BEIJING - A free trade area should be set up to facilitate regional economic cooperation between members of the Shanghai Cooperation Organization (SCO), a senior Chinese official said Thursday.

Vice Commerce Minister Qian Keming made the proposal at an SCO economic forum.

He also called for the establishment of an SCO development bank, which would provide funding for regional projects together with other multilateral funds and development banks, to be expedited.

Most SCO members are also members of the World Trade Organization (WTO) and should actively implement the WTO's Trade Facilitation Agreement to cut trade costs by 10-15 percent and remove restrictions in service trade, Qian told the forum.

He called for better coordination and more policy transparency in cross-border investment, noting that protectionism must be avoided.

Investment in infrastructure, industrial cooperation, agriculture and high-tech areas should be expanded between SCO members, Qian said.

The SCO, an inter-governmental organization founded in Shanghai in 2001, groups China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan, covering over 30 million square km and accounting for a quarter of the world's population.

It has Afghanistan, Belarus, India, Iran, Mongolia and Pakistan as observers, and Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka and Turkey as dialogue partners.