Days before the United States introduced its global system of tariffs, Chinese and Russian officials held a three-day summit in Moscow. Citing a “friends forever, enemies never” principle as the foundation for Sino-Russian relations, the visit appeared aimed at demonstrating alignment against the U.S. But despite claims to the contrary, that partnership has limits, especially when it comes to Arctic trade.
The Trump administration is currently engaged in an effort to reorient post-Cold War trade dynamics. But it’s not the only global power that wants to do so. The People’s Republic of China (PRC) has long sought to reduce its reliance on shipping through the Malacca Strait, which facilitates 60 percent of China’s imports. During the trade war in Trump’s first term, China increased its exports to a range of markets, including Mexico, Vietnam, and the European Union. In part, the Belt and Road Initiative (BRI) aimed to develop an on-land trade route through Central Asia and into Europe.
The Chinese desire for alternate trade routes stretches farther north. The Northern Sea Route (NSR), which passes through the Bering Strait and Arctic Ocean, was listed as a region for BRI development in 2018. It’s easy to see why. Shipping through the NSR, which is not currently navigable year round because of ice blockage, cuts the distance between Europe and China by 40 percent. Trade usage is expected to skyrocket in the coming years, with one Russian projection estimating a sevenfold increase over 2022 volume by 2030.
The NSR is an increasingly valuable trade route, especially for China. For Russia, the traditional hegemon of the Arctic, that’s a problem.
China initially engaged in scientific Arctic work, including purchasing an exploration vessel in 1994 and building a research station in Norway in 2003. That ambition quickly grew beyond science. In 2013, China gained observer status at the multilateral Arctic Council, despite Russian reluctance.
After the 2014 seizure of Crimea, Russia quickly overcame its reservations about China in the face of Western sanctions and hostility. As Yun Sun of the Stimson Center has argued, “the pre-2014 cold-shoulder by Russia forms a sharp contrast to its enthusiasm to cooperate with China on the Northern Sea Route.” In 2018, President Vladimir Putin even invited Chinese investment and collaboration in the Arctic. But that investment isn’t free. China will seek greater Arctic influence, while Russia will seek to retain its control in the region. As the NSR grows in value, that’s a potential breaking point.
Both Russia and China want to reorder global power dynamics and trade in their favor. As aligned as they are, and despite their claims of a “no-limits” partnership, China and Russia are rushing towards a collision in the Arctic. Russia cannot retain its hegemony in the NSR while China builds up its presence there.
For China, an increased presence in the Arctic would include both commercial and military dimensions. Aside from the reduced distance of the NSR when compared to the Suez, the Arctic route is also less vulnerable to disruption. The Houthi threat in the Red Sea has affected about 60 percent of Chinese trade with Europe. Trade along the NSR isn’t free from potential interference, especially since it passes by Alaska. But Arctic trade offers an alternative to the Malacca Strait. As China increasingly diversifies its trade routes, it will likely project naval power capable of protecting these shipments.
That’s a problem for Russia. The Arctic is seen as a vital part of its sphere of influence. The region is the source of 80 percent of Russia’s gas and 30 percent of its GDP. Nearly the entirety of the NSR falls inside Russia’s Exclusive Economic Zone. This allows Russia to regulate transit, require shipments to be accompanied by Russian icebreakers, and charge usage fees. It’s unlikely that China, as it securitizes and diversifies its trade routes, would abide such tight Russian control. Furthermore, Russia has become increasingly reliant on the PRC for investment, oil purchases, and advanced technology. China wields a number of potential levers that it could use to coerce more accommodating practice. If Russia allows an increased Chinese presence in the Arctic, cracking that door open could just be a prelude towards opening it all the way.
The Sino-Russian partnership is founded on the shared view that the current global order is insufficiently balanced to their interests. But upon a closer examination of those interests, it’s clear that they diverge in the Arctic. As the Northern Sea Route grows in importance, expect to see those tensions grow.