China Hosts Summit to Rival Us

China ramped up its role as a global player on Thursday by hosting a summit of states encompassing almost half the world's population and some of Washington's most prominent opponents.

The Chinese president, Hu Jintao, said the Shanghai Cooperation Organisation - which brought together the leaders of 10 nations in and around central Asia - is designed to promote peace and stability in a region that has become an increasingly important source of oil and gas.

But the group's potential role as a counterweight to the US was underlined by the presence of the Iranian president, Mahmoud Ahmadinejad, who received a warm welcome in Shanghai despite his country's standoff with international nuclear inspectors over Tehran's uranium enrichment program.

Mr Ahmadinejad said his country's participation could "turn the SCO into a strong, influential economic, political and trading institution at both regional and international levels and prevent the threats of domineering powers and their aggressive interference in global affairs".

The growing power of China has prompted a rethink in Washington, where rightwing analysts now speak of the SCO as an embryonic rival to Nato. Their fears have been strengthened in the past two years by the inclusion in the SCO of Iran, Pakistan, India, Mongolia and Afghanistan as either observer or guest nations.

But it is in the field of energy that the SCO appears to be most powerful. The countries gathered in Shanghai control almost a quarter of the world's oil supplies and are building a series of pipelines across the region. A pipeline is being planned from Iran to China that would cross Pakistan, whose president, Pervez Musharraf, yesterday requested to be admitted as a full member of the SCO.

Mr Ahmadinejad called for a meeting of SCO energy ministers to discuss closer cooperation in exploration, development and shipping. "The SCO groups both energy-producing nations and energy-consuming ones," he said. "Energy has been playing an increasing rule in national development and progress."

His comments are likely to rankle in Washington. Last week the US defence secretary, Donald Rumsfeld, criticised China and Russia for backing Iran's participation in the summit, saying he found it strange to bring the "leading terrorist nation in the world into an organisation that says it's against terror".

Participants dismissed fears that the SCO was a rival to the US. "Our actions are not aimed at the interests of other countries and do not signal the formation of another bloc," the president of Uzbekistan, Islam Karimov, said.

Chinese officials describe this week's summit as their most important diplomatic event of the year. An unprecedented security operation has shut down a large part of the usually bustling Pudong district near the conference centre and millions of the city's residents have been given a special three-day holiday. Such is the attention to detail that windows on part of the leaders' route have been screwed shut and police have instructed locals not to leave flower pots on balcony ledges in case they fall.

The SCO - one of the world's youngest international groupings - began life 10 years ago as a forum for settling border disputes between its core members: China, Russia and four Central Asian states - Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

Although its activities have expanded to cover anti-terrorism exercises, energy cooperation and banking in the five years since it became a formal institution in 2001, most western commentators have dismissed the SCO as a dictators' club that is long on style and short on substance.

On Thursday the leaders signed a joint statement on information security, economic cooperation and cross-border military exercises. "It remains the top priority of the organisation to combat the threats posed by terrorism, separatism and extremism as well as drug trafficking, which have not diminished but aggravated in scale and degree," the statement noted. Human Rights Watch say the member countries use this as a pretext to crack down on legitimate and peaceful protests.