When, in 2018, the People’s Republic of China published its first Arctic strategy, claiming that the Middle Kingdom is a ‘near-Arctic state’, a snigger could be heard throughout the world of Arctic diplomacy. Indeed, with Beijing being further removed from the North Pole than, for instance, Berlin, it certainly was a steep claim to make. Yet, its symbolic importance to Chinese geopolitics is not to be sniggered at. China’s history of engagement with the Arctic reveals a longstanding ambition to be recognised as a great power in circumpolar politics.

2.1 Building presence: the long-term drivers behind China’s engagement with the Arctic

Chinese official accounts often refer to the Spitsbergen Treaty, to which the Beiyang Government of the Republic of China became a signatory in 1925, as proof of China’s historically legitimate presence in the Arctic.[1] The Spitsbergen Treaty recognises the sovereignty of Norway over the archipelago of Spitsbergen (Svalbard), while giving all signatories equal rights to engage in commercial activities on the islands.[2] Civil war and the Japanese occupation pushed the Arctic far off the Chinese political agenda in the decades afterwards.

When it came back, it did so as a geopolitical conundrum. After the 1960 Sino-Soviet split, the Soviet Union threatened a nuclear strike against China. Both US and Russian missile trajectories to China cross the Arctic, going over the Spitsbergen (Svalbard) archipelago. Consequently, China came to recognise the Arctic as an equally vital, as well as problematic, part of its nuclear security, as China was in no position to exert control over the region. Consequently, Chinese media discussing the Arctic in the 1970s focused on Russian and American military capabilities in the region, framing their influence as a security threat to China.[3]

Interest in the Arctic evolved in the 1980s, when China woke up to the commercial potential of the Arctic, as Anne-Marie Brady explains:

At this point, however, China did not have the capacity to develop commercial activities in the Arctic, nor did it have the geopolitical clout to claim a place in Arctic affairs. In concurrence with Deng Xiaoping’s policy of ‘opening up to the world’ China had to build a track record of Arctic engagement to be seen as a legitimate polar power.

In the meantime, Arctic diplomacy entered a new age: after the collapse of the Soviet Union, the High North changed from a highly militarised arena of power politics, to a shining example of international cooperation. This new narrative context of Arctic governance emphasised scientific exploration, sustainable development and diplomatic cooperation. It culminated in the foundation of the Arctic Council, still the principal forum for Arctic governance, in 1996. The Council was set up with the explicit notion of not discussing issues of military security. Here, China’s strategy to build a presence in Arctic affairs by contributing to scientific exploration and sustainable development was born. China’s contribution to Arctic research has grown considerably, but as can be seen in the graph below China's research is of relatively low impact, especially compared to, for instance, the Netherlands.

As we can see here, Dutch Arctic research still seems to have far more impact than Chinese research, which is also less specialised. Lackenbauer, P.W. et al. 2018. China’s Arctic ambitions and what they mean for Canada, Calgary, University of Calgary Press.

A number of milestones empowered China to take the next step and claim a place in Arctic governance. In 1996 China became a member of the International Arctic Science Committee. In 1999 it purchased the Xue Long Icebreaker, which it used increasingly for Arctic expeditions from 2003 onwards. In 2003, it established the Yellow River Research Station on Spitsbergen (Svalbard), which replaced the temporary Yilite-Mornring Arctic Scientific Expedition and Research Station. In 2007 it was present at the Arctic Council for the first time. In 2013 it became an observer.

Since that time, China has greatly expanded its activities in the Arctic across the spectrum of engagement: geostrategic, commercial, scientific and diplomatic.

2.2 Chokepoints: the Arctic as part of China’s maritime strategy

Xi’s 2014 statement that China ought to become a ‘polar great power’ led to the first-ever published Arctic White Paper in 2018 that heralded the establishment of a ‘polar silk road’. As one can say about many aspects of China’s geopolitics during the Xi era, it would be a mistake to interpret China’s Arctic acceleration as wholly novel: in fact, closer consideration of China’s Arctic policymaking shows that it is embedded in China’s long-term geopolitical and maritime strategies.[5]

The management of China’s polar activities – which also includes its activities in the Antarctic – are distributed among more than 17 state and party organisations. Most fall within the confines of China’s maritime bureaucracy, with some branching out into national security or foreign affairs.[6] In 2018, the State Oceanic Administration – which used to coordinate all Arctic policy as a subdivision of the Ministry of Land and Resources – was dissolved and its tasks divided over several ministries. Now, the Central Foreign Affairs Commission of the CCP, chaired by Xi, is the leading body to set geopolitical, maritime and, therefore, Arctic policy in China.[7] This reshuffle should be seen as an effort to strengthen the party’s – and in particular the Party leader’s – control over foreign policy, and to better integrate maritime and Arctic policies within China’s geopolitical strategic framework.

