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Who Benefits From China’s Belt and Road in the Arctic?

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China Power

Who Benefits From China’s Belt and Road in the Arctic?

The Arctic implications of China’s Belt and Road Initiative merit serious consideration.

Who Benefits From China’s Belt and Road in the Arctic?
Credit: Wikimedia Commons/ AWeith

Since becoming a formal observer on the Arctic Council four years ago, China has wasted little time widening and deepening its regional credentials and diplomacy. Just before attaining observer status within the Council, government papers and studies began to habitually refer to China as a ‘near-Arctic state’, (jin beiji guojia 近北极国家), even though that state had no territory in the circumpolar north. The phrase caused some consternation among Arctic governments and other actors out of concern Beijing was seeking to ‘gate-crash’ its way into the region to benefit from the growing economic possibilities in the Arctic in the form of fossil fuels, resources and potential new shipping routes. Cognizant of this, Beijing sought to emphasize scientific diplomacy as the main driver of its polar policies, including cooperation with Arctic states as well as other non-Arctic actors in developing research projects related to local climate change and related areas.

More recently, the Chinese government became more open about expressing its interest in participating in joint economic development in the Arctic as more of the region becomes accessible due to record-breaking levels of ice erosion. With its growing economic and political power, China is in an ideal position to participate in the economic opening of the Far North, and with the ongoing development of the Belt and Road Initiative (BRI) under President Xi Jinping, debate soon appeared to what roles the Arctic might play in the emerging trade routes. However, until the middle of this year, there had been no official connection made between the BRI and China’s Arctic economic interests, with the general view being that the opening of the Arctic to trade would be a separate, and more long-term, endeavor in comparison with the sea routes comprising China’s ‘Maritime Silk Road.’

However, that viewpoint may be changing as a result of a policy paper co-released in June by China’s National Development and Reform Commission (NDRC) and the State Oceanic Administration (SOA), which provided new insights into how the Arctic may be more closely tied to Beijing’s ambitious trade policies, including the BRI. The initial structure of the BRI involved creating sea corridors through the Indian and Pacific Oceans to Africa, Europe, the Middle East and South Asia, as well as land corridors connecting China with Central Asia, Eastern Europe and Russia. The Arctic did not feature in early maps and outlines of the BRI. Yet, given closer Sino-Russian economic cooperation in Siberia and the Russian Far East, growing Chinese enthusiasm about making greater use of the Northern Sea Route (NSR) for faster cargo transits between Europe and Asia, and China’s interests in co-developing energy projects and infrastructure along the NSR, it was apparent that Beijing’s economic interests were becoming more closely aligned with Belt and Road concepts.

The NDRC/SOA paper formally linked the Arctic to the BRI when it named three specific sea routes which would be essential for China to develop a ‘blue engine’ (lanse yinqing 蓝色引擎) to promote greater economic growth, namely the Indian Ocean-to-Mediterranean sea route, the South Pacific, and the Arctic Ocean. All three of these ‘blue economic passages’ (lanse jingji tongdao蓝色经济通道) would be developed through partnerships with local governments and economies. Regarding the Arctic, the paper outlined China’s interest in working with other actors in the region to augment sea transit conditions, survey for new resources, and promote clean energy and mutual development.

Exactly how the BRI might affect the Nordic and Russian Arctic regions, and what sorts of timeframes might be involved, are open questions. China’s economic policies in the Arctic have mainly relied on an ‘ink spot’ approach involving different types of bilateral enterprises with Arctic states. These include oil and gas exploration in the North Atlantic with firms from Iceland and Norway, cooperation with Russia on the Yamal liquefied natural gas plant in Siberia, and mining projects in Greenland, including rare earth elements at Kvanefjeld, and potentially zinc in the island’s northernmost regions.

However, in the short term it appears that increased Chinese shipping along the NSR in the coming years will form the backbone of the Belt and Road process in the Arctic, which will require greater attention to co-developing transport infrastructure. One example is an emerging Sino-Russian deal to construct rail and port facilities at Arkhangelsk announced in May of this year. China has already embarked on a series of port development projects with coincide with other segments of the BRI, including in the Indian Ocean (Myanmar, Pakistan, Sri Lanka) and Piraeus in Greece. The possibility of similar projects appearing in the Arctic has caught the attention of Moscow as well as Iceland, which may benefit from future mining enterprises in next-door Greenland.

Norway is also paying attention to the possibility of greater Chinese Arctic shipping, such as via Kirkenes or Tromsø, especially considering that Sino-Norwegian relations have had to make up for much lost ground after the six-year diplomatic freeze which was finally resolved in December last year. The two governments are seeking to revive stalled free trade negotiations, and Norway’s considerable shipping concerns are especially interested in greater engagement with the Chinese market. With the NSR becoming more accessible in summer months, Beijing is hoping to be able to increase the number of its ships able to make the run in the near future (four Chinese cargo vessels were operating in the area during August of this year).

Overall Arctic shipping remains very much in the beta stage, with only nineteen vessels completing that run in 2016. Yet with summer ice levels continuing to decline, China does not want to be left behind in any future widespread economic development in the region, and while Beijing has stressed its support for laws and norms in the Arctic as well as bilateral and multilateral cooperation, there remains the underlying perception that Beijing will not accept being marginalized in the economic opening of the Arctic, and wishes to be accepted as an essential partner in the region.

At present, there is no specific white paper from the Chinese government on Arctic policy. Such a document is said to be in preparation, and hints about its contents might be found in the government document released by Beijing on its developing policies in Antarctica during the May 2017 Antarctic Treaty Consultative Meeting in Beijing. The paper outlined many avenues for scientific cooperation and environmental protection on the continent, and also noted of the potential for joint sustainable development. The role of China’s BRI in the Arctic is also shaping up to be main topic of the October 2017 Arctic Circle conference in Reykjavík. People are interested in seeing how the BRI will continue to factor into Beijing’s deepening economic engagement of the Arctic.

Marc Lanteigne is a Senior Lecturer at the Centre for Defence and Security Studies at Massey University, Auckland, New Zealand.