Arctic is melting-some see it as a great opportunity
In 2013, Kiruna, a small city located in northern Sweden, the Arctic Council, an intergovernmental forum associating countries whose territories lie within the Arctic Circle — including Canada, Denmark, Norway, Russia, Sweden, Iceland, Finland, the United States, and indigenous communities — granted six countries observer status in the institution. This event would not have been unusual, as six other countries had already achieved this rank in previous years. However, this time was different, not only because of the number of countries granted observer status simultaneously, but principally due to the geographic distance between these nations to the Arctic region. This development was no accident; it was the result of significant efforts by one of the new observer countries — China — which had been actively seeking involvement in Arctic affairs.
Located thousands of kilometers from the Arctic Circle and separated from it by Russia, China clearly cannot be classified as an Arctic nation. Nevertheless, for over 10 years, Beijing has sought to establish itself as an "Arctic superpower". China’s success in gaining observer status in the Arctic Council — a body that theoretically lacks executive power but in practice controls much of the Arctic's shared interests — was a major diplomatic achievement. It confirmed the legitimacy of China's ambitions in the region.
But why would a country located 9,000 kilometers from the Arctic Circle be so interested in this polar desert? The reasons are numerous, and they all connect to Beijing's desire for security: military, economic, and climate security, but most importantly, security that China remains a global superpower, capable of shaping the future world order.
The forgotten document
China’s interest in the Arctic began in the 1980s, when the Arctic Centre was established in Shanghai. However, it was not until 2003 that China undertook its first scientific mission to the Arctic. The Ukrainian-built icebreaker Xue Long (Snow Dragon) traversed the Arctic on a scientific expedition, marking China’s scientific presence and inaugurating its scientific diplomacy in the region. A year later, thanks to a long-forgotten treaty, China opened the Yellow River Station, its first research facility in the Arctic, located on the Norwegian island of Svalbard.
The 1920 Svalbard Treaty assigned the island, previously known for whaling, to Norway, while granting signatory countries the right to engage in commercial and industrial activities there. At the time, France, concerned about the growing influence of the United States and the United Kingdom, invited its allies, including China — then very different from the country it is today — to sign the treaty. During Mao’s rule, China ratified many international agreements, but the Svalbard Treaty was one it did not immediately join, giving China a unique opportunity to access the Arctic region and officially begin its Arctic ventures.
Unseen motives
In 2018, due to international pressure caused by the uneasiness related to China's growing position in the Arctic after the country's invitation to the Arctic Council, Beijing released Chinese Arctic policy, a white paper acknowledging the country’s interest in the region. In the paper, China boldly declared itself a Near-Arctic state and pointed out that it is crucial for them to get involved in the region, as “global warming in recent years has accelerated the melting of ice and snow in the Arctic region”, causing the national security risk.
As in many other parts of the world, China can feel the consequences of rising sea levels with floods notoriously haunting Shanghai, the country’s economic hub which is responsible for 20% of annual GDP. (There is actually a typhoon right now, as I am writing this article from Shanghai).
According to the document, its goals are to "understand, protect, develop, and participate in the governance of the Arctic, so as to safeguard the common interests of all countries and the international community in the Arctic, and promote sustainable development of the Arctic.”
However, the most important are the things that the document does not mention. It completely omits the topic of Chinese military presence in the region, giving the international community cause for concern. When it comes to Chinese foreign policy, there is always more to it than it seems.
Knocking on the door
The Chinese government is known for investing in foreign countries, financing big projects mostly in the developing countries as part of the Belt and Road Initiative and that’s what it started doing in the Arctics.
The annexation of Crimea by Russia in 2014 opened an unexpected opportunity for China. Ostracized by the west, Russia had to agree to the entrance of Chinese investment in one of the biggest liquid gas land sides in the world — Yamal.
Experts estimate that the Arctic is estimated to conceal 13% of the world's undiscovered oil and 30% of its natural gas. These resources will be possible to collect in about 10 years. Most of the hidden gas is on Russian territory concentrated precisely in the Yamal Peninsula, and it is not odd that China wants to lay its hands on it.
China provided Russia with a loan of nearly $800 million to fund much-anticipated expansion of the Yamal project, whose goal is to exploit and bring to market great gas reserves in the Yamal Peninsula. Moreover, Chinese companies overtook 40% of the execution of the project. Although Russia is a huge country, it is often forgotten that it has a relatively small economy. If Kremlin wanted the harbor to develop, it had no choice but to let the yuan in. The Russians might have signed a deal with the devil, and now there is no way back. Particularly following the Russian aggression on Ukraine in 2022,Russian dependance on China is growing, an opportunity Beijing will not overlook.
