Dmitri Trofimov, Senior research associate, Center for International Research, Moscow State Institute of International Relations (University) (Moscow, Russian Federation)

The Shanghai Process: Major Landmarks

The Shanghai Cooperation Organization (SCO) formed in June 2001 can be described as a regional structure at the beginning of the road. As a direct descendant (but not a legal successor) of the Shanghai Five it has a five-year-long history behind it. At the same time, the Shanghai Five was a result of thirty years of the Soviet/Russian-Chinese dialog on the border and territorial issues and the security problems. By the mid-1990s when three new states appeared in the zone of the former Soviet-Chinese border the bilateral mechanism of negotiations had to be transformed into a multilateral instrument. This happened in Shanghai in 1996 where the leaders of Russia, China, Kazakhstan, Kyrgyzstan, and Tajikistan signed an Agreement on Confidence-Building Measures in the Military Sphere in Border Areas.1 This document and the Moscow Agreement on Mutual Reduction of Armaments in the Border Area2 provided an impetus for setting up a permanent consultative mechanism of five countries known as the Shanghai Five. This was followed by the summits in Almaty in July 1998, Bishkek in August 1999, and Dushanbe in July 2000, at which the five leaders agreed, in principle, on specific trends of multilateral cooperation, extension of the format of the Shanghai process and its institutionalization.

It was in 1999 that the sides started translating into reality the 1996 and 1997 agreements. They set up a Joint Control Group (JCG) based on the ChinaRussia + 3 formula3 to conduct mutual inspections4 within the 100 km-wide zone of predictability and transparency of military activity on both sides of the former Soviet-Chinese border. The group met for its first sitting in November 1999 in Beijing. It was in the Chinese capital in November 2001 that a JCG meeting registered a planned reduction of military equipment made by Russia according to the 1997 Agreement. The joint group retained its five-member format after the SCO was formed. This was caused by a fundamentally important joint decision by Russia and China that neither the number of the participants in the 1996-1997 agreements should be increased nor similar agreements should be concluded within any extended format of the Shanghai Cooperation Organization.

The Five and, later, Six joined efforts to oppose international terrorism, illicit drug and arms trafficking, illegal migration and other forms of trans-border crimes. Since December 1999 these efforts have been coordinated by the so-called Bishkek Group of heads of law enforcement structures and special services that meet regularly in Kyrgyzstan.5

On 5 July, 2000 Dushanbe hosted the fifth Shanghai summit attended as a guest, for the first time, by President of Uzbekistan Karimov. The final declaration stated the intention of the five heads of state to transform the Shanghai Five into a regional structure of multilateral cooperation. The sides agreed that it would be advisable to complete the summits with meetings of heads of government and annual conferences of the foreign ministers (CFM). The prospects of institutionalization of the Shanghai process outlined in Dushanbe created a new term, the Shanghai Forum, actively used by Russia and its Central Asian partners.6

The Shanghai Cooperation Organization was set up on 15 June, 2001 at a meeting in Shanghai where the heads of six states (Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan) signed the relevant declaration. It was at that time that the main working structure, the Council of National Coordinators (CNC), was set up that immediately started organizing and cooperating all activities. The SCOs aims were described as strengthening all-round cooperation among the member states on the problems of security, defense, law enforcement, foreign policies, economy, environmental protection, including the use of water resources, and culture. The Convention on the Struggle against Terrorism, Separatism and Extremism signed in Shanghai stated that priority attention should be paid to the struggle against international terrorism, drug trafficking and illegal trade in weapons. There are plans to set up, under this document, a Regional Antiterrorist Structure (RATS) of the SCO the importance and sphere of interest of which will go beyond Central Asia.

The year 2001 registered the first steps toward economic integration within the SCO. On 14 September heads of government met in Almaty to sign the memorandum on the Main Aims and Trends of Regional Economic Ties. They also set in motion the mechanism of trade and economic consultations at the ministerial level, created working groups for various fields of branch cooperation. In connection with the tragic events of 11 September in the United States the premiers adopted a joint statement that resolutely condemned the terrorist acts and confirmed the SCO readiness to cooperate closely with other states and international organizations in combating this new threat.

