China’s Seat at the Arctic Table: Beijing’s Strategy for the Far North

Article by Caterina Tarozzi | Illustration by Beatrice Bandiera

The strategically important Arctic region is reigniting geopolitical tensions to Cold War levels. Prompted by the consequences of global warming, new economic opportunities and mounting legal claims are making the inhospitable region a new Iron Curtain, where the energy policies and military activities of the bordering countries create a dangerous game of moves and countermoves in which the consolation prize might be international conflict. China, a self-proclaimed near-Arctic state, is already prepared to pursue its interests in the region through both scientific and economic cooperation.

The “precious continent” between global warming and new trade routes

The U.S. Geological Survey World Assessment 2000 estimated that 25% of the world’s resources lie beneath the Arctic Ocean, amounting to a staggering 375 billion barrels of crude oil and 47.3 trillion cubic feet of gas. That is far more than Saudi Arabia’s oil reserves and Qatar’s gas reserves combined, according to BP’s annual publication Statistical Review of World Energy. Crucially, more than 60% of the Arctic’s oil and gas resources are in areas that are owned or claimed by Russia–including highly valuable gas hydrates–, as well as significant mineral resources like diamonds, gold, silver, copper, iron, platinum, coal, and uranium.

Until now, the resources of the Arctic have remained inaccessible due to the presence of glaciers that made their exploitation unsustainable. Global warming, however, is drastically affecting the poles, and could soon cause exploration to become economically viable. Moreover, it could also open two new trade routes by sea: the Northwest passage between Bering and the Atlantic along the Canadian coast, and the Northeast passage between Bering and Norway along the Siberian coast. These new routes connecting Europe and Asia would be shorter than the “traditional” routes of the warm seas, significantly reducing travel times and thus changing the structure of the international transport system.

The changes taking place in the Arctic region bring about new opportunities and challenges for Arctic states and for the international community as a whole. As never before, the Arctic has become the stage for a complex set of political and economic dynamics that connect actors within and beyond the region. The great international relevance of this area of the world is due to the fact that the Arctic remains today the last great “oil well” in the world still to be developed. However, although constantly growing demand for energy tells an important side of the story, the “Arctic question” involves other sensitive aspects, including intelligence, international law, geo-strategy and trade, which did not escape China’s notice.

China’s interests in the Arctic

The main interests behind China’s desire to bolster its influence over the region are economic in nature. The Chinese government is chiefly concerned with how China can benefit from the new economic opportunities created by melting glaciers, while at the same time limiting the possible repercussions this event may have on the country’s economy. In fact, Chinese scientists want to understand how climate change will affect the country’s agriculture and, indirectly, its food security.

Trade is a significant winner of global warming in the Arctic, as Chinese interest in Iceland show. Considered as key hubs for the transport of goods to the Atlantic, both Iceland and Greenland have seen Beijing engage in important investments, bilateral free trade agreements and oversized diplomatic delegations–the Chinese Embassy in Reykjavik being by far the largest embassy ever built in Iceland.

On the other side of the Arctic, China is actively engaged in improving its relationship with Arctic Council member Russia, including from a military point of view. This emerging partnership is of primary importance and signals an intention to rebalance–if not to overturn–the relationship between NATO countries and Russia. Moreover, China-Russia relations have significant economic connotations, with the Chinese acting as a strategic investment partner in Russian energy projects in the Arctic. In fact, Russia intends to exploit the immense gas reserves located off the Iamal Peninsula by building a production station of liquefied natural gas. China, by providing the money and technology needed, becomes the first foreign investor in the titanic Russian project and provides most of the materials and infrastructure.

China’s strategy: Diplomacy as an access card for the Arctic

In recent years, the Chinese government has developed a strategy to protect its interests in the region. Beijing’s long-term goal appears to be the inclusion of non-Arctic stakeholders in the governance of the Arctic, as it would enable the country to extend its influence on the future of the region. Indeed, China argues, the challenges arising from climate change in the Arctic region are global rather than regional issues and should be addressed jointly.

In the medium-term, the Chinese government intends to strengthen its relationships with the Arctic states and secure its participation in the Arctic Council. At the same time, it claims that the area of the Arctic that lies outside the sovereign territory of other states should belong to all (as signatories to United Nations Convention on the Law of the Sea), and it campaigns for a greater consideration for the rights of non-Arctic states when decisions concerning the region are made. As part of its strategy, it strongly promotes international cooperation, international scientific expeditions, and investments that can have a positive impact on its interests in the region.

Considering China’s diplomacy over the past 30 years, it can be argued that pragmatic considerations will drive the country’s policies in the Arctic region. Thus, once the ice has melted to the point where exploration for resources will be less expensive and easily achievable, one can expect China to invest hugely in co-development projects with countries like Russia or Canada.