China, Russia and Arctic geopolitics

US, WASHINGTON (ORDO NEWS) — At the end of February, the Russian icebreaker Kapitan Dranitsyn made a successful voyage, delivering cargoes for the MOSAiC international polar expedition, in which representatives of 20 countries, including the USA, China and Russia, take part. Owning the world’s largest icebreaker fleet, Russia has a monopoly on icebreaking operations, which so far almost no one disputes.

However, the new Chinese icebreaker Xuelong-2 (Snow Dragon), which is due to return from its first voyage in April, will also have to assist in the MOSAiC expedition. Russia has long held a dominant position in the Arctic, but now other countries are expanding their presence and influence in this region. The most visible in this regard is China, and this situation promises serious changes, although the role of the United States in this matter may not be noticeable.

Warming in the Arctic increases the geopolitical importance and economic weight of this region, and countries such as Russia and China may play a leading role in its future. Their formal and informal partnership in Arctic affairs is an important element in understanding the long-term strategic balance of power in the Arctic.

Russia’s activity in the Arctic region is not surprising, since it is one of the eight countries with territories beyond the Arctic Circle. Moreover, Russian territories there are very extensive and include thousands of kilometers of coastline. Russia has been active in the Arctic for a long time and actively advocating the use of the Northern Sea Route (NSR) along its Siberian coast as an alternative to the southern routes through the Suez Canal. She also invests heavily in the construction of icebreakers capable of operating in the Arctic Ocean, which no other country has.

The Chinese presence in the northern latitudes is less noticeable, because the closest point to the Arctic of this country is located at a distance of 8,000 kilometers from the Bering Strait. Nevertheless, in recent years, China has claimed a more active role in Arctic affairs. In 2013, he became one of 13 observer states on the Arctic Council. Beijing has published an official document entitled “China’s Arctic Policy,” signaling its intention to play a more important role in the region. This document outlines the priorities of China in the Arctic, and China itself is called a “near-arctic state.”

Cooperation between China and Russia in recent years has added intriguing complexity to Arctic geopolitics. In the expert community there is no consensus on whether the warming in Russian-Chinese relations is a real strategic alliance, or is it just a marriage of convenience. Supporters of the first point of view point to the numerous agreements between the two countries, to the personal friendship between the leaders of Russia and China, and to their unity when voting in the UN Security Council. Skeptics argue that Russia and China often have diverging goals, despite mutual interests, and that they are distrustful of each other’s intentions. In this article, we focus on the long-term prospects of Russian-Chinese relations in the Arctic.

The balance of power and the state of affairs of Russia and China in the Arctic

Russia’s presence in the Arctic and its interest in the Northern Sea Route are quite natural. The length of its coastline beyond the Arctic Circle exceeds 38,000 kilometers, and the country’s history in the region dates back centuries. In the Arctic, Russia has two main economic interests. Firstly, it has every opportunity to search for oil and gas in this region. 70% of Russian reserves are concentrated on the continental shelf off the coast (mainly in the Arctic Ocean), and due to its status as the world’s largest oil and gas producing country, Russia is a leading player in the development of new deposits in international waters.

Secondly, Russia’s geographical location and logistics make it the most important player in laying new sea lanes in the Arctic Ocean, as the receding sea ice constantly opens up new shipping routes. This allows the development of Arctic trade shipping between East Asia and Western Europe, and Russia has ports and technical support facilities along these routes.

And it also gives impetus to the development of Siberia. Russia has long complained that all the major Siberian rivers flow into the Arctic Ocean instead of flowing south and irrigating the deserts of Central Asia. In Soviet times, gigantic projects aimed at reversing these rivers were developed over decades. But in the 1980s they were abandoned. Shipping on these rivers exists in small volumes today, which is facilitated by a fleet of river-based icebreakers. But the melting of Arctic ice, coupled with the creation of modern ports and shipping routes to provide for the NSR, may create new opportunities for the development of rich Siberian resources.

