The power of presence: engaging China in the Arctic

‘[We are] confronted with unpredictable international developments and a complicated and sensitive external environment. Our task at hand is to maintain stability as we continue our reform and development. … We must maintain a high degree of vigilance. We must keep our high alert about any ‘black swan’ [or unforeseen] incident, and also take steps to prevent any ‘grey rhino’ [highly possible yet ignored threats].’[101]

‘China must defuse international crises and cunningly use them to its own advantage.’ [102]

Xi Jinping

In what ways could and should the Netherlands and the EU address China’s growing presence in the Arctic, and in Greenland and Iceland in particular?

5.1 China’s Arctic strategy

To answer this question, it is worthwhile to summarise the Chinese strategic vision of the High North. The PRC sees the Arctic as one of the geostrategic arenas in which its fate as a rising superpower will be decided. Building a legitimate Arctic presence is a long-term project, with long-term goals pursued by short- and medium-term methods.

Why? Because of what Xi Jinping likes to call ‘Grey Rhinos’ – predictable threats of huge consequence in the (very) long term, such as climate change – and ‘Black Swans’ – unpredictable, seemingly small events that turn into game-changers to the international system, like the 2008 financial crisis or the 2020 Corona crisis, even if it was forecast in some scenarios. Xi will most likely see the Arctic as an arena full of Grey Rhino threats and Black Swan risks, such as the following:

Grey Rhino Threats	Black Swan Risks
Climate change-related security threats	Ecological crisis
Opening-up of the NSR	Russian economic or political collapse
Re-militarisation of the Arctic	Icelandic economy falters
Growing tension between US-Russia-China	Greenland independence movement
UNCLOS disputes

China’s policy of building up its presence in the Arctic arena is as little about seeking hegemony as it is about scientific exploration; it is about building capacity to shape decision making when a Grey Rhino threat materialises, and also about being able to quickly use a Black Swan crisis to its own advantage, such as it did during the financial collapse of Iceland. In the Arctic arena, China exploits the two basic geostrategic advantages it has all over the world: it is big enough to be everywhere and able to take things slow. It pursues a policy of building presence before seeking power, knowing that it can cash in whenever circumstances demand it.

This leads us to three key insights into the Chinese Arctic strategy:

China’s has systematically used voids in the European geostrategic imagination – Greenland and Iceland in particular – to build presence and seen as a legitimate near-Arctic power.

To European countries, China’s growing presence in the Arctic is not a direct threat, but a classic Grey Rhino challenge itself – a long-term strategic issue of great importance and low urgency.

European countries share many of China’s interests in dealing with the abovementioned threats and risks, even though they may prioritise and frame them differently.

Above all, China shows the power of presence: by claiming a chair at the table, it is already reshaping the geopolitics of the High North.

5.2 EU Arctic strategy

The EU’s challenge will be to re-engage the Arctic, and Iceland and Greenland in particular, in a similar multi-layered way, coordinating short- medium- and long-term strategies. As the European Commission's China strategy reminds us:

China is, simultaneously, in different policy areas, a cooperation partner with whom the EU has closely aligned objectives, a negotiating partner with whom the EU needs to find a balance of interests, an economic competitor in the pursuit of technological leadership, and a systemic rival promoting alternative models of governance. This requires a flexible and pragmatic whole-of-EU approach enabling a principled defence of interests and values. The tools and modalities of EU engagement with China should also be differentiated depending on the issues and policies at stake. The EU should use linkages across different policy areas and sectors in order to exert more leverage in pursuit of its objectives.[103]

With particular reference to the Arctic, the EU should match China's strategic ambiguity by adopting a pragmatic, integral and varied approach, pursuing different modes of engagement and different timelines simultaneously. The spectrum of potential engagement offers the EU three basic modes of action in the short, medium and long term:

China’s growing presence in the Arctic is, especially in the short term, an opportunity for European research as well as for the economies of the European Arctic countries.

In the medium term, European countries should prepare for commercial competition with China, the US and Russia over the potential gains of an ice-free Arctic.

China challenges the EU to build a strong geostrategic presence in the High North, embracing issues of security and great power competition, not to aggravate, but to lower tensions between China, the US and Russia in the long term, and to help smaller countries like Greenland and Iceland keep geopolitics at bay.

5.3 Dutch strategy

The Netherlands has an important role to play both in engaging the Arctic by means of its own Arctic policy, as well as in co-shaping EU policies. The Dutch Arctic strategy focuses on sustainability, international cooperation and scientific research. These are probably the areas where it has most influence, although it also has (potential) commercial interests in resource exploration and maritime transport via the Arctic, and it is a big importer of fish from Greenland and Iceland. As a member of NATO, the Netherlands would also be able to address Arctic issues there. The importance the Netherlands attaches to the region is underlined by the position of an Arctic Ambassador.

Within the Arctic Council, the Netherlands as an observer is active in three working groups, namely, the Arctic Monitoring and Assessment Programme, Conservation of Arctic Flora and Fauna and the Sustainable Development Working Group. The Dutch Polar Programme is at the forefront of polar research, participating in research at Spitsbergen (Svalbard).

To the Netherlands, specifically, the strategic challenge will be to:

cultivate its leading role in Arctic research, working with the PRC where possible and mutually beneficial, while contributing to an expansion of shared EU research investments

help prepare Dutch companies for current trends and coming shocks in the Arctic economy, including China’s growing presence; coordinate Arctic and China policy

help lead the call for an EU geostrategic outlook on the Arctic, including China’s role.

To this end, the Dutch government would be recommended to:

With regard to the Dutch Arctic policy:

Consider how Sino-Russia cooperation in the Arctic may influence possibilities for maritime transport from the Netherlands/north-western Europe to China

Keep investing in Polar research

Investigate to what extent worries and/or questions exist with Dutch Arctic researchers concerning cooperation with China

Invest in research cooperation with Greenland and Iceland

Consider how the Netherlands’ strategic position as fish importer and distributor might be affected by increased demand by China for fish from Iceland and Greenland

Coordinate Arctic and China policy, e.g. with regard to the digital connection from Finland to China (Arctic Connect)

Forecast the impact of an ice-free Arctic, how EU-China relations and EU relations with Iceland and Greenland will be affected, e.g. with regard to fisheries

With regard to the Dutch position in EU:

Assess what strategic technologies and minerals/rare earth elements are of particular concern to the Netherlands, and consider how the EU’s raw materials strategy could take this into account

Support investments into Russian Arctic development, notably with regard to harbour development and search and rescue capacity

Support a re-opening of EU accession negotiations with Iceland, and should Greenland become independent from Denmark do the same for this country. If Greenland continues to be part of the Kingdom of Denmark, aim to re-include it in the European Economic Zone

Consider supporting an increase of spending for the EU’s OCTs even if this adds pressure to the overall debate on the EU budget

Reconsider how EU sanctions against Russia might lead to (unwarranted) Sino-Russia cooperation in the High North and how this could be addressed.

Support the EU being granted observer status in the Arctic Council, despite this not seeming to make a significant difference in the short term (it nevertheless is of symbolic value)

Support the EU in starting a four-way dialogue on confidence-building measures to lower tensions in the Arctic (EU, US, China, Russia)