China’s Arctic Ambitions

China’s appetite for raw materials has become a source of concern from Afghanistan and Mongolia to Peru and Zambia. Now, these tensions appear to have spread to Greenland, where the prospect of Chinese encroachment reportedly helped topple the government in an election held this week. Mining is viewed favorably by Greenlanders keen to reduce their dependence on Denmark, but the 57,000-strong population is wary of a sudden influx of foreign workers. From Terry Macalister at The Guardian:

The Siumut party in Greenland, led by Aleqa Hammond, has just won 42% of the vote, allowing it to form a coalition government in place of the current ruling party led by Kleist.

[…] Hammond, 47, who was educated in Canada and brought up with traditional skills such as curing seal skins, said she would take a more critical look at Chinese mining investments in Greenland. She also pledged to increase royalties on miners and ensure they talked through staffing plans with trade unions.

“We are welcoming companies and countries that are interested in investing in Greenland,” she said in her first interview since the election. “At the same time we have to be aware of the consequences as a people. Greenland should work with countries that have the same values as we have, on how human rights should be respected. We are not giving up our values for investors’ sake.”

The election result may be a short-term setback in a long-term game, however. From Reuters:

When asked about how much Greenland could make in revenues from oil, Greenland’s [now ousted] mining and petroleum minister Ove Karl Berthelsen replied, “Oil? We have to find it first.”

“People say mining has almost started,” Finance Minister Maliina Abelsen told Reuters. “It is a lot more difficult than that. This is not the best investment climate for finance. I worry expectations may be too high.”

[…] That said, Greenland’s long-term promise remains alluring.

[…] Damien Degeorges, founder of the Arctic Policy and Economic Forum, say few countries could afford to be complacent.

“Greenland is a long-term strategy,” Degeorges said. “Like the Arctic, it will not be some 10-year fashion that will go away. You cannot take the risk of not being there.”

Another sign of China’s growing Arctic presence came this week with the news that the country’s first commercial voyage through the northeast passage over Eurasia is expected later in the year. This will follow in the wake of the Chinese icebreaker Xuelong (Snow Dragon) and 45 other vessels which made the trip in 2012. From Alister Doyle at Reuters:

For China, the world’s No. 2 economy after the United States, the route would save time and money. The distance from Shanghai to Hamburg is 2,800 nautical miles (5,185 kms) shorter via the Arctic than via the Suez Canal, Yang said.

[…] Yang showed delegates at a conference about the Arctic in Oslo organised by The Economist magazine longer-term scenarios under which between five and 15 percent of China’s international trade, mostly container traffic, would use the route by 2020.

[…] “We see a potential there but it will not be the new Suez Canal,” said Christian Bonfils, managing director of Denmark-based Nordic Bulk Carriers which sent 10 ships through the route in 2012 carrying products such as iron ore.

“You will not see a boom in the construction of ice-class vessels – the season is too short,” he said of a shipping season that lasts from about July to November, referring to ships needing specially hardened hulls.

See more on prospects for Arctic shipping at chinadialogue and Foreign Policy.

Greenland’s voters are not the only ones perturbed by the possible side-effects of a gold rush in the warming Arctic. At The New York Times this week, the University of California’s Paul Arthur Berkman expressed concern that competition over newly accessible resources might get out of hand:

Several countries, along with corporations like ExxonMobil and Royal Dutch Shell, are preparing to exploit the region’s enormous oil and natural gas reserves. New shipping routes will compete with the Panama and Suez Canals. Vast fisheries are being opened to commercial harvesting, without regulation. Coastal areas that are home to indigenous communities are eroding into the sea. China and the European Union are among non-Arctic governments rushing to assert their interests in the region. Some states have increased military personnel and equipment there.

The most fundamental challenge for the Arctic states is to promote cooperation and prevent conflict. Both are essential, but a forum for achieving those goals does not yet exist.

The closest such forum to date is the Arctic Council, comprising Canada, Denmark (representing Greenland), Finland, Iceland, Norway, Russia, Sweden, and the United States. But the council concerns itself with economic and environmental issues, not security. China, like the E.U., South Korea and Japan, is now pursuing a seat at the table as a permanent observer to cement its status as a “near-Arctic nation”. From Einar Benediktsson and Thomas R. Pickering at The New York Times:

Although China has not stated an official policy on the Arctic, it is not likely to support the unilateral decisions of the Arctic Council. The polar sea route is of major importance to the world’s leader in manufacturing. And China has made a major effort in recent years to acquire access to mineral and energy resources in many parts of the world. Chinese public institutes and scholars have maintained that Arctic maritime routes and seabed riches should be for the use of all mankind.

China has also begun to court Iceland to help get access to the Arctic Council. Last year, Iceland was the first stop on an official European tour by Prime Minister Wen Jiabao and a large Chinese delegation. And when the Chinese icebreaker Xuelong paid a call on Iceland, the crew was received by President Olafur Ragnar Grimsson at his residence. The colossus China and tiny Iceland, half a world apart, are now discussing a bilateral free-trade agreement.

[…] In short, China is reaching out for a position in the Arctic, beginning in Greenland, followed by support facilities in Iceland — which is not a member of the European Union and seemingly has been put out in the cold by the United States — with potential use for naval vessels patrolling the Arctic and the Northeast Polar Passage.

But a report published last November by the Stockholm International Peace Research Institute played down China’s Arctic ambitions. Tom Levitt summed up its findings at chinadialogue:

China’s primary interest, with no sovereign rights in the region, is in access to shorter shipping routes for food and resource security, but there is also a secondary objective, namely China’s quest to be seen as a major power, says the SIPRI.

[…] However, in comparison to Antarctica, the Arctic is of limited importance to Chinese officials, with just one-fifth of China’s polar resources devoted to the Arctic, says the report.

What’s more, it points to China’s uneasy relationship with Norway, an Arctic Council member and world leader in deep-sea and cold-climate drilling technology, in recent years. If the Arctic were a priority for China it would not have upheld punitive measures against Norway for more than two years, says the report.