From the point of view of China, the Arctic is one of several regions where it needs to try to strengthen its influence and create the image of a world power. China calls itself a “near-arctic state” and argues that since it is located quite close to the Arctic, changes in this region will directly affect it and “in turn, its economic interests in agriculture, logging, fishing, shipbuilding and shipping, and in other industries.” In 2017, China launched the Polar Silk Road initiative, which is an integral part of its global program “One Belt – One Way” and creates a mechanism for cooperation with other countries on the joint development of shipping routes in the Arctic.

Beijing is taking unilateral and joint measures to realize its aspirations and legitimize its position in the Arctic. China independently provides significant funds for numerous research expeditions. In mid-October, the first domestic icebreaker Xuelong-2 set off on its first voyage as a member of the 36th Chinese Antarctic expedition. He will reach the port of South Africa, and then go home. This icebreaker serves as a research site with state-of-the-art oceanographic equipment and monitoring systems that allow surveying of the seabed and geotechnical work. This will give China the opportunity to step up its scientific diplomacy in the Arctic and Antarctic regions.

A noticeable increase in Russian-Chinese cooperation in the Arctic in recent years has attracted the attention of observers. The coincidence of economic interests, consisting in the development of Arctic trade, definitely plays a role in the development of these relations, but cannot fully explain why the parties quite unexpectedly switched from rivalry to cooperation in this region.

The path from competition to cooperation

Russia has long sought to exercise control over its vast sphere of influence, the borders of which are very uncertain. The classic (and perhaps overly simplistic) explanation of these actions is that this is Russia’s reaction to numerous invasions of its territory. The latest manifestations of this policy were Russian adventures from the Donbass to the Kuril Islands. In this regard, Russia has a particularly vulnerable spot – this is Siberia and the Arctic territories. Such vulnerability is explained by the unique and long history of Russia in these regions.

Russia is suspicious of China’s economic ambitions in this region. In 2012, she blocked the passage of Chinese ships along the Northern Sea Route, which is why China suspended its research activities during the fifth Arctic expedition. The following year, the Arctic Council, contrary to Russia’s initial resistance, granted observer status to six countries, including China, as well as Japan, which could be a counterbalance to China.

But from 2013 to 2014, Russian calculations have undergone significant changes. The Russian company Novatek and China National Petroleum Corporation (CNPC) in 2013 launched a partnership in a joint venture, financing the Yamal LNG project, in which CNPC acquired a 20 percent stake. China hoped that it would receive at least three million metric tons of liquefied natural gas per year from the Yamal plant, transporting it to its markets via the NSR. In 2014, international sanctions were imposed against Russia for the annexation of Crimea, and Moscow turned sharply in the direction of Beijing, as other partners in the Yamal project, such as Exxon Mobil and Eni, refused to cooperate. The Silk Road Fund of China bought another 9.9% stake in the Yamal project, bringing its ownership share to 29.9%.

Friendship between the leaders of the two countries also helps strengthen ties between Russia and China. Since 2013, Vladimir Putin and Xi Jinping met more than 30 times. During the June visit, they signed an agreement on the development of economic ties totaling more than $ 20 billion, including agreements on the Arctic. In the coming years, they plan to bring annual bilateral trade to $ 200 billion.

In 2018, China announced the Polar Silk Road initiative, including it in the large-scale program “One Belt – One Way”. This initiative has become the mechanism within which the joint development of the Arctic is carried out. Beijing plans to use the NSR to diversify shipping routes and reduce travel time between points. For the first time in history, the NSR gives Russia a chance to become a major maritime trading power, as melting ice transforms the coastline of the Arctic Ocean, turning it into a valuable asset. The Polar Silk Road should become a mechanism for increasing Russian-Chinese investment and development of cooperation in the construction of the Arctic infrastructure, designed to ensure commercial transportation and development of resources along the Northern Sea Route.

Future Challenges for Bilateral Relations

Despite the undoubted rapprochement between Russia and China after 2014, mutual interests are undergoing changes, and this can lead to certain shifts in the balance of bilateral relations. According to China expert from the Stimson Center Yun Sun, the Polar Silk Road was invented by the Chinese, but this idea arose because Russia had invited the PRC to jointly develop the NSR in 2015. Sun notes that both sides have reasons for the development of the NSR, however, for Russia, economic priorities are more important than for China, and therefore Beijing has leverage, and it can influence the outcome. Sun declares: “Russia in the development of the Northern Sea Route acts from a position of weakness, and China – from a position of strength.”