It is expected that the seventh summit to be convened in June 2002 in St. Petersburg will sign an agreement on setting up a Regional Antiterrorist Structure, endorse its Charter and other statutory documents. This will complete the process of making the SCO an international organization.

Settling Border Problem

The process of settling the old border and territorial problem was moved much further on by the efficient multilateral mechanism of building up confidence in the military and political spheres.7 It should be said, at the same time, that under Beijings influence the Central Asian partners of Russia moved the talks from the legal to the political field. It was on that basis that Kazakhstan in 1998 and Kyrgyzstan in 19998 resolved the problem through unilateral territorial concessions. By the middle of 2001 Beijing applied the tactics of territorial shares that had justified itself earlier in case of Bishkek to its talks with Dushanbe. Tajikistan moved away from the historical borderline and transferred to Beijing 1 thousand sq km of its territory along the Sary Kol range in the Pamir. These concessions added tension to territorial talks between China and Russia. However, the logic of the Russian-Chinese dialog that lasted for many years allowed the sides to sign, in July 2001, the Treaty on Good-Neighborly Relations, Friendship and Cooperation that officially confirmed that the sides had no territorial claims on each other.9

Extension of the Shanghai Cooperation Organization

Even before the Dushanbe summit and up to the next meeting in Shanghai there were discussions of one of the most sensitive and painful questions: should the number of members be increased and should Uzbekistan be admitted to the Shanghai Forum? It was Russia, and later China, that supported the idea of Tashkents involvement in the Shanghai process. The former, probably, expected to gradually draw Uzbekistan back into its sphere of influencethese expectations proved, on the whole, futile.

First, the recent practice of bilateral relations between Uzbekistan and Russia and their interaction in all sorts of international structures has testified that Uzbekistan is the least predictable and least reliable Russian partners. Tashkent could never accept, and indeed, rejected, the pro-Russian formula ChinaRussia + 4 that was planned to be adopted in the SCO to replace the old one ChinaRussia + 3. What was more, Tashkent is prepared to reject, as a matter of principle, any institutionalization, connected with Russia in the first place, that might create supranational integration structures and the need to abide by their decisions. Its recent tactics within the Collective Security Treaty that boiled down to its regular statements of drawing out of it10 gave every ground to expect similar behavior within the SCO. The first sign of this appeared immediately after the Shanghai summit was over.11 If one takes into account the traditionally tense relationships between Tashkent, on the one hand, and Astana, Dushanbe and Bishkek, on the other, there is every ground to expect elements of confrontation in the SCO because of the Uzbek membership. The Uzbek leaders may even exploit the slightest contradictions between Russia and China, and Russia and Central Asia. In addition, Tashkent obviously joins cooperation programs (probably, except the antiterrorist bloc) in an effort to boost its regional status. Its membership in the SCO was no exception. We should not forget that for many years Uzbekistan was looking at the United States, the bias being even more obvious during the antiterrorist operation in Afghanistan. In these conditions Uzbekistans membership in an international structure that invited a lot of Western attention is hardly in the interests of Russia or China.

Astana, Bishkek, and Dushanbe treated with great caution Tashkents involvement in the Shanghai process, yet being aware of its inevitability (because Russia and China insisted on it) Kyrgyzstan and Tajikistan tried to tap part of the SCO potential to apply international legal brackets to their awkward neighbor. All attempts to push Tashkent to the place of a junior partner were doomed from the very beginning. At the same time, it was five members that prepared the SCO constituent documents12 signed in Shanghai. Uzbekistan was merely invited to join them. There was another idea that remained unrealized: to oblige Uzbekistan and all possible future members of the Shanghai process to join the 1996 and 1997 treaties. At the same time, the three Central Asian members insisted on the Declarations fifth point being probably the most important for them. It envisages, among other things, abandonment of unilateral military domination over the neighboring areas.

