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The vast majority of policymakers in Westminster, let alone elsewhere around the UK, have never heard of the Shanghai Cooperation Organisation, the geopolitical grouping currently holding its summit at Tianjin, but hear me out on why we should all be paying considerable attention to it.
Because the more attention you pay to this grouping of 10 Eurasian states – most notably China, Russia and India – the more you start to realise that the long-term consequences of the war in Ukraine might well reach far beyond Europe’s borders, changing the contours of the world as we know it.
The best place to begin with this is in February 2022, when Russia invaded Ukraine. Back then, there were a few important hallmarks in the global economy. The amount of goods exported to Russia by the G7 – the equivalent grouping of rich, industrialised nations – was about the same as China’s exports. Europe was busily sucking in most Russian oil.
But roll on to today and G7 exports to Russia have gone to nearly zero (a consequence of sanctions). Russian assets, including government bonds previously owned by the Russian central bank, have been confiscated and their fate wrangled over. But Chinese exports to Russia, far from falling or even flatlining, have risen sharply. Exports of Chinese transportation equipment are up nearly 500%. Meanwhile, India has gone from importing next to no Russian oil to relying on the country for the majority of its crude imports.
Indeed, so much oil is India now importing from Russia that the US has said it will impose “secondary tariffs” on India, doubling the level of tariffs paid on Indian goods imported into America to 50% – one of the highest levels in the world.
The upshot of Ukraine, in other words, isn’t just misery and war in Europe. It’s a sharp divergence in economic strategies around the world. Some countries – notably the members of the Shanghai Cooperation Organisation – have…
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