China’s demand for energy is likely to increase, but there is no guarantee that it will continue to rely on supplies from Russia, and Russia’s export opportunities are not unlimited. Although the warming in Russian-Chinese relations has led to the creation of mutually beneficial economic relations, the imbalance in these ties is increasingly benefiting China. After 2014, Russia was desperately looking for an alternative to European markets for its exports, and China in such circumstances managed to achieve significant concessions on natural gas imports. According to the terms of the signed agreement, 80% of the equipment used in the Yamal LNG project should be Chinese-made. In addition, China is actively exploring gas deposits in the South China Sea, as well as laying the foundations for the development of resources in the Arctic.

Many observers emphasize other benefits of exploring the Arctic, such as shorter shipping times and diversified trade routes. But China’s long-term interests are associated with rare minerals and energy resources of the Arctic region. Therefore, Beijing recently reorganized its administrative structures in order to gain a foothold in advance in leading positions in the development of the Arctic. In March 2018, the central government of China simultaneously announced the dissolution of three state bodies and the creation of the Ministry of Natural Resources in order to optimize the country’s resource management.

The Chinese Arctic and Antarctic Administration (AAU) and the First Institute of Oceanography (PIO), which were previously subordinate to the Ocean Authority, are subordinated to the Ministry of Natural Resources. AAU is responsible for the development of a national strategy and policy for polar research, for ensuring scientific polar expeditions, for coordinating polar cooperation with other countries and international organizations. PIO, on the other hand, has been given the task of developing marine science and marine technology, as well as providing support in the management of marine resources, in matters of security and development. Last year, PIO led the ninth Chinese Arctic expedition, during which sensors were installed throughout the Arctic to ensure continuous monitoring. As resources become more available,

On the diplomatic front, in its documents on Arctic policy and during various meetings and conferences on the Arctic, China often claims that the Arctic problems are international in nature. There is no doubt that this is how China is trying to legitimize its participation in resolving Arctic issues and its presence in the Arctic. However, Russia protects its interests in the Arctic and is suspicious of the activity of non-Arctic countries. This divergence of views will only intensify as the Arctic routes become more accessible, and the development of the Arctic becomes more real.

The cooperation in the Arctic established in recent years does not eliminate the long-standing conflict between the two countries in the Russian Far East. This is partly due to demographic problems. In the regions bordering Russia, hundreds of millions of Chinese live crowded. At the same time, only six million people live in the Russian Far East, which is equal to two thirds of all China, and its population is steadily declining. This contradiction is reflected in the rapid growth of illegal immigration and in the steady Sinization of border villages, such as Zabaikalsk, where the largest railway checkpoint on the Russian-Chinese border is located opposite the city of Manchuria. There, Chinese firms bought up a significant part of the business on the Russian side of the border.

In addition, the enormous natural resources of the Russian Far East are being developed mainly in the interests of export to China. For example, approximately 200 million cubic meters of wood are exported by rail from Russia to China annually, and almost all of this wood is from the Far East. Similar figures can be given literally for any raw materials mined in Russia.

For this reason, relations between Russia and China acquire a complex character of economic interdependence, which contradicts their warlike nationalism. In the end, the resource wealth of eastern Russia has great economic value for the country, but if these resources are used exclusively by a regional competitor, it does not bode well for Russia’s long-term economic prospects. Due to demographic problems and the economic reality that the Russian Far East is fueling the Chinese economy, in the long run this region can remain Russian only nominally.

It is clear that Moscow and Beijing have common economic interests, but in the field of security their views diverge significantly. Russia considers the Arctic to be its deep rear and has recently announced that it will expand its missile defense umbrella in order to reinforce its rights to this region. China, which has no territories in the Arctic, advocates that sea passages in high latitudes be considered international waters, as this is in line with its economic interests. At the same time, he uses dual-use technologies (satellites, scientific expeditions), thereby reinforcing his security interests.

China follows its own course

Although Beijing and Moscow often boast of a high level of bilateral cooperation, China is taking steps to expand its international ties and develop its own capabilities.

