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Beijing’s Arctic Play: Just the Tip of the Iceberg

by Elizabeth C. Economy
April 4, 2014

A whale dives into sea off the coast of Greenland's capital Nuuk October 17, 2012. By a remote fjord where icebergs float in silence and hunters stalk reindeer, plans are being drawn up for a huge iron ore mine that would lift Greenland's population by four percent at a stroke - by hiring Chinese workers. The $2.3-billion project by the small, British company London Mining Plc would also bring diesel power plants, a road and a port near Greenland's capital Nuuk. It would supply China with much needed iron for the steel its economy. With global warming thawing its Arctic sea lanes, and global industry eyeing minerals under this barren island a quarter the size of the United States, the 57,000 Greenlanders are wrestling with opportunities that offer rich rewards but risk harming a pristine environment and a traditional society that is trying to make its own way in the world after centuries of European rule. Yet a scramble for Greenland already may be under way, in which some see China trying to exploit the icebound territory as a staging ground in a global battle for Arctic resources and strategic control of new shipping routes. Picture taken October 17, 2012. To match Insight GREENLAND/ REUTERS/Alistair Scrutton (GREENLAND - Tags: BUSINESS ENVIRONMENT) A whale dives into sea off the coast of Greenland's capital Nuuk on October 17, 2012. (Alistair Scrutton/Courtesy Reuters)

If you pay attention, Chinese foreign policy rarely surprises. Of course there is the odd moment when Beijing catches the world unaware: for example, its declaration of an Air Defense Identification Zone in the East China Sea in late 2013. Generally speaking, however, the Chinese telegraph their long-term strategic intentions through their smaller tactical maneuvers. It is just that the rest of the world sometimes misses the signals or doesn’t know what to do with the information. Such is the case with China’s emerging play in the Arctic.

Over the past several years, China has begun to stake out its claim to the Arctic. No part of China actually touches the Arctic, but as a recent International Institute for Strategic Studies commentary points out, Chinese scholars routinely describe their country as a ‘near-Arctic’ state, and Rear Admiral Yin Zhuo has argued that the “Arctic belongs to all the people around the world, as no nation has sovereignty over it… China must play an indispensable role in Arctic exploration as we have one-fifth of the world’s population.” This is a signal of Chinese intent.

There are a number of reasons for China’s interest in the region, but four stand out in particular. First, of course, the region is rich in resources: oil and gas, fish, and minerals among them. According to one estimate, the region holds one-third of the world’s natural gas reserves, and resource-hungry China has recognized the region’s potential. China is in talks with Denmark to take stakes in a copper mine in Greenland; China National Offshore Oil Corporation has partnered with Iceland’s Eykon Energy for oil exploration; and China’s Sichuan Xinye Mining Investment Company will be working with London Mining to exploit the country’s iron ore reserves. Uranium and rare earths are additional potential targets for Chinese investment: Greenland has enormous reserves of both, including the capacity to meet 25 percent of world demand for rare earths.

China is also interested in the Arctic for trade reasons. As the climate changes and the Arctic ice melts, three new trade routes may open up that will dramatically reduce cargo transport time and help avoid the security challenges of traditional routes such as the Strait of Malacca. Already, Denmark and China are discussing cooperation to explore these new routes.

In addition, Chinese scholars have made clear their desire to play a significant role in mapping out the climatic changes in the Arctic—as well as understanding the resources the region possesses. Climate change is having a profound impact on China, and Beijing has established a polar research center and has plans to launch three research expeditions to the Arctic in 2015. Smaller Arctic countries such as Iceland are excited to partner with China given Beijing’s significant financial and research capacity.

At the same time, China’s arctic play is part of its broader global diplomacy and desire to engage in a wide range of regional organizations to advance its strategic and trade interests. That means that China wants a seat at the table. In 2013, China and India both attained permanent observer status in the Arctic Council, the region’s governing body that consists of those states that actually border the arctic: Russia, the United States, Canada, Denmark, Finland, Iceland, Norway, and Sweden, as well as six international organizations representing indigenous peoples. It is doubtful that China will remain a quiet observer, however. As Chinese scholar Tang Guoqiang hints, China could serve as the voice of the non-Arctic states, representing their views and interests in discussions with the Arctic Council.

While no one of these policies is of overwhelming consequence, together they suggest a more significant drive to assert Chinese interests in the region. As the United States assumes the two-year chairmanship of the Arctic Council in 2015, it needs to begin its tenure prepared with its own strategy for the region; and at least in part, this means determining what matters and what doesn’t in terms of Chinese engagement in the Arctic.

First, the United States should work to ensure that the observer states, such as China, do not politicize the Arctic Council: allowing China to become the spokesperson for most of the rest of the world that does not have a direct stake in the Arctic, for example, would be a mistake. Reinforcing the position of observer status as necessarily recognizing the Arctic states’ sovereignty and jurisdiction in the Arctic, as well as the law of the sea, is a good place to start. China has already refused to recognize the jurisdiction of a United Nations tribunal on the UN Convention on the Law of the Sea in a dispute with the Philippines in the South China Sea.

Second, the United States should help ensure that Chinese investment in the region is encouraged but also managed in a sustainable manner. The Chinese are already aware that their investment will be viewed with some suspicion: as Chinese scholar Jia Xiudong has noted, “China’s interest and involvement in the Arctic are more for having options in case of emergency rather than resource plundering.” Moreover, while Greenland is resource rich but population poor, the country’s deputy foreign minister has taken great pains to reassure the world of its political capacity: “We are, in mining terms, a frontier country. But we are not a frontier country like frontier countries in Africa or South America. …We have evolved over 300 years a solid legal framework, a well-educated population, rules, democratic institutions and a strong society.” If useful to Greenland, the United States–as an Extractive Industries Transparency Initiative candidate country–could use its leadership of the Arctic Council to offer assistance to ensure that Greenland has the tools necessary to protect its environment as multinationals from around the world seek to exploit its resources.

Third, U.S. secretary of state John Kerry has legitimate credentials as an international voice on climate change. Chairmanship of the Arctic Council offers a unique opportunity to link the changing Arctic to the need for the United States and China to do more to address the challenge of climate change. Research in the Arctic should be a cooperative and collaborative effort among the interested parties and should not become yet another arena for competition between the two countries.

China has begun the process of engaging in the Arctic through research, investment, and diplomacy. For now it has only dipped its toe in the Arctic waters, but it is ready to plunge in. The rest of the world needs to be prepared.

Post a Comment 2 Comments

  • Posted by blinded1

    “First, the United States should work to ensure that the observer states, such as China, do not politicize the Arctic Council: allowing China to become the spokesperson for most of the rest of the world that does not have a direct stake in the Arctic, for example, would be a mistake.”

    Isn’t it quite laughable for the author to suggest this as the entire article is clearly politicizing the Arctic issue against China? The formal members of the Arctic Council have territories in the Arctic region, but neither anyone nor all combined own the Arctic Ocean of which most are international water. Good luck for the author to assume the Chairmanship to be held by US would allow it to impose its geopolitical agenda upon the council and the entire world.

  • Posted by Jonathan Gilligan

    So long as the US refuses to ratify UNCLOS, it will probably be difficult to insist that China accede to it.

    How can Secretary Kerry credibly criticize China for refusing to accept the jurisdiction of the International Tribunal on the Law of the Sea when the US rejects that jurisdiction too?

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