Abstract
The Shanghai Cooperation Organization (SCO) started as a security and counter terrorism organization. Later it changed to a multi-function regional organization that also covers economic cooperation and active diplomatic interaction. The SCO has become the cornerstone of China’s Central Asian diplomacy and its promotion of “non-alliance” forms of strategic cooperation Russia also attaches importance to the SCO. However, despite the SCO’s endeavors to portray itself as a forum for information sharing and confidence building, as well as political and economic cooperation, hard power considerations remain an important part of the organizations policy making. Moreover, with some American forces remaining in Afghanistan for the foreseeable future and the challenge of terrorism and instability. The SCO will play important role in countering terrorism, promoting socio-economic cooperation and ensuring stability in the region.