DIRECTORY
ONLINE: analysis // readbook
BULLETIN: about // accolades // current issue // schedule
RESOURCES: archives // collections // headlines


ISSN 2052-3122 (PRINT)
ISSN 2044-3811 (ONLINE)

SPONSORED SECTION

Hurst is an independently owned non-fiction publisher, specialising in books on global affairs, particularly religion, conflict, international relations and area studies in Europe, Africa and South Asia. Its sponsorship of this page makes it possible for Current Intelligence to provide readers with original analysis of current affairs from some of the sharpest minds in journalism, academia, and business.

FROM THE HURST BLOG:

HURST LINKS: website // facebook // twitter // blog

Tuesday
Mar192013

China's Ambitions in the Arctic

by Kit Dawnay

China has clearly identified the Arctic as an arena for international contest, but its policy for the region, still in its infancy, remains hostage to climate change.

--

China’s State Oceanic Administration stated in January 2013 that China would launch its sixth Arctic exploration mission later this year. 

This scientific expedition is the latest demonstration of China’s growing interest in the frozen north, and follows a flurry of visits to regional states by outgoing premier Wen Jiabao and former general secretary Hu Jintao in mid-2012.  Wen visited Iceland and Sweden in April of last year, while Hu travelled to Denmark in June.  China has also discussed the Arctic with Canada, Russia and the US.

This focus stems from a growing, if still peripheral, belief in Chinese policymaking that climate change is changing the region, transforming it from a backwater into an arena for international contest.  Beijing believes that as a major power it has a stake in the region, although quite what kind is not yet clear.

Perhaps the most overt expression of Chinese interests came in March 2010 when People’s Liberation Army Navy (PLAN) Rear Admiral Yin Zhou stated: “The Arctic belongs to all the people around the world, as no nation has sovereignty over it…China must plan an indispensable role in Arctic exploration as we have one-fifth of the world’s population.”  Yin’s somewhat extreme comments encapsulate elements within the debate underway in Beijing; some more expansive commentators have demanded that China receive a share of regional resources equivalent to its proportion of world population.  

 

Guardian of the Third Pole

The more moderate, dominant consensus claims that China is a “near Arctic state” or an “Arctic stakeholder”, and highlights three core interests in the region. The first of these is science.  China’s government established the Chinese Arctic and Antarctic Administration at the State Oceanic Administration in 1981, before opening the Shanghai based Polar Research Institute of China in 1984.  In 1994, China converted a Ukrainian built cargo ship into an icebreaker, naming it the Xue Long (Snow Dragon).  Since 1999, the Xue Long has undertaken five polar research missions, including over the summer of 2012 travelling the length of the Northern Sea Route (NSR) along the north coast of Russia from the Bering to the Barents Seas.  In 2004, China also established a small polar research facility on the Norwegian island of Svalbaard, the Huang He (Yellow River) facility.  China’s scientists are eager for information, and point to China’s role as guardian of the world’s “third pole”, meaning the Tibetan plateau, as a rationale for China’s close interest in the Arctic.

Second, is the more vexed question of Arctic resources.  The Arctic reportedly contains a significant percentage of the world’s undiscovered hydrocarbon reserves, as well as mineral resources and fishing stocks.  Chinese policymakers thus harbour a desire to access mineral deposits and fisheries, both as sources of supply and as a means to curtail reliance on the easily closed Malacca Straits. 

Arctic resources generally lie within undisputed areas (although China’s stance on existing claims is not clear).  As such, China’s businesses rely on trade incentives akin  to those they use in Latin America or Africa.  For example, Sichuan Xinye Mining Investment Company sought access to iron ore deposits in Greenland by promising major infrastructure investments.  This approach had appeal, given the relative poverty of Greenland, a dependency of Denmark with home rule and a population of only 57,000. But it added to fears of Chinese commercial penetration, provoking in turn a counter-initiative from the European Union and domestic disagreements, which in March 2013 resulted in the collapse of Greenland’s government.  China’s Sinopec has also shown interest in Iceland’s geothermal energy, working with Orca Energy, an Australian firm, in an effort to gain experience in the sector.