As the largest trading nation on earth and home to most of the largest ports in the world,[8] China sees US control over the important chokepoints of global shipping as a commercial and geostrategic threat. China’s maritime strategy aims to create shipping routes that are free from US influence. In this perspective, climate change in the Arctic provides China with a relatively distant, but vital opportunity, which will, in turn, imply a major geopolitical event for the seafaring nations, including those in Europe.

China’s focus on the Arctic lies, in the short term, on development of liquified natural gas (LNG), and in the long term on the opening up of the Northern Sea Route, which is at present still covered in ice for most of the year. Due to climate change, the NSR is expected to be fully operational as a shipping route by 2030 and is likely to be ice free throughout the year by that year, according to the Netherlands Bureau for Economic Policy Analysis (CPB).[9] The potential impact of the NSR opening up should not be underestimated:

The shipping distance between China and the Netherlands will be reduced by 23 percent when the NSR opens up. In 2013, M/V Yong Sheng, a commercial ship of the China Ocean Shipping (Group) Company (COSCO) undertook its first voyage from a Chinese port to Rotterdam via the NSR.[10] It should be noted that two other shipping routes in the Arctic could open up as a result of melting polar ice: the Northwest Passage, which trails the Canadian Coast, and the Transpolar Sea Route. However, both are expected to be ice free later than the NSR.

Source: Bekkers et al., Melting ice caps, 2.

An operational NSR could reduce the commercial and consequently the geopolitical importance of the Southern Sea Route (SSR). The SSR connects a number of geopolitically sensitive chokepoints – from the Strait of Gibraltar, the Suez Canal, to Bab-el-Mandab and the Malacca Strait – all of which have traditionally been closely aligned with US interests. By opening up the NSR, climate change in the Arctic offers China a unique opportunity, not only to further its commercial interests, but to accelerate its announced rise as a ‘great maritime power’.[11]

The 2018 Arctic policy White Paper is novel in the sense that it explicitly links the Arctic – so far mainly a maritime issue – to China’s Belt and Road Initiative (BRI), adding a more explicit geostrategic dimension to China’s narrative on the Arctic:

The Polar Silk Road strategy is a combination of newly initiated projects and the re-branding and acceleration of existing projects, aimed at enhancing China’s economic presence in the Arctic. At the same time, it is a consequence of China’s old Arctic conundrum, wanting to be a major player in a geopolitical arena in which it has no territorial foothold. As such, it is already shaping great power relations in the Arctic arena.

2.3 Geopolitics on ice: how China is shaping Russian and US Arctic policy

The concept of a Polar Silk Road was first coined not by Xi Jinping, nor by any other Chinese official, but by a Russian minister at a 2011 conference on Arctic security. This was widely seen as part of Russia’s efforts to find the necessary partners to develop its Arctic coast as a major hub in Eurasian connectivity.[13]

The commercial potential of the Russian Arctic is significant,[14] as it holds the bulk of the Arctic’s undiscovered natural resources, which, estimates say, add up to roughly 13 percent of the world’s undiscovered crude oil and 30 percent of undiscovered natural gas.[15] The Yamal-Nenets region carries particular weight in this respect. Russia, however, lacks the technology and capital to develop the region on its own. Before the 2014 sanctions were imposed, a range of Western companies with the necessary expertise, among them Shell, were expected to join in.[16] But after the sanction regime hit the Russian oil and gas industries, Russia had to look elsewhere. Specifically, it decided to look east.

In 2017, Chinese Foreign Minister Wang Yi told his Russian counterpart Sergei Lavrov that:

This was quickly followed by a statement, made as part of China’s Vision for Maritime Cooperation under the Belt and Road Initiative, confirming that it envisions a ‘blue economic passage’ leading to Europe via the Arctic Ocean.[18]

Chinese financing has been key in the economic development of the Russian Arctic. In 2016 the Russian Liquified Natural Gas (LNG) producer Novatek signed an agreement with the China Development Bank and the Export-Import Bank of China for loans of US$ 12 billion to finance the Yamal LNG project.[19] A year later President Putin launched the US$ 27 billion plant. Novatek is the majority shareholder (50.1%): 20 percent of shares are owned by the state-owned China National Petroleum Corporation (CNPC) and 9.9 percent by China’s Silk Road Fund.[20] Recently, Novatek announced the construction of Yamal LNG 2, again funded by CNPC (10%) with additional funds from the China National Offshore Oil Corporation (10%).[21] It should be noted that European financing is far from absent, with French Total being involved as well.

