MNI INTERVIEW: China To Advocate For SCO Free Trade Zone

China will continue pressing for a free trade area within the Shanghai Cooperation Organisation (SCO), despite last week’s leaders’ declaration in Tianjin omitting the initiative, a senior Chinese official told MNI.

Fan Xianrong, a diplomat responsible for SCO relations, said the bloc’s largely contiguous geography made deeper economic integration feasible and that Beijing would step up efforts to advance trade cooperation. "Establishing a free trade area is still the bloc’s long-term direction," Fan said on the sidelines of a media seminar in Beijing. 

“We are advancing the implementation of ‘single window’ customs clearance between SCO countries, allowing for unified inspections of shipments, which will streamline procedures, facilitate trade, and boost volumes." 

China’s trade with SCO members reached USD512 billion in 2024, an increase of 2.7% y/y, according to official data.

Fan hailed last week’s agreement to create an SCO development bank, which Beijing had long advocated, as a “great breakthrough” that would accelerate economic integration and infrastructure investment. Unlike other multilateral development lenders, the bank will operate under the SCO framework and focus financing on member states.

China also aimed to expand local currency settlement across the bloc, he added. “Faced with unilateralism and illegal sanctions, the SCO must pursue stronger trade relations, including greater reliance on local currencies,” he said. (See: MNI: Fixing Price Guides Yuan Rally, Pressure)

Asked about U.S. President Donald Trump’s response to the summit, which included a comment on Truth Social that Washington had “lost” Russia and India to China, Fan rejected the idea the SCO was anti-U.S. or anti-western, stressing the group’s focus on common security and global prosperity.

EXPANSION 

Brazil’s potential entry, under consideration by Brasília, would support SCO development, though the outcome hinged on political decisions in the country, Fan added.

The SCO has expanded from six to 10 members in recent years, with Fan noting enlargement remained a defining trend. The organisation had become like a snowball, he remarked, “rolling bigger and bigger.”