China’s developing strategies in the Arctic, and recent American responses, have presented a significant challenge to Denmark of late, especially in the case of Greenland. Reports that U.S. President Donald Trump was actively seeking to purchase the nation of Greenland from the Danish government, despite Greenland’s self-rule status since 2009, generated much international mockery (and memes). Yet, the underlying causes of U.S. interests in Greenland, including Chinese influence there, have not gone away.
American jitters about a growing Chinese economic presence in Greenland was said to be one major impetus for discussions about acquiring the country. These events have placed the Danish government of Prime Minister Mette Frederiksen in a difficult position, given that Copenhagen oversees Greenland’s foreign and defense policies, and has itself also been concerned about a potential Chinese challenge to Greenland’s economic sovereignty. This past week, the Danish Defense Intelligence Service (Forsvarets Efterretningstjeneste, or DDIS) further elucidated these concerns in its most recent risk assessment report [Editor’s note: in Danish], which included much discussion of China’s emerging Arctic strategies, including those with a direct impact on Greenland.
As explained by Lars Findsen, head of the DDIS, challenges to the security of the Arctic, including because of China’s growing presence there, prompted the decision to begin this year’s risk assessment with that region. In Copenhagen’s view, China has become the third player, along with Russia and the United States, in what is shaping up to be an emerging great power competition in the Arctic. The DDIS paper explained that with the linking of the Arctic to Beijing’s Belt and Road Initiative since 2017, including the country’s first Arctic White Paper published in January last year, the Arctic Ocean had been formally confirmed as a component of China’s overall strategic interests. Beijing was described in the DDIS document as seeking greater legitimacy in the region, including via bilateral partnerships and the expansion of scientific diplomacy.
Chinese interests have been engaged in five separate economic projects in Greenland, including an unsuccessful bid on an airport expansion plan initiated by the Greenlandic government, a potential zinc mine at Citronen Fjord in cooperation with Australian company Ironbark, a planned copper mining project at Wegener Halvø, an iron deposit at Isua overseen by Hong Kong firm General Nice. The fifth project, and the one farthest along in development, is the Kvanefjeld rare earth mining site overseen by Australia’s Greenland Minerals, in partnership with Shenghe Resources. So far, the most promising project is Kvanefjeld, which appears to be progressing steadily, and according to Greenland’s KNR [in Danish] news service, operations are expected to commence in 2021.
However, due to the relatively low prices of commodities, as well as pushback from Denmark and possibly the United States, not all of these projects have borne fruit. For instance, the Isua site remains on hold due to high start-up costs, and a Chinese firm withdrew from the bidding for the airport projects after Denmark, prompted by the U.S. government, intervened and promised to provide financial support. On the horizon, two Chinese companies specializing in oil and gas, namely China National Petroleum Corporation (CNPC) and the China National Offshore Oil Corporation (CNOOC) are reported to have expressed interest in these natural resources in Greenland once the bidding for onshore blocks is opened in the near future.
The Danish intelligence report stated that in addition to viewing the Arctic as a significant economic region, especially in relation to the Arctic’s, energy, raw material and shipping potential, Beijing was becoming less wary of viewing the circumpolar north in hard military terms. The paper made note of closer China-Russia cooperation in the Arctic, including in the development of the Northern Sea Route (NSR) as an Arctic shipping corridor. However, the DDIS’ findings suggested this partnership was fragile at best, given wariness in Moscow of allowing China to eventually dominate the NSR and other regional economic endeavors at Russian expense. It remains to be seen to what degree Sino-Russian relations will continue to deepen, but bilateral interests in regional economic development reached another milestone this month with the activation of the “Power of Siberia” (Сила Сибири) gas line connecting the two great powers.
Greenland is very much included in China’s Arctic partnership policies, and the DDIS paper expressed anxieties about current and future Chinese investment there, given the small size of the Greenlandic population and the close relationship between Chinese firms and the country’s central government. Moreover, the paper stated that ongoing U.S. interests in Greenland demonstrates that Washington views the island as an emerging front in the Sino-American strategic rivalry.
In Greenland, both the previous government led by Aleqa Hammond and the current administration under Prime Minister Kim Kielsen, have been welcoming of foreign economic interests, such as in the sectors of raw material exploration and extraction, including from China. Greenlandic politicians have been aware of natural resources on the island being of great interest for external partners and potential large scales of extraction projects would generate substantial incomes once operational. However, within Greenland, citizens and some local politicians have tended to be more reserved in terms of embracing mining operations, due to concerns about environmental risks as well as possible damage to Inuit traditions.
As for Denmark, its views toward the presence of China in Greenland appear to be undergoing a transition. Beijing and Copenhagen have enjoyed a smooth relationship since their diplomatic ties were established in the 1950s. Additionally, Copenhagen, along with its Nordic neighbors, was in favor of China’s application to be an observer in the Arctic Council, which was accepted in 2013. However, Greenland appears to emerging as a potential sore point between the two governments, as the DDIS report illustrates.
For China, the short- and long-term challenges in the Arctic, including Greenland economic diplomacy, are multifaceted if the country wishes to maintain and strengthen its regional presence, especially in light of increased American attention and vigilance over the past year. First, Beijing would have to continue to demonstrate a commitment to Arctic development, including via new investments, while endeavoring to ease tensions from other regional stakeholders, including Denmark and the United States. Second, it may be necessary for Beijing to adjust to the evolving political and military dynamic between Arctic states, including Greenland, especially given the sour relationship between Russia and the United States, and closer Sino-Russian ties in the far north. Finally, China may have to face greater headwinds in Greenland due to increased U.S.-Denmark strategic cooperation, which was a main topic during meetings between the two governments at the recently-concluded NATO summit in London. This does not mean, however, that Beijing will be dissuaded from widening its economic footprint in Greenland in the near-term.
Marc Lanteigne is an Associate Professor of Political Science at the University of Tromsø: The Arctic University of Norway, and is the editor of Over the Circle, a news blog dedicated to Arctic political affairs.
Mingming Shi is a project manager for the journal Icelandic Times, and a recent MA graduate in West Nordic Studies at the University of Iceland.