The SCO's economic bet: Can Eurasia turn trade into shared growth?

For much of its history, the Shanghai Cooperation Organisation (SCO) has been defined by security. But 25 years after its founding, its economic agenda is becoming harder to treat as secondary.

In 2025, China's trade with other SCO member states reached $523.5 billion, up from $12.1 billion in 2001, according to China's Ministry of Commerce. The figure accounted for about 8% of China's total foreign trade. Chinese direct investment in other SCO members reached $3.3 billion, with more than 30 economic and trade cooperation zones built in SCO countries.

The numbers are substantial. But they do not, by themselves, amount to regional integration.

The bigger question is whether the SCO can turn growing trade and investment into a regional economic network that creates productive capacity, not just commerce.

From trade to production

The relationship is already moving in that direction.

China's trade with SCO partners spans energy and agricultural products as well as electric vehicles, lithium-ion batteries, photovoltaic products and cross-border e-commerce. The country's investment covers energy, minerals, infrastructure, new energy, automobiles and chemicals, according to China's Ministry of Commerce.

The significance lies less in the headline investment figure than in its potential spillovers: Factories can create local suppliers and jobs, while industrial parks can connect domestic producers with wider markets.

But much of the SCO's practical economic cooperation is still driven by individual countries and bilateral projects, even as the organisation has developed multilateral mechanisms covering trade, investment, finance, transport, energy, manufacturing and standardisation.

That reflects the diversity of the group.

China brings manufacturing capacity and a huge consumer market. Russia is a major energy exporter. Central Asian economies are seeking investment, infrastructure and diversified routes to market. India has stressed export diversification, resilient supply chains and an open WTO-centred trading system.

These interests overlap. They do not always coincide.

Complementarity creates opportunity. It does not automatically create consensus.

Connectivity needs to deliver more

For Eurasia, economic integration ultimately depends on whether goods, energy and capital can move more efficiently across borders.

The China-Kyrgyzstan-Uzbekistan railway is one example of the efforts to expand transport links across Central Asia. The wider logistics network is growing too. China's Ministry of Commerce said the China-Europe Railway Express operated 13,000 trains in the first seven months of 2026, up 17.6% year on year.

But a railway can shorten a journey without eliminating customs procedures, differing standards or regulatory barriers.

That is why the SCO's institutional work matters.

In 2025, the organisation established its first standardisation cooperation mechanism, providing an institutional framework for cooperation among member states. The initiative covers areas including artificial intelligence and the low-altitude economy and is intended to facilitate standards alignment.

The SCO is also working on customs cooperation. In July 2025, its customs working group discussed electronic certification of the origin of goods and the use of "Single Window" systems.

For businesses, these are not technical details. Different standards and customs procedures can add costs even when physical infrastructure is already in place.

If infrastructure is the hardware of regional integration, rules are its software.

Finance is the harder test

Finance may expose the SCO's institutional limits more clearly.

At the 2025 Tianjin summit, interested SCO member states decided to establish an SCO Development Bank and intensify consultations on its functioning. But the bank is not yet operational.

In June 2026, representatives of member and observer states and the SCO Secretariat held a fourth round of consultations in Shenzhen, discussing the bank's key elements and next steps.

That matters because a regional development bank requires more than political agreement. Governments ultimately have to settle how the institution will operate, how it will be financed and how risks will be managed.

The same tension runs through the wider economic agenda: Political consensus can open the door, but institutions determine whether projects can pass through it.

A different model of integration

The SCO is unlikely to follow the European Union's path.

The EU built a single market supported by deep supranational institutions. The Eurasian Economic Union has pursued customs-union and common-market integration among a smaller group of members.

The SCO has chosen a looser model, built around cooperation across multiple sectors while preserving national economic priorities. Its economic architecture now includes formal mechanisms for trade, investment, finance, transport, energy, manufacturing and standardisation.

That flexibility is both a strength and a constraint.

Member states can cooperate where interests overlap without agreeing on everything. But progress can also remain uneven: Bilateral investment may deepen while bloc-wide rules move more slowly.

The question is therefore not whether the SCO can become another EU. It is whether its flexible model can produce enough practical results to matter at regional scale.

What does "shared growth" mean? A bigger trade number is not necessarily shared growth.

For Central Asian economies, deeper SCO ties can mean new export routes, investment and industrial opportunities. For China, they can provide more diversified markets and supply chains. For Russia, they can create additional channels for trade and investment.

But these interests can also produce asymmetries.

The real measure of success should therefore be more demanding than trade turnover.

Are local industries becoming more competitive? Are new suppliers being created? Are infrastructure projects generating jobs and investment? Are technology and skills reaching host economies?

In other words, the question is not simply how much trade crosses borders, but what productive capacity remains after it does.

The harder part starts now

The SCO has built a substantial economic base. The challenge is to make it work better.

Trade facilitation requires regulatory coordination. Standardisation requires greater alignment. Cross-border infrastructure needs commercially viable cargo and reliable financing. A development bank requires agreement on its operating framework and financial arrangements.

None of this makes deeper cooperation impossible. But it makes the economics more complicated than the headline trade figures suggest.

The SCO does not need to become a single market to become economically significant. Its more plausible path is to build a network of complementary economies — linking resources with manufacturing, infrastructure with markets, and investment with local development.

Its economic success should ultimately be judged by a simple measure: Whether cooperation makes its members more productive, more connected and more resilient — together.

That is the real economic bet.