Why Saudi Arabia is joining the China-led SCO

Just weeks after announcing a normalisation in relations with Tehran, Riyadh has decided to join the China-led Shanghai Cooperation Organisation (SCO) as a dialogue partner.

Taking one more step towards the east, Riyadh seems to be emerging as an independent geopolitical player with a multipolar approach.

Having discussed its inclusion in the SCO during a visit by Chinese President Xi Jinping to the Kingdom last December, Riyadh announced the final decision last week after a high-level cabinet session presided over by King Salman bin Abdulaziz.

Nowadays, Riyadh is focusing more on building a long-term partnership with its largest trading partner China, rather than following Washington.

"Participation in the SCO sends another signal to the US that Saudi Arabia is continuing its hedging approach and does not want to be considered as the West's junior partner anymore"

Playing the role of a guarantor, Beijing recently managed to end the eight-year-long bitter rift between Saudi Arabia and Iran with a trilateral agreement.

As a bonus, mending fences with Tehran also cleared some of the hurdles in the way of the Kingdom’s SCO entry.

Though the membership process stretches over several years, eventually Riyadh will need Tehran on its side as a complete consensus of the forum is required for attaining full membership, and Iran’s formal inclusion as the ninth member of the SCO is due to take effect in April 2023.

But what made Riyadh shift towards neutrality, and how can it benefit from joining an organisation like the SCO?

Beijing and Riyadh have mainly grown closer due to geo-economic reasons.

China has become Saudi Arabia’s largest trading partner, with bilateral trade worth $87.3 billion in 2021. Becoming a larger importer of Saudi Arabian oil than the US last year, Beijing is buying around 1.75 million barrels per day.

In addition, Beijing finalised multibillion-dollar investments in Saudi Aramco, and a joint venture is planned in north-east China.

Even as it became more dependent on Riyadh for its energy security, China had to make serious efforts to stabilise the volatile oil-rich region, and the Kingdom became a willing ally.

While Washington used to import one million barrels a day in 2016, these supplies dropped below 500,000 barrels a day last year.

“Geopolitically, it [the SCO] is a discussion forum where general, and often immediate, issues of security are negotiated; potential compromises and solutions can possibly be had in these negotiations and discussions,” Mohamed Forough, a researcher at the German Institute for Global and Area Studies (GIGA) Institute in Hamburg, told The New Arab.

“Geo-economically, the SCO facilitates economic and infrastructural integration of Eurasian actors (mainly the member states),” he added.

Functioning diplomatically as well, Forough observed that the SCO is “a (relatively) prestigious club (at least in many Global South perspectives), which can raise the status of member states”.  

According to Forough, Saudi Arabia could benefit along all of these lines and become “a conversation partner in security negotiations, or benefit from geo-economic integration with other member states and enjoy the diplomatic prestige”.

"Both the Saudi-Iran rapprochement and Riyadh's decision to join the SCO are more about China's success in proving its relevance in the Middle East"

However, several variables might still influence Riyadh to change direction.

First, the Saudi ‘Look East’ policy cannot reduce US clout in the region, as Washington continues to have a significant security footprint in the Middle East.

“Saudi Arabia does not turn away from the US as Washington is still the main security guarantor for the kingdom,” Sebastian Sons, Senior Researcher at the Centre for Applied Research in Partnership with the Orient (CARPO) in Bonn, told The New Arab.

For Riyadh, joining the SCO is more about demonstrating that it is independent, and has alternative options.

“Participation in the SCO sends another signal to the US that Saudi Arabia is continuing its hedging approach and does not want to be considered as the West’s junior partner anymore,” Sons noted.

“Here, Saudi Arabia understands its membership in the SCO as another step towards foreign partnership diversification in order to preserve regional stability and pursue national economic motivations.”

According to a report by the Stockholm International Research Institute, Washington, along with being the top arms exporter globally, is also the largest exporter to the Middle East and North Africa regions, providing 54 % of the weapons they bought from 2018 to 2022.

Therefore, Saudi moves towards the east are more of an attempt to diversify and find new options. Second, the SCO consortium remains an untested entity which still must prove its functionality.

Consisting of China, Russia, India, Pakistan, Tajikistan, Uzbekistan, Kyrgyzstan and Kazakhstan as full members, Afghanistan, Belarus, Iran, and Afghanistan as observer states, and nine dialogue partners including Saudi Arabia, Qatar and Turkey, the SCO is a growing regional forum comparable to the North Atlantic Treaty Organisation (NATO) but without any solid military role.

Headquartered in Beijing, the group is more focused on counter-terrorism, and annual joint exercises are to be held in Chelyabinsk, Russia in August, this year.

Recently, there have been discussions in Moscow for the SCO to form a bigger alliance with other regional groupings like the Eurasian Economic Union, the Commonwealth of Independent States, and BRICS, which Riyadh has also applied to join.

However, created under the principles of the ‘Shanghai Spirit’ in 2001, any chronic divergences and lack of engagement among members could kill the purpose of the SCO.

Having too many rivals on board could lead the platform towards stagnation, and two permanent members, India and Pakistan, already have unresolved, long-standing issues.

Ultimately, once both Iran and Saudi Arabia become full members, Beijing may have to do a lot of balancing to contain differences within the forum.

Finally, both the Saudi-Iran rapprochement and Riyadh’s decision to join the SCO are more about China’s success in proving its relevance in the Middle East.

"Absent a systemic disruption it is safe to assume that the current multipolarity of the present moment will not only hold but will be further solidified"

These developments are more about extending Beijing’s reach than about Riyadh’s new stance. With its successful mediation between the Kingdom and Tehran, Beijing has also gained in stature.

“Saudi Arabia’s ambitions to join the SCO show again the kingdom’s interest to enhance cooperation with China beyond the economy,” according to Sons.

“After Beijing facilitated the diplomatic rapprochement with Iran, the Saudi leadership considers China as a growing political player in the Middle East and thus aims to strengthen bilateral ties through its SCO membership.”

In the long term, the China-led SCO could even help integrate a larger region.

“The [SCO] platform offers a potential gateway in order to multilaterally engage with traditional partners such as Pakistan but also with Central Asian countries that are offering attractive business opportunities for the kingdom,” Sons added.

“Finally, the SCO could become a potential future forum in which both Saudi Arabia and Iran engage diplomatically facilitated by China.”

Multipolarity, a regional trend

On a regional level, though, it is Riyadh which has tried to balance Beijing and Washington, and more Arab states can be expected to diversify their foreign policy in the days ahead.

Being the largest Gulf Cooperation Council (GCC) state and leading the Organisation of Islamic Cooperation (OIC) and OPEC, it is natural for Riyadh to lead the way.

Discussing the sustainability of the trend towards multipolarity, Forough assessed that, “Absent a systemic disruption (such as a major superpower war or a sudden environmental catastrophe at the global level or an abrupt technological revolution by a single global actor), it is safe to assume that the current multipolarity of the present moment will not only hold but will be further solidified”.

Sabena Siddiqui is a foreign affairs journalist, lawyer and geopolitical analyst specialising in modern China, the Belt and Road Initiative, Middle East and South Asia. 

Follow her on Twitter: @sabena_siddiqi