Chinese Prime Minister Wen Jiabao says his country sees no obstacle to Iran's membership in the Shanghai Cooperation Organization (SCO).

"We believe that there is no problem with Iran's membership in the Shanghai Cooperation Organization and we support the idea," Wen Jiabao said during a meeting with Iran's First Vice President Parviz Davoudi on Thursday, IRNA reported.

The meeting came on the sidelines of the seventh gathering of SCO Prime Ministers in Astana, the capital of Kazakhstan.

Wen Jiabao added practical proposals put forward by Iranian officials, especially President Mahmoud Ahmadinejad, indicate Tehran's resolution to contribute to the Organization.

Founded in 2001, the SCO works to maintain regional peace, security and stability and to develop effective cooperation in a wide range of areas among member states.

Addressing the 7th meeting of SCO Prime Ministers in Astana, Davoudi suggested setting up a bank among members and observer states in order to edge closer to the ultimate goal of establishing 'an independent financial system.'

Iran's President Ahmadinejad attended the SCO eighth annual summit in Tajikistan's capital, Dushanbe in August. He read out his country's proposals on political and economic issues, among which was the request to undertake organized security measures to counter drug trafficking, crime and terrorism.

He also urged the formation of a joint political committee and a judicial institution to enhance cooperation among the member states.

The organization comprises China, Russia, Uzbekistan, Tajikistan, Kyrgyzstan and Kazakhstan, with Mongolia, India, Iran and Pakistan holding observer status.

Iran has applied for full membership in the organization.