Chinese President Xi Jinping announced on Monday the creation of a Shanghai Cooperation Organization (SCO) Development Bank during the bloc’s summit in Tianjin, China, calling on member states to accelerate its establishment. The proposed bank aims to enhance regional economic cooperation and provide an alternative to Western-led financial institutions, signaling another step toward a multipolar global order.
The concept of an SCO Development Bank has been under discussion for over a decade, with China being its primary advocate since at least 2010. The bank is envisioned as a multilateral financial institution that would finance infrastructure, trade, and development projects across the SCO’s member states, which currently include China, Russia, India, Pakistan, Iran, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and Belarus.
According to summit discussions, the bank will focus on strengthening economic integration among member nations, increasing the SCO’s global influence, and providing a counterbalance to Western-dominated entities such as the World Bank and the Asian Development Bank. Recent geopolitical tensions, including sanctions imposed on Russia and Iran, have reinforced calls within the bloc for financial mechanisms less susceptible to Western pressure.
The SCO Development Bank is expected to fund major infrastructure initiatives, energy development, trade facilitation, and sustainable development projects. Collectively, SCO member states represent a significant share of the world’s population and GDP, giving the bank substantial potential to reshape financial dynamics across Eurasia.
The institution will reportedly follow a model similar to that of the BRICS New Development Bank (NDB). With several nations holding dual memberships or partnerships in both the SCO and BRICS, analysts view the initiative as part of a broader effort to coordinate between the two blocs. This growing cooperation is increasingly seen as an attempt by the Global South to shield itself from Western sanctions, monetary policies, and financial leverage along with possible attempts at color revolutions.