The SCO Declaration describes it as an open structure. Today, its members obviously want closer and more efficient cooperation with other countries and corresponding international and regional structures. On the other hand, India, Iran, Pakistan, Sri Lanka, Mongolia, the United States, Japan, and the ASEAN countries have displayed their interest in the SCO and its activity. Still, before its statutory documents are enacted the number of its members will hardly increase. It seems that various participation levels can be advised within the SCO Charter: permanent members, project partners, observers. The G7 procedural experience may become useful. For example, the aspirant states having acquired a joint agreement of the founders about their membership should proceed to it through participation in meetings and/or projects dedicated to specific subjects. The date of full membership should not be fixed in advance: the final decision should be passed after a long and preferably practical cooperation. The sad experience of hasty admission of Uzbekistan confirms this.

It seems that in the short-term perspective Mongolian membership is relatively expedient and less painful.13 With its common borders (and corresponding problems) with China, Russia, and Kazakhstan Mongolia can be useful in contributing to the confidence-building measures within the SCO framework. To further strengthen itself the organization may display its interest in extending its cooperation with Pakistan,14 India, Iran, and Turkmenistan mainly in the economic sphere. Significantly enough, the six members have already demonstrated their readiness to discuss a possibility of SCO membership for Afghanistan in the process of resurrection in (not nearest) future.


All SCO members participate in the Conference on Interaction and Confidence-Building Measures in Asia (CICA). President Nazarbaev of Kazakhstan who initiated it in 1992 is convinced that the structure has a potentiality of becoming an all-Asian OSCE. Astana expected that the CICA summit timed to the ten years of Kazakhstans independence would resolve its certain status-related problems at the macro-regional and global levels. The republic responded with irritation to the delay caused by the antiterrorist operation in Afghanistan (the summit, planned for November 2001 was postponed till 2002). The irritation was also directed against the SCO partners that coolly responded to the idea and the summit in general that had been badly prepared.15

To a certain extent the future of SCO and CICA are interconnected mainly because of the position of Kazakhstan that insisted on tying the two processes together.16 Other SCO members treat the idea with reservations.

* * *

Stability of the Shanghai Five/SCO structure is still rooted in Russias and Chinas common interest in using its multilateral format to spur up their bilateral relations.

Their link within the SCO can potentially allow Russia to address its strategic tasks in the region despite the SCOs still loose nature (the organizational structures have not yet been put in place and there are ever present and unpredictable contradictions among its four Central Asian members). Here I have in mind the task of ensuring stability along Russias southern borders. By the mid-1990s the initial Russian desire to preserve its presence/control along the entire former Soviet border in the south corresponded neither to the real situation nor to Moscows possibilities. The CIS southern borders remain porous, therefore the border with Kazakhstan should receive adequate technical equipment to stop the uncontrolled flow of drugs, illegal migrants, undesirable Islamic literature, etc. to Russia. This is not cheap (the cost of technical border equipment may reach $1 billion) and is fraught with undesirable political effects. The SCO stabilizing potential may give very much needed time.

Second, the Central Asian transit potential is very important for Russia: it helps preserve and maintain its partner relations with China, India, and Iran.

Third, it is equally important for Moscow to remain in the common economic expanse with Central Asia that gives Moscow a chance of a future breakthrough in Russias economic modernization, and will help it stay on the regions capacious market and provide it with a steady (and sometimes only) source of import. Russia buys 87 percent of imported cotton, 70 percent of barley, and 54 percent of wheat in Central Asia. There is another priority: Moscow is seeking a greater role in the use of Central Asian hydropower and mineral resources (oil, gas, uranium, gold, silver, aluminum, boron, etc.). This applies, first and foremost, to Tajikistan and Kyrgyzstan with 86 percent of total water flow. If involved Russia will not only acquire a great deal of influence in the region but also, in a long-term perspective, a share in economically promising projects of selling energy to South Asia. Such ambitious projects require concerted efforts and the SCO may play an important role in them.