Shortly after launching the Xuelong-2 icebreaker in June 2018, Beijing approved a plan for the construction of the first nuclear-powered icebreaker. If this ship with a displacement of 30,000 tons is built, China will become the second country after Russia to operate nuclear-powered icebreakers. And it will also be China’s first surface ship with a nuclear power plant. According to some experts, this will be a transitional stage for Beijing to create the nuclear-powered aircraft carriers that are currently being designed. Such ships do not bring any benefits to China in coastal waters, but are ideally suited for the transfer of forces and means and the demonstration of military power.

As China has new interests in the Arctic, and it is increasing its investment there, Beijing may well justify the presence of its aircraft carriers there, as the United States justifies the presence of its ships by the need to protect international sea lanes. China may consider that the opening Arctic is for him an arena where it is able to establish itself as a new naval superpower. But this will directly contradict Russian claims to the Arctic Ocean, which Moscow considers to be its “lake” (America has the same attitude to the North Atlantic). There is a certain amount of irony in the fact that the Chinese aircraft carrier construction program is based on the developments and technologies acquired in the last decade from Russia.

Today, Russia has a monopoly on icebreaker escort of vessels along the Northern Sea Route, which allows it to establish borders and charge a fee for each such escort. Russian companies understand the need to replace obsolete icebreakers and increase the icebreaker fleet in order to expand navigation on the NSR. However, China’s success in building domestic icebreakers and its experience in shipping in the polar regions will not only reduce Chinese dependence on Russian icebreaking assistance, but will also enable it to fight with Russia for market share.

China is not only developing domestic technologies and domestic production. It strengthens relations with other Arctic countries, not limited to Russia, in order to make its presence in the Arctic the norm. In particular, Beijing makes major investments in Iceland and Greenland. According to a report from the Center for Naval Analysis (CNA), between 2012 and 2017, Chinese investments accounted for almost six percent of Iceland’s average GDP and 11.6% of Greenland’s GDP (although in the second case, a significant portion of these investments is tied to future projects, whose implementation has not yet begun).

The volume of Chinese investments and their places of investment cause international observers to fear that Beijing has a disproportionate impact on the economy of these regions, as well as being able to defend its interests in the Arctic, acting through Iceland and Greenland. The expansion of Beijing’s partnership with Iceland, Greenland and other Arctic countries in the future may also reduce its dependence on cooperation with Russia and strengthen China’s negotiating position, allowing it to conclude profitable economic deals with all Arctic partners.

Such actions by China are quite reasonable, especially in light of the fact that it carries out the economic takeover of the Russian Far East. It behaves like an Arctic power, because as the Russian Far East falls more and more into the Chinese sphere of influence, China in a certain sense already has an Arctic coast.

Conclusion

So far, Russian-Chinese cooperation in the Arctic is practical and mutually beneficial for both sides. There is a simple calculation. Russia is nearby, it has the knowledge and experience for the development of the Northern Sea Route; and China has the economic means to support such an undertaking. But in the future, this nature of their relationship may change, as China insures, and in addition to partnership with Russia, is developing other options (creating domestic icebreakers, establishing bilateral relations with other Arctic states), while maintaining a dominant economic position. And Russia opens up new routes in the Arctic Ocean, for the development and control of which it currently lacks funds.

The economic feasibility of the NSR for the near future raises controversy and doubts, but it can definitely be said that China takes strategic positions in order to become the main driving force in the development of the Arctic and lay claim to the resources lying in its depths. Moreover, the creeping presence of China in the Russian Far East will certainly begin to expand, and this will slowly but surely strengthen the divergence of interests. Given current trends, China’s expanding presence in the Arctic could lead to direct rivalry with Russia. And she is not able to answer this call.

There are good and bad news for American politics in the Arctic. The good news is that so far, Russian-Chinese cooperation in the Arctic is mostly superficial, and it probably has a ceiling. And the bad news is that if the United States does not significantly expand its military presence in the Arctic and does not increase economic investment there, they will not be able to protect their interests, and they will not be able to restrain Chinese ambitions and increasing influence.

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The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.