Saudi Arabia joins Shanghai Cooperation Organisation (SCO), a political and security union of countries spanning much of Eurasia, including China, India, and Russia. The move comes after years of close energy cooperation between Saudi Arabia and China, with China far overtaking the US as the main importer of Saudi Arabian oil. In addition to energy cooperation, China has also been investing heavily in Saudi Arabia’s oil industry, with Saudi Aramco raising its multibillion-dollar investment in China by finalising a planned joint venture in northeast China and acquiring a stake in a privately controlled petrochemical group.
The SCO was formed in 2001 by Russia, China, and former Soviet states in Central Asia, and has since expanded to include India and Pakistan. The organisation’s goal is to promote regional stability and counter western influence in the region. Iran signed documents for full membership in 2022, and Saudi Arabia has been granted the status of a dialogue partner, which is a first step towards full membership.
Why Saudi Arabia joins Shanghai Cooperation Organisation
Joining the SCO is part of Saudi Arabia’s efforts to build a long-term partnership with China, its largest trading partner. In recent years, the two countries have increased economic cooperation, with Saudi Arabia seeking to diversify its economy away from oil and gas by investing in Chinese technology and infrastructure projects.
Experts believe that Saudi Arabia is leaning closer to the East and eyeing stronger cooperation within organizations such as the SCO to gain strong momentum for future development. Riyadh’s move comes after a landmark agreement was reached between Saudi Arabia and Iran mediated by China to resume diplomatic ties and reopen embassies and missions within two months after seven years of no diplomatic ties between the two.
Ties between Saudi Arabia and the US have been strained in recent years over oil and human rights issues. As Saudi Arabia pushes for its 2030 vision of reducing its reliance on oil, the US is pushing the country to produce more oil and gas after Washington banned Russian oil and gas after the Ukraine crisis. China is an ideal partner in providing effective and pragmatic cooperation for Saudi Arabia, as it respects Saudi Arabia’s choices and exerts no additional conditions on cooperation.
On Wednesday, construction of a major chemical project, which is a joint investment initiative by China and Saudi Arabia, commenced in Panjin, Northeast China’s Liaoning Province. Total investment in the project is 83.7 billion yuan ($12.2 billion), of which Saudi Aramco holds a 30 percent stake while North Huajin Chemical Industries Group Corporation and Panjin XinCheng Industrial Group hold 51 and 19 percent, respectively. After it goes into operation, the project is expected to become a world-class petrochemical and fine chemical industry base in China.