Last year was key for China and Russia relations, as two countries signed a memorandum of understanding on maritime law enforcement cooperation, strengthening their cooperation in the Arctic. The document highlights the countries joint efforts to combat terrorism, illegal migration, and smuggling of drugs and weapons, which likely implies military collaboration and even deeper Chinese involvement in Russia’s Arctic.
Yet, Russia is not the only country China was interested in aiding. After the 2008 financial crisis, Iceland was craving investments. Without any interest from European as well as American sides, Iceland turned their attention to Beijing. This initiated the first European free trade agreement with China and the friendship between countries, which played a crucial role in giving China the observer status at the Arctic Council. Iceland was even considering joining the BRI project, and although it did not take place due to American and EU pressure, the country has never completely closed this gate. Finnafjord, an Icelandic town, was considered as the place for the final harbour of the Polar Silk Road, as it is an ideal departure point for other European ports. The community would greatly profit from the Chinese cargo ships in the area. However, inviting China into the region raised big concerns, as at the same headland lands, built during the Cold War, NATO stations were used to detect soviet submarines. This location is not only strategically significant from an economic point, but also from a military one.
The military threat is a great concern when it comes to Chinese controlled land in the Arctic. The interesting case is of Chinese investor Huang Nubo, who, before his career in real estate, worked in a high position in the Communist Party propaganda unit. He, with help from the Chinese Embassy, tried to buy an enormous amount of land first in Norway and then in Iceland to build a „five-star resort.” Both deals were close to be finalized, however, ultimately stopped by the public fear the investment would secretly be used for military purposes.
Since the Russian aggression on Ukraine, Chinese money in the Arctic area is considered only as a threat, as NATO and its allies are worried about growing cooperation between Russia and China. Europe cannot allow China to create military strategic points on the European Arctic map. Just this summer, Norway sent a strong signal to China by blocking the sale of the last privately owned land on Svalbard due to Chinese interest, worried it might disturb the stability in the region.
Are the melting icebergs THAT bad?
Although Chinese military ambitions are mysterious, the country fails to hide its economic goals in the Arctic. Despite the official declarations, further moving climate changes might be a great economic opportunity for the Middle Kingdom, and Europe plays a crucial part in it.
According to Eurostat, in 2023, China accounted for 8.8% of the European Union's imports, making it the EU's third-largest trading partner. Additionally, China was the EU’s largest source of imports, representing 20.5% of all goods brought into the region. Since 2000, China's share of the EU's total trade—both imports and exports—has tripled. In 2022, China’s trade share was just 2% lower than that of the EU's biggest partner, the United States, which held 17%. China is an indispensable partner for Europe, and while it may not be the most important at the moment, it will undoubtedly become one in no time. However, shipping the goods between such big distances is not easy.
Nowadays, still up to 90% of goods are shipped by sea. The current route connecting Hamburg to Shanghai takes 35 days, which might be extended even by 10 days if at risk of attacks by the Houthi rebels in Yemen. The US Navy also maintains control over the Southern China Sea, a situation which for China is obviously less than ideal. However, the melting ice cap will create a new, shorter transportation route.
There are few combinations of this route but the safest and most promising runs along the Russian shore. The Polar Silk Road, as named by the Chinese, would be 40% shorter than the current one, connecting Hamburg with Shanghai in just 18 days. This presents a great economic opportunity for both China and Europe, and China will ensure that they will be in complete control of it. The National People’s Congress even mentioned the route in its last five-year plan, admitting by it the importance it has to Beijing.
The creation of the Polar Silk Road is at this point borders with certainty with proceeding climate change and lack of real interest by the key global powers to stop it. The question, however, is how much of it will be under Chinese influence? Taking into consideration that its biggest ally Russia controls 53% of the region we can certainly say a considerable part. Although Europe right now acts reluctant towards China due to its relation to Russia, those feelings with time might change, when the economic benefits will surpass the moral obligation to Ukraine.
Chinese rise in the Arctic was rapid and undoubtedly creates great risks to European security and even sovereignty, despite visible future economic opportunities. It is a pity that Europe did not stop it earlier. The key thing to do right now is to look long term and stop the process of going further, as the vision of Chinese stations that could be used for military reasons so close to the old continent sounds terrifying.
On the other hand, there is the Polar Silk Road. Although for today’s international situation it seems unacceptable for Europe to trade its goods with China through Russia, the situation might change in 10 years’ time. (Especially as many European goods are traded to Russia through Kazakhstan and Turkey.)
The significantly shorter route between Europe and one of its crucial trading partners would make the trade cheaper, more efficient and in some aspects, even safer. It is hard to believe that Europe would not take advantage of such an opportunity. However, it is important to acknowledge the risk that the Polar Silk Road comes with and ensure that any future engagement is in line with European standards, and to prevent the Polar Silk Road from being used as a gateway for China’s military and strategic ambitions.
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