Overall, China has provided up to 60 percent of funds for the Yamal LNG development; in return, 80 percent of equipment will be produced in Chinese shipyards.[22] Gas from Yamal can reach Chinese ports in two weeks, half the time required to ship gas from the Middle East via the Suez Canal.[23] China has committed to building a new mega-port in Arkhangelsk,[24] which COSCO will use as its base for Arctic shipping.[25] Recently, the China Development Bank provided Russia’s state Vnesheconombank with a $9.5 billion credit agreement to develop the Northern Sea Route and fund other Silk Routes in the Russian Arctic.[26]

Strategic cooperation between Russia and China in the Arctic has increased in other fields as well. In 2015, Russia and China announced they would team up to develop satellite navigation.[27] Both countries have developed navigational systems that ought to be able to compete with or replace the ubiquitous and US-owned GPS. China’s BeiDou is expected to be able to live up to that promise.[28] Last year, BeiDou initiated global coverage, and in September 2019 it announced it would run tests, to be carried out at its research station in Spitsbergen (Svalbard), aimed at improving BeiDou performance in the High North, easing its navigation along the Russian coast in particular.[29] In addition to this, China and Russia agreed to launch a joint research centre to forecast weather conditions on the NSR and inform Arctic economic development.[30]

In 2015 ships from the People’s Liberation Army Navy (PLAN) visited the Bering Sea for the first time, after having completed military exercises with Russia in the North Pacific, just when then-US President Barack Obama was visiting Alaska.[31] At the same time, Sino-Russian cooperation has its limits, Russia being wary of China gaining too much influence.[32]

The Finnish project Arctic Connect adds a digital component to China’s Polar Silk Road. Arctic Connect aims to link Europe and Asia through 13,800 km of submarine communication cables along the NSR. It promises to deliver faster and more reliable internet connections between Russia, China and Europe, and embodies Finland’s hope to become a major hub in global dataflows. The company hired to lay these cables is Huawei Marine, a Huawei joint venture. Experts warn that this would enable China to increase its defensive and offensive intelligence-gathering capabilities, because its data transfers would no longer flow through foreign cables. Moreover, as data cables can also be used for gathering scientific and military surveillance information, there are worries that Arctic Connect could be turned into an undersea surveillance system.[33]

Sino-Russian rapprochement – within and beyond the PSR – has contributed to a most dramatic flip-flop in US Arctic policy. When it co-founded the Arctic Council, by signing the Ottawa Declaration, it pushed for an ominous footnote to be added, which stated:

By force of these words, it changed the narrative context of Arctic governance. In 2019 US Secretary of State Mike Pompeo did that again on the evening before the start of the Arctic Council meeting in Finland, using phrases that left little to the imagination:

Within the Trump narrative, the Arctic fits into two frames: first, climate change is transforming it into a commercial goldmine, ready to be claimed by entrepreneurial pioneers; second, the Arctic is a massive chessboard in which new geopolitical challenges will be fought out.

Pompeo specifically called out China’s presence in the Arctic, and Russia's new Arctic engagement, as dangerous and illegitimate:

A month later, the Pentagon published its new Arctic defence strategy, which focused heavily on China and Russia. Acknowledging that China does not have a military presence in the Arctic, it warns that it may use its civilian capacities in the Arctic for military proposes, and it argues that ‘there is a risk that its predatory economic behaviour globally may be repeated in the Arctic’, which would be, according to the defence strategy, a national security threat.[35]

The US Navy and Coast Guard have since announced the US will spend roughly $1.9 billion on a fleet of new icebreakers.[36] Moreover, the National Defense Authorization Act, passed by the US Senate in July 2019, directs the Pentagon to make plans for the construction of a ‘strategic port’ in the Arctic, probably in Alaska, to be better able to project military power in the High North.[37] As a move in its trade war with China, the US blacklisted Chinese shipping company COSCO, which might have serious adverse effects on the Russian Yamal LNG projects, as well as on a Canadian joint venture with COSCO.[38] The growing vehemence with which the Trump administration seeks to counter China’s rise are only expected to continue to influence Arctic relations.

2.4 Conclusion: why China is in the Arctic

From a historical perspective, China’s engagement with the Arctic was born out geostrategic considerations, was further fuelled by commercial interests developed within the context of its maritime strategy, and led to China playing an increasingly influential role in scientific exploration and Arctic governance. Since Xi Jinping took office in 2012, China’s Arctic policy has become far more specific. It now has an explicit geopolitical purpose, within the context of China’s geo-economic expansion, maritime ambitions and its changing relations with the US and Russia.

The question is: where does China’s Arctic presence leave the EU and the Netherlands? Should they be worried about China expanding its presence in the Arctic or rather consider it a normal development linked to the overall economic rise of China and the Arctic region becoming more attractive commercially? And what about the specific Chinese interest in Iceland and Greenland, which are not of strategic value to the Northern Sea Route, but are otherwise strategically positioned in the region.