Fourth, Moscow needs the regions geostrategic potential to address Russias practical and status-related tasks of a regional and world power. For example, the Baikonur space launch complex still has no alternatives. Russia uses it for 70 percent of its launches. The Sary-Shagan anti-missile launching ground in Kazakhstan, the Russian radar stations at Lake Balkhash, and the long-range communication center of the Russian Navy in Kyrgyzstan are of strategic importance. There is also a recent addition: a surveillance optical electronic station Okno in the Pamir foothills (Tajikistan), a link in Russias system of space control. The 1999 treaty between Russia and Tajikistan envisages a Russian military base (that will use the 201st motor rifle division), yet the plans look ambiguous and call for more discussion and careful elaboration.

Fifth, Russia should tap the potential of the compatriots in Central Asia.17 On the one hand, in the middle term the Central Asian countries will remain a relatively important source of labor force.18 On the other hand, instead of stimulating the quantitatively inadequate outflow of Russians from Central Asia Moscow should use the very fact of their involvement in the strategically important and science-intensive branches to retain its economic and geopolitical presence.

Sixth, international recognition of its leading role in Central Asia (in the form of informal but, in fact, obligatory consultations on the regions key problems) is still important for Russia. It was in the Kremlins interests to preserve as long as possible the original ChinaRussia + 3 format of the Shanghai Five to emphasize the role of Russia as an envoy plenipotentiary of three Central Asian states. It seemed advisable to gradually extend and deepen the subjects of such representation progressing from the problems of security, military cooperation, and delimitation to political coordination and joint economic projects. The best result of the multilateral cooperation with China could have been much more efficient ties between Russia and Central Asia in the military-political and economic spheres. The prospect lost its importance when Uzbekistan joined the Shanghai process and America strengthened its positions in Central Asia.

We should recognize Chinas cementing role in the SCO: as long as Beijing remains interested in it the structure will remain vital and retain good prospects. The way the problem of institutionalization of the Shanghai Five was discussed is a relevant example. On the eve and during the Dushanbe summit the Chinese leaders demonstrated their cool attitude to the need to transform the rather amorphous structure with five members into a full-scale international organization, something on which Russia and the Central Asian partners were insisting. It was late in 2000, when the outcome of presidential elections in the United States had become clear, that Beijing decided to play the Shanghai card. Under different conditions Russias desire to transform the Shanghai Five might have remained unfulfilled.

Beijing looks at the Shanghai process as a chance to strengthen its positions in Central Asia as a promising region and to become an additional (if relative) pro-Chinese factor in the post-bipolar world. The Peoples Republic of China is seeking an asymmetrical answer to the U.S. global pressure. We should not overestimate the long-term effectiveness of the traditional anti-American component of cooperation between Russia and China (it was considerably played down in 2001). The present military and political presence of the United States in Central Asia is not so much a threat to both countries national interests19 as a strong irritant that adds to Moscow and Beijings tactical interaction and to their shared desire to activate cooperation through the Shanghai mechanism. The sides, however, do not intend to cross the line between regional rivalry and an open confrontation with the United States.

Chinese politicians and experts believe that the SCO should help Beijing resolve a strategic task of restoring/preserving Chinas unity. An interest the Peoples Republic of China displayed at all international forums in registering legal formulas related to the painful problems of Taiwan, Tibet, and Eastern Turkestan has developed, within the Shanghai process, into a desire to tie together separatism and extremism/terrorism in clear and rigid terms. In this respect, China can, with good reason claim the honor of devising and wording the Shanghai Convention on the Struggle against Terrorism, Separatism and Extremism.

Other Problems

So far, the SCOs (that is still being formed) real international influence cannot be directly related to its member states considerable total economic, geopolitical, and demographic potential. Significantly, the organization is still suffers from lack of coordination among the members and their different foreign economic and foreign political orientations. In 2000, it was only the share of the Shanghai members (including the trans-border trade) in Kazakhstans foreign trade turnover that reached a sufficiently high figure of 44 percent ($6.3 billion). Still, the Western companies working in the key export-oriented economic branches of Kazakhstan (oil production, in the first place) play a very important role, therefore the share of 44 percent will not add priority, in the mid-term perspective, to the SCO or Chinese integration trends. In future Astana will assess Russias role by its possibilities of oil transit to the West. In 2000 the Shanghai countries contributed 10.7 percent ($14.8 billion) and 2.5 percent ($12 billion), respectively, to foreign trade of Russia and China.

