SCO Summit 2025: Key Takeaways

China Led SCO Summit Pushes Alternatives to West

The SCO (Shanghai Cooperation Organization) consists of 10 member countries of which China and Russia are the two most important.  In addition, central Asian states such as Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan are part of the SCO.  Other key countries include India, Pakistan and Iran plus the Russian client state of Belarus. Observer states include Mongolia and Afghanistan with ten (10) dialogue partners such as Turkey, Egypt, Qatar, Saudi Arabia, UAE, Bahrain, Myanmar, Sri Lanka and others.

There are limits to the common goals for the group.  Both China and Russia are competing for influence in central Asia and have other geopolitical reasons to not get too close. For example, China is not happy with Russia’s war in Ukraine and they have never recognized the Crimean Annexation.  However, China is an enable of Putin in the Ukraine War. India and Pakistan almost went to nuclear war a few months ago. India was scheduled to go the SCO Summit before the Trump tariffs and both India and China have been discussing closer economic ties for more than a year mainly to domestic issues in their own countries.

The Shanghai Cooperation Organization Summit in Tianjin showcased Beijing’s push to reshape global security and economic governance amid U.S. tariffs and geopolitical tensions. Leaders from 20 countries highlighted thawing India–China ties, a visible China–India–Russia troika, commitments on AI cooperation, and steps toward an SCO development bank — signaling efforts to build alternatives to Western-led institutions.

But deep differences among members (on Ukraine, Israel–Gaza, terrorism, India–Pakistan rivalry) and the SCO’s consensus-driven structure mean symbolism and optics may outweigh concrete policy convergence.

Summit details: Tianjin, Aug 31–Sep 1; about 20 foreign leaders and 10 international organizations expected; followed by a major WWII commemoration parade on Sept 3. 

Attendance significance: Modi’s visit (first to China since 2018) reflects India’s recalibrations amid U.S. trade pressure; other high-profile attendees include Putin, Lukashenko, Erdogan, and leaders from Iran, Pakistan, Central and Southeast Asia.

China’s goal: project the SCO as a stabilizing, multilateral platform and highlight Beijing’s global ties and leadership amid perceived Western retrenchment. But deep differences among members (on Ukraine, Israel–Gaza, terrorism, India–Pakistan rivalry) and the SCO’s consensus-driven structure mean symbolism and optics may outweigh concrete policy convergence.

Limits to unity: SCO members deep differences among members (on Ukraine, Israel–Gaza, terrorism, India–Pakistan rivalry) and the SCO’s consensus-driven structure mean symbolism and optics may outweigh concrete policy convergence.

Key points

• China framed the summit as a move against “Cold War mentality” and pushed for a more balanced international governance framework.
• India and China signaled a diplomatic thaw: Modi and Xi met on Chinese soil for the first time in seven years and pledged cooperation on border disputes and trade, though mistrust and trade protections remain.
• A symbolic troika of Xi, Modi and Putin underscored China and Russia’s continuing influence and India’s strategic flexibility amid U.S. pressure.
• SCO members committed to an AI cooperation roadmap emphasizing shared development, security and open-source models, and discussed creating a joint AI collaboration center.
• Talks advanced creating an SCO development bank and China pledged substantial aid and loans to members, reflecting efforts to build financial alternatives to U.S.-dominated systems.
• Summit details: Tianjin, Aug 31–Sep 1; about 20 foreign leaders and 10 international organisations expected; followed by a major WWII commemoration parade on Sept 3.
• China’s goal: project the SCO as a stabilising, multilateral platform and highlight Beijing’s global ties and leadership amid perceived Western retrenchment.
• Attendance significance: Modi’s visit (first to China since 2018) reflects India’s recalibrations amid U.S. trade pressure; other high-profile attendees include Putin, Lukashenko, Erdogan, and leaders from Iran, Pakistan, Central and Southeast Asia.
• Limits to unity: SCO members split on key geopolitical issues (Ukraine, Israel–Gaza, Iran, cross-border terrorism); consensus decision-making often prevents joint positions.
• Geopolitical context: Summit occurs amid rising multipolar rhetoric, U.S.–led alliances (e.g., Quad), and close U.S. scrutiny of India–China interactions and broader Global South alignments.

Economic and Strategic Implications

• Deepening economic ties within the SCO could lessen member states’ dependence on Western capital and institutions. China’s financial pledges and the proposed development bank are intended to fund infrastructure, energy and connectivity projects that align with Beijing’s Belt and Road agenda while offering a more politically palatable alternative for nations wary of Western conditionality.
• Greater cooperation on technology, especially AI, raises both opportunities and risks. On one hand, shared research, data pools and joint standards could accelerate development and create interoperable systems across Eurasia. On the other, closer tech alignment among SCO members may facilitate surveillance technologies, export controls that fragment global supply chains, and the propagation of norms that diverge from Western approaches to privacy, civil liberties and interoperability.
• For India, balancing participation in SCO initiatives with its strategic ties to the West — including defense and technology partnerships — will require careful calibration. New economic avenues could alleviate some trade frictions with China, but New Delhi will want safeguards to protect sensitive sectors and to avoid overreliance on Beijing-led financing.
• For Russia, the summit offered political validation and economic opportunities amid Western sanctions. Deepening ties with China and other SCO members helps Moscow circumvent financial isolation and diversify its economic partners, though Russia still faces limits on technology transfer and investment that Western markets once provided.

