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Why the world should take notice as Saudi Arabia joins Chinese alliance – and how this relates to Taiwan

China's president Xi and Saudi Saudi king Salman
Saudi Arabia has moved closer to China as an ally. Associated Press/Alamy

Saudi Arabia’s cabinet recently approved the decision to join the China-led Shanghai Cooperation Organisation (SCO).

This could be a signal that Riyadh, with all its energy reserves, is choosing sides in the Ukraine war. Saudi Arabia, in part stung by US president Joe Biden’s refusal to deal with the Crown Prince Mohammed Bin Salman, is moving closer to Russia and China, particularly since the Chinese brokered a rapprochement between the kingdom and Iran.

The SCO began its life in 1996 as the “Shanghai Five” made up of People’s Republic of China, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. In 2001 it admitted additional central Asian states and renamed itself as the SCO, a military, political and economic collaboration organisation. Since then most other central Asian states have joined, plus Mongolia as an observer and critically, in 2017, Pakistan and India.

In 2023 the SCO has nearly 50% of the global population as member states, observers or partners and approximately 30% of the global economy in nominal terms (that is pure dollar terms). It represents just over 40% in purchasing power parity (PPP), a term that measures economic power adjusted for the cost of goods in a country or group of countries.

To put that in perspective, the G7 represents a much smaller population and only about 27% of the global economy in PPP terms.

The SCO already had more economic clout than the G7 and in 2021 held its latest set of combined military exercises. And now resource rich Saudi Arabia is joining. The SCO holds frequent joint military and counter terrorism exercises with the next planned later in 2023. It will be interesting to see how Saudi engages militarily.

This edging closer to Beijing is particularly significant given that China has recently strengthened its diplomatic credibility by negotiating a rapprochement between Saudi Arabia and Iran.

The various Iranian/Arab disputes have been one of the reasons that the Middle East and Iran have remained unstable, fragmented and unable to push a regional approach to their problems.

Read more: Saudi-Iran deal won't bring peace to the Middle East but will enhance China's role as power broker

Part of a wider strategy

The calamitous war in Yemen is but one example. The conflict has been a proxy war between the Saudis and the Iranians for dominance of the region. As Saudi’s cost of oil production is lower than Iran’s, part of the Saudi strategy has been to keep oil prices artificially low, preferably below the US$65 (£52) per barrel figure that some analysts think to be the price Iran needs to balance its budget.

An infographic showing exports from Saudi Arabia to China
OEC:, Author provided (no reuse)

So, it’s not a surprise that almost immediately after the Chinese negotiated the Iran/Saudi deal Opec, the oil cartel, of which both countries are members, announced cuts in production. The resulting oil price rises that will keep inflationary pressures on the west – and the Russian economy afloat.

Many in the west think that the majority of the world is against Putin’s war in Russia and want sanctions on Russia to work. However the Economist Intelligence Unit has just published an analysis showing that support for Russia is growing in the developed world, in part driven by memories of European colonialism.

Chinese influence grows

Meanwhile, China’s president Xi Jinping is using the Ukraine war to test western resolve, use up western war stocks of munitions and assess the effectiveness of the weaponry the west gives the Ukrainians, all while moving closer to Xi’s stated aim of reunifying the mainland and the island of Taiwan.

India, as a member of the SCO and the Quad (the loose alliance of Australia, India, Japan and the US), is doing what India does best – playing both sides of the sword. Prime minister Narendra Modi, when asked recently if India is more drawn towards China’s pole of influence, or America’s, said: “We are creating a third pole.”

And while all this is going on Australia, the UK and US announced their new Aukus security partnership, with one eye on a potential conflict with China over Taiwan.

China’s expansion of the SCO and its recent exercising of its diplomatic muscle is all in support of its objective to be regarded as a world power – and to prepare its alliances for China’s stated strategic aim of reunification with Taiwan.

What it means for Taiwan

Recently Beijing reminded the world that, in 1971, UN resolution 2758 confirmed its position as the lawful government of China.

As tensions rise, the expansion of the SCO, and debate around the meaning of resolution 2758 are likely to become more important.

The day before UN resolution 2758 was passed in 1971, the recognised territory of China included both the mainland and Taiwan. It had to include both because the government of Taiwan was the internationally recognised government of all of China. Resolution 2758 changed the recognised government from Taipei to Beijing, but did not comment on the borders of the territory of China, and therefore the borders haven’t changed.

Taiwan’s constitution still claims the mainland, and still contains “transitional provisions” for elections until reunification. Reunification is a specified aim in Taiwan’s constitution. The two political parties in Taiwan have diverging opinions on integration with, or independence from, China.

China, through the SCO and other tools, is lining up its allies to back its position on Taiwan as it ramps up its rhetoric. It carried out military drills around the island on the weekend of April 8 2023, then announced it would be banning ships from entering an area north of Taiwan on April 16 due to “possible falling rocket wreckage”.

The US is firming up its core allies who could support its position on Taiwan through Nato and Aukus but is leaking support in the developing world.

The world just got a lot more complicated.

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