The geopolitical preferences of two Shanghai partners are different: Russia is looking at the West while China is Pacific-oriented. The figures of foreign trade turnover of both countries can serve as illustration. In 2000 Russia increased its trade with Europe and European CIS countries (their share was 72 percent of Russias total trade turnover). The share of Japan, the United States, Taiwan, Korea and the South Asian countries in Chinas foreign trade turnover was about 65 percent. This shows that the SCO will hardly launch large-scale economic integration programs that may boost the organizations influence and prestige.

This should not be taken to mean that Russia and China will not cooperate, on a limited scale, in developing the regions hydropower and energy fuel resourcessuch cooperation would fit both countries varied foreign policies. The specific content of this variety and lack of the necessary resources to support it does not give reasons for optimistic long-term forecasts of the Shanghai cooperation. Russias strategy in Central Asia is in a process of shaping, yet any, and even carefully substantiated plans for the future cannot be realized without necessary material support. This inevitably (in the mid-term perspective at least) weakens Russias positions in the region where new players (the West or China) are entrenching. Russia has to discuss with them the conditions of their coexistence in Central Asia. The very existence of the Shanghai link is another confirmation of Russias preferences.

One doubts that outside the need to oppose separatism in Eastern Turkestan and an unwelcome American presence in the region China looks at Central Asia as a priority. It will be hard to get Chinese money to fund tripartite projects, involving Russia, China, and a Central Asian state. Beijing is fully aware that such projects will strengthen Russian positions rather than promote the still vague Chinese interests. The politically motivated decisions passed by Beijing20 can hardly serve as a firm basis for prolonged cooperation.

In addition, the ever present and unpredictable contradictions among the Central Asian SCO participants (mentioned above) create more difficulties for middle-term economic integration within SCO. They also make it hard for some of the SCO members to join the WTO.21 The latter has already negatively affected coordination within Eurasian Economic Community, of which four out of six SCO countries are members.22

Water is a source of practically inevitable contradictions, even outside the four Central Asian countries. The Chinese plans to develop the Karamai oil fields (XUAR) and the related intention to divert the waters in the upper reaches of the Irtysh and Ili may, in the nearest future, require a discussion of how to coordinate the Chinese, Kazakhstani, and Russian interests. Such plans may cripple the economies of eastern Kazakhstan and of the Russian lands in the Irtysh basin. Not more that 15 percent of the water flow of the Irtysh and over 60 percent of the water flow of the Ili are formed in China, which means that there is a real threat to Kazakhstan (and Lake Balkhash on its territory). Kazakhstan and China have been conducting consultations since August 1999. On many occasions Astana demonstrated its readiness to include a third partner, Russia. Each time China objectedRussias involvement will strengthen the positions of Kazakhstan.

* * *

The evolution of the Shanghai Five ended, quite logically, in a new security and cooperation model for Eurasia. An efficient mechanism of confidence-building measures in the military sphere has been set in place; border-related problems have been settled, though not without difficulties; regular multilateral meetings and consultations led the participants to a relatively high level of foreign political coordination; there are prerequisites for even closer economic cooperation. There is a new model the importance of which is evident against the background of numerous ethnic-territorial and border conflicts and the low confidence level in Asia.

Cooperation in the field of security (fight against international terrorism, religious extremism and national separatism) will remain the main consolidating factor within the SCO for at least the middle-term perspective.

Today, Russia and China are working toward transforming the SCO, as promptly as possible, into a mechanism of a dialog that will make it possible to realize, in the best way possible, certain common Russian and Chinese foreign political tasks within the extending Central Asian geopolitical expanse.

1 The document was signed on 26 April, 1996. Enacted on 7 May, 1998.

2 The document was signed on 24 April, 1997. Enacted on 6 August, 1999.

3 According to the agreements of 1996 and 1997 among five members Russia, Kazakhstan, Kyrgyzstan and Tajikistan formed a single delegation at negotiations with China. The group is made up of representatives of the foreign and defense ministries, and border guard services of the five countries.