Potential challenges ahead

• Governance and institutional capacity: Creating a functioning SCO development bank and a joint AI center will demand clear governance rules, transparency mechanisms and conflict-resolution processes. Member states have diverse priorities and different levels of fiscal capacity, which could complicate decision-making and project implementation.
• Trust deficits and bilateral disputes: Despite diplomatic outreach, entrenched bilateral tensions — notably territorial disputes between China and some neighbors, and between India and Pakistan — could impede collective projects or limit the scope of cooperation in sensitive sectors like defense and dual-use technologies.
• External pushback and alignment pressures: The U.S. and its allies may respond by tightening technology controls, expanding economic incentives for partners to remain aligned with Western systems, or increasing diplomatic engagement in Central and South Asia. Such moves could create competing blocs or force member states to make difficult strategic choices.
• Financial risks: Large-scale lending and investment without robust safeguards could lead to debt vulnerabilities for smaller economies. Ensuring project viability and avoiding unsustainable debt burdens will be critical if the SCO’s financial initiatives are to gain credibility.

Bottom line: The Tianjin SCO summit signaled a concerted push by Beijing, with influential partners, to build regional alternatives in finance, technology and security governance. While declarations of cooperation are significant, the true test will be translating commitments into institutions and projects that deliver sustainable economic benefits without deepening geopolitical cleavages. How member states manage competing external pressures, internal trust deficits and the technical governance of complex technologies like AI will determine whether the SCO can become a durable pillar of a more multipolar world.

Potential Gas Pipeline Deal – Russia and China Implications

According to a recent Bloomberg Report, Russia and China appear to have reached a major energy agreement: Gazprom says it signed a legally binding deal to build the Power of Siberia 2 pipeline through Mongolia to supply China, potentially delivering up to 50 billion cubic meters per year for 30 years. The announcement came during a warm Putin–Xi meeting in Beijing and would deepen Moscow–Beijing ties, help Russia pivot its gas exports east as European markets shrink, and reshape parts of the global gas trade — though many commercial details remain unconfirmed by China.

Key points

• Gazprom CEO Alexey Miller reported a binding agreement to build Power of Siberia 2 to China via Mongolia, with possible capacity ~50 bcm/year for 30 years.
• China has not officially confirmed pipeline details; state media noted multiple cooperation deals but did not specifically name the pipeline.
• Important commercial terms (price, flexibility of volumes, financing, construction timeline, start of deliveries) remain unclear.
• The deal would boost Russia’s eastbound gas exports, compensating for lost European markets amid Western sanctions and potential EU bans on Russian gas.
• The announcement coincided with a high-profile Putin–Xi meeting that highlighted rapidly warming China–Russia relations and growing bilateral trade.

Implications for markets and geopolitics

• European energy markets: If implemented, Power of Siberia 2 would further reduce Russia’s ability to use its gas exports to Europe as leverage. Europe would face a longer-term structural shift as Russian supply flows are redirected eastward. However, given existing liquefied natural gas (LNG) capacity growth and infrastructure investments in Europe and elsewhere, the practical impact on European gas prices will depend on how quickly and fully Moscow can reorient volumes to Asia.
• Asian energy landscape: For China and other Asian buyers, an additional large, long-term pipeline source would diversify supplies and potentially moderate prices compared with spot LNG markets—assuming contract price formulas and supply reliability are favorable. It would also deepen China’s dependence on a single large supplier, with attendant strategic considerations.
• Financing and construction risks: Building a cross-border pipeline on the scale of Power of Siberia 2 would require massive capital outlays and complex project finance arrangements. Western banks may be reluctant to participate because of sanctions risk, pushing financing toward Russian state funds, Chinese banks, or alternative structures. Construction through Mongolia raises engineering and political risks, particularly if domestic Mongolian politics shift or contractors face sanctions.
• Energy diplomacy: The deal, real or announced, signals closer energy alignment between Moscow and Beijing. For Russia, greater integration with Chinese demand provides insurance against Western economic pressure. For China, securing long-term, pipeline-delivered gas supports energy security and the transition away from coal. The move may prompt third countries to reassess their diplomatic and security postures in Eurasia.

Bottom line: Gazprom’s announcement represents a potentially significant step in Russia’s eastward pivot in gas exports and a deepening of Sino‑Russian energy ties. Yet without clear details from China and further commercial disclosures, the declaration should be treated cautiously: it is strategically meaningful but commercially incomplete. Markets, policymakers, and regional players will watch for Beijing’s response, financing arrangements, and concrete implementation milestones to judge whether Power of Siberia 2 becomes a transformative reality or a diplomatic headline with limited immediate effect.