The Shanghai Cooperation Organization (SCO) is a Central Asian security bloc led by China and Russia that is often described as a future Eastern counterweight to NATO. It held its annual summit last week in Kazakhstan, and the most significant outcome was the announcement that India and Pakistan became its first new members since being formed in 2001. The evolution of the SCO looks set to continue, with Iranian membership gaining momentum and Turkey’s an increasing possibility.
If this initial expansion of the SCO into the Middle East happens, it is likely to spark interest among Arab states to apply as well. Washington’s muddled response to the current dispute between the GCC and Qatar, combined with the perception that the U.S. is disengaging from global leadership, gives leaders in the Middle East reason to look to as many external powers as possible as potential security partners.
Iran has long been building toward SCO membership. An observer state since 2005, it applied for full membership in 2008. Its application never gained traction while it was under United Nations sanctions, as per the organization’s regulations. With the lifting of sanctions last year, Iranian accession was a main point of the 2016 summit’s agenda, and momentum is building.
Leading to this year’s summit, Russia’s President Vladmir Putin said, “We believe that after Iran’s nuclear problem was solved and United Nations sanctions lifted, there have been no obstacles left.” China’s Deputy Foreign Minister Li Hailai said last week that China “welcomes and supports Iran’s wish to become a formal member of the SCO.” President Xi Jinping already expressed approval for Iranian membership while visiting Tehran last year. Given the distribution of power in the SCO, China and Russia will play a large role in influencing the shape of the organization’s expansion.
Turkey could also draw the SCO further into the Middle East. It is currently an SCO dialogue partner, but one that expressed an interest in full membership. Turkish President Recep Tayyip Erdogan has spoken of the common values between Turkey and the SCO member states, drawing a contrast between Turkey’s uneasy relationship with the European Union. China’s ambassador in Ankara said last month that China “is ready for Turkey’s membership.” Russia is keen as well; Turkish integration into a Eurasian order and away from the E.U. benefits Russian economic and security interests.
SCO accession for Iran and Turkey does not only reflect the organization’s ambitions to expand. It is also consistent with China’s vision for the Belt and Road Initiative (BRI), its plan to create a new silk road across Eurasia, and the signature foreign policy initiative under Xi.
Iran is an important BRI partner; the China-Central West Asia Economic Corridor has Iran as one of its end points, connecting the two states through infrastructure investment projects. Last year, for example, a 32-car freight train traveled from Iran to Zhejiang province in 14 days, as opposed to the usual month-and-a-half the same shipment would take by sea. On the trade side, there has been tremendous growth between China and Iran in recent years, with bilateral trade jumping from $8.5 billion in 2005 to $31.6 billion last year.
Turkey also features prominently in the BRI. It is another endpoint in the China-Central West Asia Economic Corridor, with dense cooperation in infrastructure projects set to increase regional connectivity. A high-speed railway across Turkey was recently completed, built by a joint Chinese-Turkish consortium, funded partly with a $750 million Chinese loan. This paves the way for deeper Chinese participation in other infrastructure projects in Turkey. Sino-Turkish bilateral trade growth has been similarly impressive, increasing from just under $7.5 billion in 2006 to over $27 billion in 2016.
Complications in the Persian Gulf
It is in its relations with the Gulf Cooperation Council (GCC) that SCO expansion into Iran and Turkey could present complications for China, however. While not actively incorporated into any BRI projects, the GCC is an important relationship for China. More than 30 percent of its oil imports come from Saudi Arabia, Oman, Kuwait, and the United Arab Emirates (UAE), and Qatar is China’s largest source of natural gas. Saudi Arabia and the UAE are China’s largest trading partners in the Middle East, and China-GCC trade amounted to $114 billion in 2016. A China-GCC free-trade agreement has long been in the works, and it is expected to be signed in the next year. In short, the GCC is an important factor in China’s Middle East policy, and closer ties to Iran and Turkey could complicate this.
In this environment, China has refused to pick sides, calling for a diplomatic solution and emphasizing the need for stability in the Gulf. This is consistent with China’s approach to the region. When Saudi King Salman visited Beijing in March, for example, Chinese Foreign Minister Wang Yi offered to play a mediating role to reduce tensions between Saudi Arabia and Iran. However, with talk of Iranian SCO membership, there is a perception that China has chosen its side in the Gulf.
The Saudi-Iranian rivalry emphasizes the diplomatic problems that SCO membership for Iran and Turkey could have on China’s Middle East policy. At the same time, it also gives a possible vision of further SCO expansion. Accession for India and Pakistan demonstrated that the SCO is willing to accept rival states into the fold. As Iran comes closer to full membership, it would not be surprising if Saudi Arabia and its partners in the GCC expressed interest in joining the SCO as well. Saudi-Iranian competition and an unclear U.S. policy is making the Gulf a theater for ambitious external powers with regional interests. The Arab Gulf monarchies can be expected to pursue closer ties with these powers, making the Gulf look more like a multipolar system than at any point since the end of the Cold War.
By Jonathan Fulton