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RR RUEHCN RUEHDE RUEHGH
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INFO RUEHBJ/AMEMBASSY BEIJING 1945
RUEHCN/AMCONSUL CHENGDU 1278
RUEHGZ/AMCONSUL GUANGZHOU 1249
RUEHSH/AMCONSUL SHENYANG 1276
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RUEHMO/AMEMBASSY MOSCOW 0023
RUEHDBU/AMEMBASSY DUSHANBE 0008
RUEHTA/AMEMBASSY ASTANA 0003
RUEHNT/AMEMBASSY TASHKENT 0008
RUEHEK/AMEMBASSY BISHKEK 0008
RUEHIL/AMEMBASSY ISLAMABAD 0016
RUEHBS/USEU BRUSSELS 0005
RUEHNO/USMISSION USNATO 0001
RUEHGH/AMCONSUL SHANGHAI 7522

C O N F I D E N T I A L SECTION 01 OF 04 SHANGHAI 000253 
 
SIPDIS 
 
NSC FOR WILDER, TONG 
DEPT FOR EAP/CM 
 
E.O. 12958: DECL:  7/1/2033 
TAGS: PREL ENRG CH RS XD XE IR
SUBJECT: SHANGHAI SCHOLARS' VIEWS ON THE SHANGHAI COOPERATION 
ORGANIZATION (SCO) 
 
REF: 07 SHANGHAI 790 
 
CLASSIFIED BY: Christopher Beede, Political and Economic Section 
Chief, U.S. Consulate General, Shanghai, Department of State. 
 
REASON: 1.4 (b), (d) 
 
 
 
¶1.  (C) Summary:  Shanghai scholars described Shanghai 
Cooperation Organization (SCO) member states as committed to 
cooperation on issues of common interest, but divided over any 
larger role the organization should play over the long term. 
The August 2008 summit will not break new ground but will focus 
on implementation of existing agreements.  Full SCO membership 
for interested observer states, including Iran, is unlikely to 
materialize in the short term, due to the SCO's consensus 
decision-making, disagreement over the merits of admitting new 
members, and lack of a fixed mechanism for doing so.  The 
Shanghai scholars detect a divergence in views between Beijing 
and Moscow regarding the SCO's long-term trajectory, but differ 
on its significance.  They are similarly positive on the idea of 
greater U.S. involvement in Central Asia but divided on 
potential U.S. engagement strategies.  END SUMMARY. 
 
¶2.  (C) In advance of the 2008 Shanghai Cooperation Organization 
(SCO) summit, Poloff conducted separate meetings June 25-27 with 
local experts on the SCO and Central Asian affairs.  The experts 
included: Shao Yuqun, Deputy Director of the Department of South 
Asia Studies, Shanghai Institute for International Studies 
(SIIS); Pan Guang, Director of the Center of Shanghai 
Cooperation Organization Studies, Shanghai Academy of Social 
Sciences (SASS); and Zhao Huasheng, Director of the Center for 
Shanghai Cooperation Organization Studies, Fudan University. 
The summit, to be held in Dushanbe, Tajikistan, is tentatively 
scheduled for mid-August, though the dates have not been made 
public. 
 
------------- 
AUGUST SUMMIT 
------------- 
 
¶3.  (C) The scholars concur that the August summit will focus on 
the implementation of existing agreements but break little new 
ground.  Zhao Huasheng remarked that there are 127 outstanding 
SCO agreements, covering a range of joint economic, cultural, 
and energy activities, on which member states are agreed in 
principle but have yet to take any concrete action.  Pointing 
out that decisions are traditionally made by consensus, Pan 
Guang argued that even implementation might be difficult, and 
predicted there will be "lots of discussion but little 
accomplished."  Still, China does have its priorities among 
these agreements, noted Shao Yuqun.  Beijing would most like to 
see its SCO counterparts focus on regional infrastructure 
projects and fighting Central Asian government corruption, both 
of which would benefit Chinese business.  For their part, 
Central Asian member states will seek to deepen their economic 
cooperation with Beijing, a result of their growing knowledge of 
the Chinese market.  In the past, ethnic Uighur contacts in 
Xinjiang would act as middlemen for Central Asian traders 
seeking to obtain Chinese goods.  However, traders are 
increasingly traveling east to such places as Yiwu in Zhejiang 
Province, cognizant of better deals and a wider selection of 
products. 
 
