March 13, 2015, by editor
China and the Arctic: Where’s the Great Power Competition?
Written by Iselin Stensdal.
The title of this blog’s special issue is ‘China and the Arctic: Site of great power competition?’, and sometimes one may get the impression that the Arctic has become a new battlefield for three of the world’s great powers. The USA and Russia are geographically closest up North. Now we may add China to the mix: China was granted permanent observer status to the Arctic Council in May 2013. The Arctic has abundant natural resources making the region desirable to control. Commentators, both in China and India have called the Arctic ‘the common heritage of the humankind’. Surely, this must all be sign of a struggle between great powers?
Nevertheless, is it really so that great powers in the Arctic seek to dominate the region and create spheres of influence? The depiction of the Arctic as characterised by rivalry among great powers is in my opinion at best imprecise and at worst ill-conceived. Since 2012 we at the Fridtjof Nansen Institute have studied, not only China’s, but also India’s, Japan’s, Singapore’s and South Korea’s interests in the Arctic, in our research project AsiArctic. Based on findings in our project, and our forthcoming edited volume Asian Countries and the Arctic Future, I do not concur with the understanding of the Arctic as a venue for a great power competition. Let us look at some important areas where rivalry amongst the great powers China, Russia, and USA could have been expected.
Contrary to popular belief, very few areas in the Arctic region are contested. In 2010, Norway and Russia solved the largest outstanding bilateral dispute by completing 40 years of negotiations for the delimitation of the Barents Sea. Russia and the US agree in practice on the boundary between the Bering Sea and the Chukchi Sea. Canada is the Arctic country with most jurisdictional disagreements, differing with the US on the Beaufort Sea and the legal status of the Northwest Passage, as well as being in dispute with Denmark over a small island in the Nares Strait. The few disputes still existing are handled in a peaceful and amicable manner. The Arctic states seeking acceptance for and extended continental shelf beyond 200 nautical miles from shore are following the procedure established by the UN Convention of the Law of the Seas (UNCLOS). Thus, for China there is no maritime area to claim in the Arctic. By accepting the terms for permanent observer status in the Arctic Council, China has affirmed its recognition of the Arctic states’ exclusive rights to resources in their economic zones and on their continental shelves. Comments on the Arctic being the common heritage of mankind have been put forward by individuals and are not an official Chinese position.
When it comes to natural resources in the Arctic, oil and gas have been most in focus. The 2009 USGS article in Science which estimated around 30% of the world’s undiscovered gas and 13% of the world’s undiscovered oil could be found in the Arctic, spurred a wave of international attention. After the Self Rule Act transferred resource management to the Greenlandic government in 2009, foreign investments have been solicited for development of Greenland’s mineral and hydrocarbon resources. However, faced with technical difficulties, the US shale gas discoveries and declining mineral prices, excitement over the anticipated Arctic resource-fest has waned. True, there have been some Chinese companies investing and acquiring licences in the Arctic: China National Petroleum Corporation (CNPC) bought a 20 % stake in the Arctic Yamal liquefied natural gas project in 2013. In 2011, China National Bluestar bought Elkem, a world-leading company for production of solargrade silicon and special alloys for the foundry industry. The acquisition included a quartzite mine in Finnmark, Arctic Norway. The Chinese investments in the Arctic are nevertheless modest in two respects: compared to the total amount of investments and licences acquired in the Arctic region, only a few are made by Chinese companies. For example, only 1 out of 56 companies holding licences on Greenland for hydrocarbons and minerals is Chinese. Moreover, China’s Arctic region investments are miniscule compared to Chinese foreign resource investments elsewhere in the world. Even for Chinese companies investments have to make sense economically. The Arctic is a region with potential, but so far not much has happened. Had there been a conscious Chinese intention to dominate the region, one could have anticipated more investments than what we have seen to date.
The Arctic is governed by several mechanisms. Professor Oran Young, a leading analyst of Arctic affairs, has called it a ‘governance mosaic’. First and foremost, each Arctic country holds jurisdiction over their respective territories. The UN Convention on the Law of the Sea (UNCLOS) regulates human activities on all oceans, including the Arctic Ocean. Other conventions of the International Maritime Organization (IMO) are also applicable to the Arctic and pertain to specific issues, such as pollution from ships. The Arctic Council, the foremost Arctic governance mechanism, was established in 1996 as a high-level forum for the eight Arctic countries. The Arctic Council principally deals with sustainable development and environmental protection in the Arctic. The main body of work is conducted in its six working groups, and their work is rather scientific than political. China, together with India, Italy, Japan, Singapore and South Korea was granted permanent observer status in 2013. The observers are encouraged to make relevant contributions primarily in the Arctic Council working groups. China is accordingly invited to add relevant knowledge to the matters handled in the working groups. In the last decade China has increased its scientific efforts in the Arctic, so this is an arena with potential for Chinese input. That China in a great power competition could make the working groups serve as a sphere of influence is less likely. China furthermore adheres to the UNCLOS and IMO conventions; there is little evidence to support that this is different in the Arctic.
Up to this point I have portrayed past and current events as non-contentious. But what about the future? China has not issued an official Arctic strategy, but in official speeches and statements, such as at the 2012 Observer and Ad-hoc Observer Meeting, its position can be found (also chapter 13). China calls itself a ‘near-Arctic’ country. It is geographically situated outside the Arctic, but borders on the Arctic vicinity. Climatic and ecological changes in the Arctic can impact on China’s environment and economy. Understanding climate change in the Arctic is important for the knowledge-building on climate change in China. So far, most of the Chinese activities in the Arctic have been scientific. Economic aspects of interest to China include energy resources and the use of sea routes for commercial purposes. Being the largest energy-consuming country, China is on the lookout for energy resources abroad. The Arctic is one, but not the most important supply-region. As for shipping, Chinese companies, as well as the consumers of these goods, could potentially benefit economically from shorter transportation -distance and -time. China is closely following developments in Arctic shipping, with this possibility in mind.
What we have seen so far is a regional power actively pursuing its interests within the established frameworks, not a great power entering the backyard of Russia and the USA, ready or seeking to dominate. The future depends not only on China, but on how the Arctic states receive and engage Beijing. If handled well, an increased Chinese interest in the Arctic could be beneficial to both Arctic and Chinese parties.