China’s third, and perhaps most significant, interest in the region relates to the prospect that climate change may, by 2025, free the Arctic Ocean of ice for at least a month each year.  In theory, an ice-free Arctic shipping route could shave a week off summer transit times, saving costs.  This prospective development draws comparisons to the opening of the Suez Canal in 1859 or the Panama Canal in 1914, both signal moments in the history of British and US maritime supremacy.  An ice-free route may also affect other Asian states, such as Japan, as a major trading nation, and Singapore, as an entrepot which could lose business to a northern sea route. 

 

A Nordic Singapore?

China’s plans for Iceland bear examination in this context.  In 2011 a controversial Chinese businessman, Huang Nubo, sought to purchase a huge plot of land (some 0.3% of Iceland’s land mass) on the country’s east coast, for the development of a leisure resort.  The Icelandic government subsequently rejected Huang’s request owing to rules restricting land purchases for entities outside the European Economic Area (EEA). Huang subsequently sought to lease the land instead. In December 2012 the Reykjavik government asked his company to reapply.  Huang reacted angrily, citing “prejudice” against Chinese investors.

Some commentators point to this deal as part of a long term strategy.  Beijing’s officials have discussed turning the state into a “Nordic Singapore”, developed in part with Chinese investment.  Nubo’s attempted land purchase provoked  questions because of its  sheer scale, raising the prospect of the site being developed into a deep water port serving Chinese maritime interests  by anchoring the Atlantic end of an Arctic sea route.  A slow accretion of strategic interests in Iceland would recall the development of Gwadar port in Pakistan, with China’s dominant role there only becoming overt over time.  China’s embassy in Iceland is also huge, with space for as many as 500 staff – far bigger than that of the USA, with space for 70, or that of France,with space for 20. 

Three reasons, though, suggest that fear of China’s strategic intentions in the region may be overstated.  First, sailing the northern waters will be possible only for a few months each year, with even that period hazardous owing to drifting ice.  Second, many passages of the waters, such as the Bering Straits, are shallow, rendering them unviable for the very large container ships which currently transport Chinese goods. Third, it is not clear how many years it will take for the sea ice to thaw, the timescale for an ice-free arctic inherently unpredictable.  Long range forecasting built on today’s world order is a questionable enterprise; thirty years ago, for example, projections of comparable reach would have extended the lifespan of the Soviet Union well beyond its actual historical sell-by date. 

In the interim, China is championing its interests through diplomatic means, most overtly at the Arctic Council, a regional body.  China is currently an Ad Hoc Observer, but applied to raise its status to Permanent Observer in 2009. Beijing has since worked assiduously to court members, including Denmark, Iceland and current chair Sweden.  A spat with Norway over the awarding of the Nobel Peace Prize to Chinese dissident Liu Xiaobo slowed progress; and while Norway’s foreign minister Espen Barthe Eide stated in January 2013 that Norway supported Beijing’s application (for consideration in May 2013), observers hint that Norway is hesitant about backing  China’s efforts. 

Frozen ties with Norway will probably thaw more quickly than the Arctic, however.  Denying the world’s second largest economy Permanent Observer status may prove challenging, not least as the European Union, India, Japan and Singapore all seek comparable status.  Moreover, China’s assertion that the unclaimed portions of the Arctic comprise part of mankind’s common heritage effectively present Beijing as a champion of non-Arctic states. China has clearly identified the Arctic as an arena for international contest in the years to come, one in which it has a clear stake. Beijing’s Arctic policy, however, is still very much in the cradle. How it will develop in time is not clear and remains hostage to climate change.   

--

About the Author:  Kit Dawnay is an independent political and foreign affairs analyst based in Hong Kong. He can be contacted at kit_dawnay@yahoo.com.

About Thesigers: Thesiger & Company (‘Thesigers’) is a London-based research and advisory firm, providing a wide range of services to clients whose interests and activities demand in-depth knowledge of emerging and frontier markets. Current Intelligence is Thesigers’ quarterly bulletin of current affairs, published online and in print.

Company registered in England and Wales.  Company registration number: 07234402.

VAT number: GB 135658985

Email: enquiries@thesigers.com | Web: thesigers.com

© THESIGER & COMPANY LIMITED (‘THESIGERS’) 2010-2013.  All rights reserved.  No reproduction of this essay is authorized without prior permission of the publisher. Permission to republish in whole or in part will be considered on a case-by-case basis, and may require payment of a licensing fee.