China’s OBOR plans have been well discussed, lesser known are the Shanghai Co-Operation Organisation (SCO) and Eurasian Economic Union (EAEU). Yet, both are powerful entities and becoming increasingly so.
The Shanghai Co-Operation Organisation was established at Beijing’s initiative back in 2001, and is a Eurasian political, economic, and security organization. Membership has expanded over the years, and it now includes China, India, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan, and Uzbekistan. Afghanistan, Belarus, Iran, and Mongolia are observer nations, with Iran expected to become a full member shortly. Dialogue partners include Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka, and Turkey.
The SCO’s main function is as a platform for the discussion and resolution of issues affecting the region, including security, political, cultural, and economic development.
The Eurasian Economic Union was formed in 2014 as a free trade bloc, and includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. Intended as a Russian answer to the EU, it has an integrated single market of some 183 million people and a GDP of over US$4 trillion (PPP). Multiple nations are currently negotiating Free Trade Agreements with the EAEU, including China, India, and Iran, among others. The implications for Europe, should these be successfully concluded, are immense – it would effectively bring Chinese products right to the border of the European Union
The idea of merging these organizations or at least expanding trade cooperation between them, has been discussed by both China’s President Xi Jinping and Russian President Vladimir Putin. The concept, dubbed the Great Eurasian Partnership could be a global game changer, especially when one considers that it may also include the ASEAN nations – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.