¶4.  (C) The scholars noted that Russia is likely to raise energy 
issues at the summit, but expressed mixed views on how China is 
likely to react.  Shao argued that Beijing is uncomfortable with 
using the SCO as a vehicle for energy diplomacy because Moscow 
takes a more confrontational approach to energy.  Russia has 
vague ambitions for turning the SCO into a natural gas cartel, 
Shao asserted, and has demonstrated its unreliability by 
dragging its feet in implementing its bilateral energy 
 
SHANGHAI 00000253  002 OF 004 
 
 
agreements with China.  In contrast, the Central Asian states 
are simply more pragmatic, concentrating on securing energy 
buyers and diversifying their portfolio of consumers.  China 
prefers bilateral engagement on energy issues, or at least 
venues where Russia cannot interfere, said Shao.  While Pan 
confirmed that China indeed prefers to conduct its energy 
diplomacy on a bilateral basis because "it's just easier that 
way," he believes Beijing is more open to the possibility of 
cooperating with Moscow on energy.  China would happily import 
natural gas from Russia through an existing pipeline running 
from China to Kazakhstan, Pan stated, a money-saving move that, 
in fact, Russia has already agreed to. 
 
-------------------- 
NEW MEMBERS UNLIKELY 
-------------------- 
 
¶5.  (C) The scholars generally agree that full SCO membership 
for interested observer states is unlikely to materialize in the 
short term.  All decisions regarding new members would require 
consensus among SCO states, noted Pan, which would be difficult 
to achieve.  Both Shao and Zhao pointed out that China fears 
enlargement will dilute the SCO's regional focus and cohesion, 
and possibly render the organization's activities less 
effective.  Moreover, since there is no established mechanism 
for offering SCO membership to interested states, it is not 
exactly clear how candidates would be evaluated and approved. 
 
¶6.  (C) Beyond general concerns about the process of admitting 
new SCO members, member states also disagree on the merits of 
specific candidacies.  Shao was particularly skeptical about 
Iran's bid, announced in March 2008, claiming that Beijing and 
others have serious questions about Tehran's foreign policy. 
Pan similarly asserted that "everyone knows Iran just wants to 
use the SCO" to enhance its prestige and further an aggressive 
policy agenda.  Shao commented that some Chinese academics have 
expressed the view that only states bordering current SCO member 
states should be considered for full membership.  Noting that, 
among interested states, only Iran does not border a current SCO 
member state, Poloff pressed Shao as to whether Beijing was 
preparing this argument to defuse Tehran's membership bid.  Shao 
demurred, stating that this is simply one view in circulation. 
 
¶7.  (C) On South Asia, the SCO faces another conundrum, Shao 
argued.  Pakistan has expressed its desire to be considered for 
full membership, but if Pakistan is admitted, then India cannot 
very well be denied.  However, Beijing is concerned about the 
U.S. response should New Delhi join, and is reluctant to bring 
Pakistan and India, with all of their bilateral baggage, into 
the SCO fold.  Were any state to quickly gain SCO membership, 
Shao guessed, it would be Mongolia, the least controversial of 
observer states that can still make a good case for joining a 
Central Asian forum.  Pan disagreed, arguing that, for the time 
being, Mongolia is satisfied with its observer status, and in 
fact no new members should be expected soon. 
 
--------------------------------- 
AGAINST THE WEST, OR JUST UNREST? 
--------------------------------- 
 
¶8.  (C) The scholars detect a divergence in views between Moscow 
and Beijing regarding the SCO's long-term trajectory, but differ 
on its significance.  Besides its energy agenda, Shao believes 
Russia would like to push the SCO in the direction of becoming a 
NATO counterweight, whereas Beijing sees the forum as a neutral 
grouping that reinforces regional stability.  Russia is already 
more willing to view the SCO in its present state as balancing 
the West.  However, China is uncomfortable with this approach, 
as are some Central Asian states, notably Kyrgyzstan and 
Tajikistan, who are speaking out on their position.  Shao 
commented that in some previous SCO meetings, Tajikistan 
responded to anti-NATO statements made by the Russian side with 
 
SHANGHAI 00000253  003 OF 004 
 
 
praise for NATO's role in securing the Afghan border and help 
with building Tajik infrastructure, especially its 
communications network and electrical power grid. 
 
