China’s Arctic Ambitions

China may have no territory near the Arctic but, as officials like to recount, it feels the region’s pain when it comes to climate change. “There’s this dynamic where Chinese officials are saying ‘indigenous people in the Arctic are affected by the rising sea levels of climate change, but so is China’. It’s a way for China to legitimise its activity there,” said Dr Mia Bennett, Assistant Professor of Geography who has been researching geopolitics in the Arctic since 2009.

That activity has become more prolific over the past decade. On the one hand, China is investing in the region. For example, the state-controlled Silk Road Fund and China National Petroleum Company have stakes of 9.9 per cent and 20 per cent, respectively, in the Yamal Liquefied Natural Gas (LNG) project in Russia, the largest LNG project north of the Arctic Circle. The Silk Road Fund China and another Mainland oil and gas enterprise, Sinopec, also each own 10 per cent of Russia’s largest petrochemical producer, Sibur.

On the other hand, it is increasing its physical engagement there. In 2012, the icebreaker, Xue Long (Snow Dragon), became the first Chinese vessel to cross the Arctic Ocean to Europe. And growing numbers of Chinese tourists have been visiting the region. Although numbers are difficult to estimate, the impact can be seen in the acceptance of Alipay in Arctic countries such as Norway and Finland, and the employment of Chinese-speaking staff in hotels and cruise ships.

In January 2018, China formalised its interest in the region when it unveiled its Arctic Policy setting out its foreign policy approach there and its plans to build up the ‘Polar Silk Road’ as an extension of the Belt and Road Initiative.

Polar Silk Road

“The Polar Silk Road, in a literal sense, refers to the shipping corridor that links China with Europe via Russia’s northern coast, which is increasingly accessible due to climate change,” Dr Bennett said. But the Arctic Policy also shows China is thinking further ahead than other countries in considering the possibility of developing shipping across the North Pole if the warming of Arctic waters should make that possible.

“China and other Asian countries see the opportunities of climate change to be in some sense greater than the threats. Whereas the Arctic states [which include Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the United States] see a less equal trade-off,” she said.

China’s activity has inevitably inspired suspicion in some of those states, but Dr Bennett said her research – which includes analyses of policy documents, field visits and interviews with officials, businessmen and others in the region, and remote sensing – suggests that for now, China is largely motivated by commercial and scientific interests, which include a scientific research station at Svalbard in Norway.

“Despite the more fear-mongering headlines in the Western media that the Chinese have large military designs on the Arctic, I don’t see that happening in the near future,” she said.

A greater say

Nonetheless, China and other Asian states are seeking a greater say in the Arctic commensurate with their status as rising global powers, and Arctic states are taking note. In 2013, China, India, Japan, Singapore and South Korea were given observer status at the Arctic Council, an intergovernmental body representing the eight Arctic states.

China, Japan and South Korea were also invited to sign a 2017 treaty banning fishing for the next 16 years in the central Arctic Ocean, which was also signed by the Arctic states and the European Union. This is a preventive measure until more is known about fishing stocks in the region.

“This agreement underscores the real influence Asian states are having in Arctic governance and Arctic commercial development in future,” Dr Bennett said.

The response to these activities from the people and Arctic states has been telling. Dr Bennett reports that people in Norway, Russia and Greenland are generally welcoming of the Chinese presence. When China showed interest in investing in Greenland’s airports, some Greenlanders even regarded it as a way to gain more independence from Denmark, which still oversees the country’s military and foreign affairs. However, that deal was vetoed by Denmark and, allegedly, the US, which both remain wary of Chinese activity in the region. As a result, China is treading carefully as it makes inroads to the Arctic.

“The southern capitals are still sceptical that Chinese investment is being driven by some geostrategic or military element, so China is very careful how it frames its involvement in the Arctic. It is trying to tamp down that rhetoric,” she said.