Why China Wants to Expand Its Arctic Footprint

9 MINS READDec 24, 2018 | 13:00 GMT
A satellite photo from NASA depicts the polar icecap.

A satellite photo from NASA depicts the polar icecap. As the Arctic Ocean's sea ice recedes, China is hoping to join the rush to extract minerals and benefit from shorter shipping times.

  • The Arctic's growing strategic importance will oblige Beijing to continue its efforts to assert itself in the region from a position of constraints.
  • Because China lacks an Arctic shore, it will rely on bilateral and multilateral cooperation, particularly with Russia and the Nordic countries, and adopt a soft approach to ensure its say in the development of the region.
  • Russia's economic quandary and standoff with the West could provide Beijing a window into the region, but such cooperation will be subject to future shifts among the United States, Russia and China.

The Arctic's formidable natural barriers have deterred most human activity for millennia. But with the ocean expected to be ice-free in summer by 2030, the Arctic is now squarely in the geopolitical spotlight, as powers near and far rush to secure their positions in an emerging competition. By some estimates, the Arctic contains 30 percent of the world's undiscovered natural gas and 13 percent of its oil reserves. What's more, the receding ice could soon provide access to minerals, fish and other resources. At the same time, potential shipping routes — including the Northern Sea route and the Northwest Passage along the Russian and Canadian coasts, respectively — will become available, along with perhaps the Transpolar Passage in the more distant future. At present, the Arctic's climate will largely hamper hydrocarbon exploration, the use of sea routes and the construction of infrastructure for many years to come, but the promise of energy and mineral riches and shorter maritime routes between Asia and Europe will ultimately drive interest in the region, creating competing demands for sovereignty, governance and right of passage.

The Big Picture

Persistent warming and changing meteorological conditions have transformed the Arctic Ocean into a more strategic region, as its diminishing icecaps open up access to natural resources and new shipping corridors. As regional powers like Russia, the United States and Canada vie for dominance in the area, the more distant China is racing to legitimize its presence wherever it can and secure its interests by expanding its access and capabilities in the region.

Entering the fray is China, albeit from a position of weakness. Unlike the five Arctic states, China's lack of a coastline on the ocean deprives it of a legal basis to articulate claims for access to the region, as well as the ability to project power alone. At the same time, the Arctic's strategic value — and the cost to China if doesn't get a slice of the pie — is simply too great for Beijing to settle for the status of a mere stakeholder, like South Korea and Japan. In the end, the growing importance of Arctic resources and sea routes, as well as the emerging military competition between Russia and the United States, obliges Beijing to sail north. But instead of projecting power outright, Beijing is carefully pursuing multilateral mechanisms and bilateral cooperation with friendly Arctic states to gain access to the area. In so doing, China might ultimately help change the strategic map of the North Pole.

A "Near-Arctic State"

While territorial disputes have created a vociferous debate over the ownership of natural resources in the South China Sea, much of the undiscovered oil and gas reserves in the Arctic are believed to lie in uncontested areas, making it possible for outside nations like China to enter the region. And although the Northern Sea route is still not a routine maritime passage, ships sailing from the northeastern Chinese port of Dalian to Rotterdam could shorten their travel time by as much as 10 days, or 5,000 nautical miles, if they opted for it rather than passing through the Strait of Malacca and then the Suez Canal. For China, the route would not only eliminate some of the country's exposure to security risks and supply disruptions associated with existing shipping lanes but also spur development in the relatively neglected and landlocked northeast provinces of Jilin and Heilongjiang.

A map showing various passages through the Arctic Ocean, as well as forecasts for the decline in sea ice.

With these interests in mind — alongside fears that it could be sidelined from the Arctic contest as a non-littoral state — Beijing has moved to assert its position where possible in the already-crowded North Pole. So far, China has taken only baby steps in the region, as high transit costs due to the need for ice-breaking services from Russia have prevented the route from becoming commercially viable, yet Beijing has markedly increased its efforts to establish itself in the strategic region.

Since its first research expedition to the Arctic in 1999 and its construction of the Arctic Yellow River Station on Svalbard in 2004, China has intensified its soft approach and scientific involvement in the region. It has elevated its role in climate change affairs, forged closer scientific cooperation with Nordic countries and taken further steps to join the Arctic Council as a permanent observer. Beijing is also in the process of constructing two more icebreakers, including a nuclear-powered icebreaker. Beyond that, the country has also quickened the pace of its Arctic exploration, traversing the Northwest Passage with an icebreaker and the Northern Sea route with commercial ships. Less conspicuously, Beijing has expanded its economic footprint in Nordic states from Iceland to Sweden to Russia, allowing it to leverage its influence for future expansion in the region. All of these efforts culminated in the publication of the country's first white paper on the Arctic at the beginning of 2018. Titled "The Polar Silk Road" and linked to Beijing's signature Belt and Road Initiative, the policy paper outlined the country's aspirations as a "near-Arctic state."

