The Rise (and Fall?) of the Polar Silk Road

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The Rise (and Fall?) of the Polar Silk Road

There is a sizeable gap between China’s ambitions for the PSR and its actual capabilities and accomplishments in the Arctic – and the gap has widened since Russia’s invasion of Ukraine.

The Rise (and Fall?) of the Polar Silk Road
Credit: Depositphotos

This month, the Biden administration announced it would soon name an ambassador-at-large to cover the Arctic, as part of the United States’ return to the region following the shambolic policies of the previous government. This move was described as both contributing to U.S. interests in countering Russia’s expanding military footprint in the Arctic and also to balance China and the development of the Polar Silk Road. The PSR, since being developed in 2017, has been articulated, including via a governmental White Paper published in January 2018, as the northern wing of Beijing’s Belt and Road Initiative.

During a visit to Nunavut and a meeting with Canadian Prime Minister Justin Trudeau, NATO Secretary-General Jens Stoltenberg alluded to the PSR when he highlighted Beijing as “investing tens of billions of dollars in energy, infrastructure, and research projects in the High North” as a challenge for regional security. The PSR continues to be shortlisted as a looming challenge to the “rules-based order” of the Arctic, and debates have emerged over whether the PSR is a harbinger of a closer Sino-Russian Arctic security pact.

China does continue to view the Arctic as an emerging area of political, economic and security interest, and perceives the Polar Silk Road, which includes the expansion of local economic partnerships, infrastructure development, extractive industries, (including fossil fuels), and emerging maritime shipping corridors as crucial to that end. However, in recent years the gap between Chinese preferences regarding the PSR and its actual capabilities and accomplishments has dramatically widened. The key lesson to be taken away by Arctic governments is the acknowledgement of that gap, and the limitations now facing Beijing in the region.

While the Polar Silk Road remains prominent in Chinese foreign policy, its impact on the far north is far less significant than what was originally predicted, while the Russian invasion of Ukraine has, if anything, pushed Chinese Arctic policies even further backwards.

At the October 2021 Arctic Circle conference in Reykjavík, Iceland, a presentation on the progress of the Polar Silk Road sought to explain the erosion of the initiative in the European Arctic as a geographic shift in focus from West (Europe) to East (Eurasia) in terms of interests and participants. Yet, realistically even before the economic traumas caused by the pandemic, Chinese plans for a “whole-of-Arctic” approach to building the PSR were seriously in doubt. Ultimately, Beijing could claim few regional investment successes outside of the Russian Arctic.

During the past five years, many original components of the PSR across the Arctic Ocean have been delayed or scrapped entirely, due either to shifting political winds or specific concerns by Arctic governments relating to the financial and security risks of Chinese investments. The most prominent examples of China-backed initiatives in Arctic and Arctic-adjacent regions that failed to materialize include a railway connection between northern Finland and Norway; a uranium and rare earths mining site at Kuannersuit, Greenland (as well as a long-planned iron mine on the island); liquified natural gas investment in Alaska; land acquisitions in Iceland and Norway; a gold mine purchase in Nunavut; an underwater Arctic communications conduit along the Northern Sea Route (NSR) between Asia and Europe; and a tunnel connecting Estonia and Finland.

Moscow’s invasion of Ukraine in February this year has now placed the PSR, and China’s overall Arctic policies, in an even more precarious position. While the Sino-Russian joint statement, struck on the eve of the invasion, included promises for further bilateral activities in the Arctic, including the development of shipping routes, the realities of the Ukraine conflict have resulted in a significant downgrading, on several fronts, of polar relations between the two powers. This is because Beijing has been trying, under complex circumstances, to maintain a “Goldilocks” policy toward Moscow since the start of the conflict. Beijing has refused to condemn the Ukraine invasion or to join in sanctions against the Putin regime, but also cautiously seeks to avoid being seen as too close to Russia, which would irreparably damage Sino-European relations and leave Chinese firms open to the same Western economic punishments currently being inflicted on the Russian economy.

This balancing act has manifested itself in the Arctic in the form a considerable slowdown of Sino-Russian activities in the region. This cooperation had already been affected by the pandemic, but since the Ukraine conflict China has continued to purchase Russian oil at a steady rate, while also backing away from other areas of bilateral cooperation. Work by Chinese firms on the Arctic LNG 2* project in Siberia has been affected by concerns about European Union sanctions, including the shipping of modules to Russia in relation to the project, which have also been delayed due to concerns about violation of EU sanction rules.

The Chinese shipping firm COSCO, which previously had been an enthusiastic supporter of the opening of the NSR for increased Arctic sea trade, has shown no sign of wanting its vessels to use the route this year. In addition, reports surfaced earlier this year that despite prior pledges to augment Sino-Russian scientific cooperation in the Arctic, research contacts between the two states swiftly dropped following the Ukraine invasion. Various planned joint ventures, such as the once highly touted Belkomur port and railway project in and around Arkhangelsk, remain in bureaucratic limbo.

At the same time, the “pause” in the Arctic Council since March of this year, due to the Ukraine war, has also affected an important window into northern affairs for China. Beijing, along with 12 other non-Arctic governments, is a formal observer in that organization, meaning it cannot vote but is permitted to participate in Council initiatives. The Arctic Council has been a key forum for Beijing to demonstrate its interest in being a partner for Arctic states, and now there is the question of how China’s polar interests will be affected if the Council remains bifurcated in the long term. The PSR was built on the premise that the Arctic governments would maintain a certain level of cooperation, which would allow Chinese concerns much freedom of movement. This was certainly the case when the Arctic Council was founded in the late 1990s, but the Council faced strains following the 2014 Russian annexation of Crimea before finally snapping this year.

Despite all these setbacks, there remains the tendency in some Western policy circles to assume that China’s strategies in the Arctic are omnipresent and advancing. For example, there have been frequent attempts by U.S. critics of Beijing’s Arctic policies to arbitrarily transplant the security threats facing the South China Sea to the far north, essentially arguing that as China is challenging legal norms in the former, it must inevitably be doing so in the latter. Not only does this narrative serve to handwave away the myriad geographic and political differences between the two regions, but also the legal concept of “historic waters,” which is front and center in the South China Sea dispute, yet is nowhere to be found in China’s Arctic policies, as Beijing has no territory there and is in no position to alter that reality, Polar Silk Road or not.

Moreover, as a study from earlier this year explained, Beijing’s diplomacy in the Arctic is based upon the idea that governance in that region should be further internationalized, given the importance of the Arctic to the greater global community. This was well-illustrated in a 2015 speech by a senior Chinese Foreign Ministry official, which described the rights and responsibilities of non-Arctic governments in the region, while calling for a “multi-tiered Arctic cooperation framework for win-win results.” Internationalization is precisely what Beijing does not want in the South China Sea. It is difficult then to make even a basic connection between the two waterways when seeking a pattern of revisionism in Chinese maritime security policies.

The obstacles that Beijing is now facing in developing the PSR underline the fact that the country is now far from being able to unilaterally upend Arctic governance and remains highly dependent upon Arctic governments and organizations to advance its interests there.

China is not going to be abandoning its Arctic interests, and still considers the far north to be a “new strategic frontier.” It may be premature therefore to consider the Polar Silk Road as a failed process. Nonetheless, at present it is crucial for Arctic governments to take note of the shaky trajectory of the PSR since its inception to better understand Beijing’s goals, and limitations, in the Arctic as they truly are.

*A previous version of this article mistakenly referred to the Yamal LNG project instead of the Arctic LNG 2 project.