4 Both armed forces and border troops are targets of such inspections.

5 The Bishkek Group held its regular meeting on 17-21 December, 2001 to discuss a mutually acceptable draft of an Agreement on Regional Antiterrorist Structure within SCO.

6 Beijings unwillingness to use the term had political and linguistic reasons: for some time China doubted the need to promptly institutionalize the Shanghai Five; on the other hand, when translated into Chinese the term forum acquired an undesirable implication of a talking shop.

7 The decision adopted in November 2000 by the leaders of Kazakhstan and Kyrgyzstan on studying a possibility of setting up along their borders a zone of military transparency and confidence according to the pattern already functioning within the SCO was an eloquent event.

8 According to Kyrgyz experts China received from their country 1,242 sq km (33 percent of the territories Beijing described as contestable) as a result of bilateral agreements of 1996 and 1999.

9 At the same time, the problems related to two stretches of the Russian-Chinese border (less than 2 percent of its total length) remain unsettled: the area around the Bolshoi island in the upper reaches of the River Argun and the Amul islands near Khabarovsk. The sides agreed on status quo (that is, Russian jurisdiction) for the entire period of talks.

10 The Republic of Uzbekistan was the treaty member from 20 April, 1994 to 20 April, 1999. It refused to sign the Protocol of 2 April, 1999 on prolongation of the Collective Security Treaty and, on the strength of this, withdrew from the treaty.

11 It was in his plane on the way back to Tashkent that President Karimov said: This organization should not develop into a military-political bloc or an alliance. It should not make aggressive steps against third states and act against them... If the SCO behaves like this Uzbekistan will never side with such policy and will never support it. This interview in the Uzbek language was broadcast by the first TV channel of Uzbekistan on 17 June, 2001. It should be noted that the SCO has never nurtured any plans of developing into a military-political bloc and there were neither threats nor aggressive actions against third countries.

12 The Declaration on setting up the Shanghai Cooperation Organization and the Shanghai Convention on the Struggle against Terrorism, Separatism and Extremism.

13 An invitation of the Mongolian president to attend the June summit has been already discussed in a preliminary way.

14 Pakistan officially asked for the Shanghai Five membership in January 2001.

15 It should be noted that the vague outlines and dim CICA prospects caused many questions among other participants in the process.

16 The leaders of Kazakhstan plan to turn the SCO into a core of a sort and a catalyst of the CICA process that, in its turn, will push the SCO forward.

17 The Central Asian Russian community is strong enough: in 2001 it comprised 6.5 million, or 11.7 percent of the regions total population. In 1989 there were 9.5 million Russians, or 19.3 percent. Together with other Russia-oriented ethnic communities (Tartars, Bashkirs, Germans, Jews, Ukrainians and partly autochthonous but not dominating ethnic groups) the local Russians are the natural ethno-political ally of Russia and a relatively efficient channel of Russian influence.

18 The subject of mutually advantageous labor migration has been discussed within the Shanghai Five and SCO. The steadily growing migration of the Chinese surplus manpower and spontaneous migration from China to Siberia and the Russian Far East have become a subject of bilateral talks between Russia and China.

19 Any assessment of this threat in the middle- and, especially, long-term perspective required special and detailed consideration.

20 The unprecedented Agreement on the Principles of Cooperation in Constructing the West-East (Tarim-Shanghai) Gas Pipeline is one of the examples of such decisions. Gazprom and Royal Dutch Shell get 45 percent of shares. In addition, the circle of participants in the United Trade Company that is being set up to create in China natural gas market will be limited to the investors of the West-East project, namely, Gazprom, Royal Dutch Shell and Petrochina.

21 Kyrgyzstan joined WTO in January 1999, China, in December 2001. Russia is expected to join the WTO not earlier than 2003 or 2004. It is hard to say when Kazakhstan will join the World Trade Organization. It is harder still to predict when Uzbekistan and Tajikistan will be admitted.

22 See: M. Barbasov, Integration of the Eurasian Economic Community States into the WTO, Central Asia and the Caucasus, No. 2 (8), 2001.

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