¶9.  (C) While acknowledging these differences, Pan and Zhao hold 
that the cooperative aspect of the Beijing-Moscow relationship 
is the more remarkable development.  Moreover, Pan observed that 
the United States and NATO are already cooperating with SCO 
member states.  In 2002, the United States worked with a 
provisional grouping of Afghanistan's six neighbor states to 
discuss reconstruction efforts and regional stability. 
Additionally, Russia and Uzbekistan recently reached agreement 
with NATO to permit supplies intended for Afghanistan to be 
shipped across their borders, an issue that may receive mention 
at the SCO summit.  Of course, Pan noted, Russian acquiescence 
to this latter scheme was probably designed to give Moscow a 
trump card for preventing NATO from extending membership to 
former Soviet states such as Georgia.  Nevertheless, these 
examples disprove the theory that SCO states somehow cannot work 
with NATO, Pan stated. 
 
¶10.  (C) The scholars strongly disagree with the view, espoused 
by some Western observers, that the SCO is largely a vehicle for 
Russian and Chinese geostrategic ambitions.  Recalling the 2005 
SCO summit declaration, which called on the United States to 
establish a timeline for closing its military bases in member 
states, Shao accused Russia of being its primary instigator. 
China tried to put the brakes on this initiative, Shao claimed, 
but ultimately signed on to preserve consensus and prevent the 
SCO from appearing weak and divided.  Pan offered a similar 
interpretation of the 2005 events, and, more generally, warned 
the United States against regarding Russian or Uzbek comments on 
the SCO as representative of all SCO member states.  "Russia 
always has big plans for the SCO," Pan laughed, for which, if 
pursued, Russia would not really be able to obtain consensus. 
 
------------------------------ 
POTENTIAL FOR U.S. COOPERATION 
------------------------------ 
 
¶11.  (C) Asked whether the SCO would ever consider working on 
some level with the United States, the scholars were positive on 
the idea of greater U.S. involvement in Central Asia but divided 
on potential U.S. engagement strategies.  Zhao suggested that 
the United States and SCO member states have many common 
interests in the region, specifically fighting terrorist groups 
like Al Qaeda and the Taliban, putting an end to 
drug-trafficking, and ensuring that Afghanistan -- presently 
"the most unstable factor in the region" -- is put on a more 
stable footing.  Washington needs to play a more active role in 
Afghanistan but avoid fueling increased terror in the region; 
coordination with the SCO would be one way to maximize the 
former and mitigate the latter, Zhao asserted. 
 
¶12.  (C) Were the United States to formally seek SCO observer 
status, Shao speculated, Russia and probably Uzbekistan would 
prevent a favorable outcome.  Still, some Central Asian states, 
and possibly even China, would welcome SCO cooperation with 
Washington on at least 
 
some level.  It would be important that U.S. engagement with the 
SCO emerge organically from discussion with member states, Shao 
stressed, so the best strategy might start with informal Track 
II discussions with member states, ideally without direct 
reference to their SCO affiliation.  Pan, meanwhile, argued that 
regional cooperation with the United States, EU, and even NATO 
might be more acceptable -- and thus more easily achievable -- 
using the "six Afghan neighbors" grouping rather than the SCO. 
 
------- 
COMMENT 
------- 
 
SHANGHAI 00000253  004 OF 004 
 
 
 
¶13.  (C) While Chinese suspicions of the West may not approach 
those harbored by Moscow in degree, Pan and Shao's assertions 
that Beijing does not view the SCO as a bulwark against U.S. 
influence in Central Asia are not entirely credible.  Zhao, for 
instance, peppered an otherwise upbeat presentation on the SCO 
with pointed remarks about the color revolutions and the U.S. 
military presence in Kyrgyzstan.  Though not insurmountable, 
Chinese and Russian differences over energy and the SCO's 
future, if unresolved, may prove a drag on future cooperation 
and hamper the organization's evolution. 
JARRETT