Camaraderie at the High Table

As with other aspects of the Belt and Road Initiative, the Polar Silk Road is more of a concept and loose framework than a clearly defined national strategy. Moreover, the ambiguity — whether intentional or not — of the self-proclaimed designation of "near-Arctic state" gives Beijing the ability to cultivate its role at its convenience. Such an identity, however, does not automatically grant China the right to access resources and sail without restrictions in the region due to its lack of legal recourse to Arctic territory and the absence of international agreements on Arctic sovereignty and right of passage. To achieve its objectives, Beijing initially sought to frame Arctic affairs as an international issue, but that strategy risks drawing suspicion from a number of littoral states, particularly Russia, thus undermining Beijing's attempts to form a closer partnership with regional states. But as Beijing has worked to nurture ties with these regional states — cooperating, for instance, with Greenland over mineral resources and attempting to gain oil exploration rights in Iceland — Russia's economic challenges and standoff with the West have provided China with a window into a relatively closed region.

As the dominant Arctic power thanks to its long coastline from the Barents Sea in the west to the Bering Sea and the Sea of Okhotsk in the east, Russia is well-placed to benefit from its position, especially as melting sea ice will allow it to sail along its northern coast. At the same time, however, the Arctic is naturally of great concern for Russia in terms of security. For this reason, Moscow traditionally has been suspicious about Beijing's increased Arctic involvement, its partnership with other states and its desire to internationalize the Arctic due to fears that China will eventually challenge its own sphere of influence. The Kremlin, for instance, has refused to permit Chinese research vessels to enter Russia's Arctic economic exclusive zone at least twice, while it also opposed Beijing's application for observer status in the Arctic Council — only relenting when it also endorsed Japan's application to the body in an apparent bid to balance China's entry. But with the decline of Russia's options as a result of its economic crisis in 2013 and Western sanctions over the Ukraine crisis in 2014, Moscow has beaten a path to Beijing's door at a time when Arctic development is becoming a greater priority.

For Moscow and Beijing alike, Arctic development is a marriage of convenience — much like their cooperation in many other theaters.

For Moscow and Beijing alike, Arctic development is a marriage of convenience — much like their cooperation in many other theaters. Whereas Beijing compensates for Moscow's lack of funding and infrastructure development capacity with its rich capital and construction expertise, Russia is satiating China with its long-desired access to resources and fewer restrictions on passage to the Northern Sea route. In line with such cooperation, Chinese entities have purchased about a 30 percent stake in Yamal LNG in a deal that could eventually meet 10-25 percent of China's total liquefied natural gas import demands. Both countries are expected to cooperate further on a new liquefied natural gas project, Arctic LNG 2, which will also boost Russia's energy exports to China. Naturally, such cooperation is also helping Moscow reorient its energy exports from the Western market to the East.

Icy Competition

But despite positive rhetoric from both Moscow and Beijing, their cooperation so far has failed to fulfill its potential, concentrating mostly on energy projects, rather than Arctic infrastructure development on ports, logistics facilities and transport links to Russia's domestic system. The reason stems partly from their misaligned priorities: While Moscow sees the Northern Sea route as both an economic and security imperative, the dearth of short-term commercial prospects, high costs and the need for massive investment have all inhibited Beijing from entering the field. Likewise, Moscow's ultimate desire for greater exclusivity in the Arctic — on everything from shipping routes to security — gives Beijing less incentive to devote itself to strengthening Russia's position in the Arctic. In other words, while Moscow is happy to have Beijing step in to help mitigate its investment deficits, it continues to harbor suspicions that China wants to chip away at Russian sovereignty in the Arctic.

Despite these competing interests, Russian-Chinese cooperation offers both powers practical benefits in their respective objectives that neither can find elsewhere. In the end, both are likely to pursue more cooperation in areas ranging from energy cooperation to infrastructure construction, technological development and efforts to shape future international law regarding the region. Such cooperation grants Beijing the territory and strategic resources to bolster its security at a time when the Arctic is becoming increasingly militarized. Nevertheless, Beijing will focus on cultivating ties with as many partners as possible due to its conflicting interests with Russia, the possibility that Moscow could look elsewhere itself if the West lifts sanctions and the prospect that Japan could also make greater forays into the region. But leaving aside all of China's commercial and scientific interests, the emergent great power competition over sea routes and resources, as well as the militarization of the Arctic, will likely compel Beijing to turn its focus toward the military front — raising the stakes in the already-crowded Arctic region.

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