Features | Diplomacy

China, Russia, and Arctic Geopolitics

China’s burgeoning role in the Arctic could translate into direct competition with Russia.

By Ling Guo and Steven Lloyd Wilson for
China, Russia, and Arctic Geopolitics
Credit: Wikimedia Commons/ Christoper Michel

In late February, a Russian icebreaker, Kapitan Dranitsyn, successfully carried out a record supply run for the MOSAiC international research expedition representing 20 countries, including the United States, China, and Russia. As the operator of the world’s largest fleet of major icebreakers, Russia’s monopoly on icebreaker operations has largely gone unchallenged. However, China’s new icebreaker, Xuelong 2, which is due to return home in April from its maiden journey, has also been slated to assist with the MOSAiC expedition. While Russia has long enjoyed dominance in the Arctic, the expanding presence and influence of other countries — most notably, China — suggest a tidal shift is on the horizon, one that does not necessarily include the United States.

The Competing Strategic Visions of Russia and China in the Arctic

As the thawing of the Arctic has increased its geopolitical prominence and potential economic viability, Russia and China have emerged as major players in the future of the region. Their partnership on Arctic affairs, both formally and informally, represents an important component of understanding the long-term strategic balance in the Arctic.

Russia’s involvement in the region is to be expected, as one of the eight countries with territory above the Arctic Circle — and vast territory at that, with thousands of miles of coastline. Moscow’s involvement has been significant and long-lasting, with Russia advocating for the development of the Northern Sea Route along its Siberian coast as an alternative to southern routes through the Suez Canal and investing in the construction of the only icebreakers capable of operating in the Arctic Ocean.

China is a less obvious player in the Arctic, with its closest territory some 5,000 miles by sea from the Bering Strait. Even so, China has in recent years pressed for a greater role in Arctic affairs, becoming one of the 13 observer states of the Arctic Council in 2013. In 2018, China released an official white paper entitled “China’s Arctic Policy” — a step that in and of itself signals the country’s intent to play a larger role in the region — in which it outlines its priorities in the Arctic and describes itself as a “near-Arctic state.”

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The cooperation between China and Russia in recent years adds an intriguing complexity to Arctic geopolitics. Experts are divided on whether the warming of Sino-Russian relations is a true strategic alliance or merely a marriage of convenience. Proponents of the former point to the numerous agreements signed between the two countries — punctuated by the personal friendship of the two nations’ leaders — and the two sides’ common voting record on the United Nations Security Council. Skeptics reason that Russia and China often have diverging goals despite mutual interests and remain distrustful of each others’ intentions. In this paper, we focus on the long-term outlook for the Sino-Russian relationship regarding the Arctic.

The Sino-Russian State of Play in the Arctic

Russia’s involvement in the Arctic and interest in the Northern Sea Route (NSR) perhaps goes without saying, with over 24,000 miles of coastline above the Arctic circle, and a centuries-long history in the region. Russia has two primary economic interests in the Arctic. First, Russia is in a prime position to exploit the region’s oil and natural gas. Some 70 percent of Russia’s reserves are on the continental shelf off its coast (primarily in the Arctic) and its status as the world’s largest supplier of oil and natural gas makes it a leading player in exploiting further reserves in international waters.

Second, Russia is well-positioned both geographically and logistically to be a critical player in the development of shipping routes through the Arctic as retreating sea ice permanently opens those routes. This primarily represents a shipping connection between East Asia and Western Europe, with Russia operating ports and support facilities along the route.

However, it could also represent a boon to development in Siberia. Historically, Russia has bemoaned the fact that all major rivers in Siberia flow north into the Arctic Ocean rather than south to irrigate the deserts of Central Asia. During the Soviet years, mega-engineering projects using nuclear weapons to redirect the rivers were in the planning stages for decades before eventually being abandoned in the 1980s. While low levels of shipping on these rivers do exist today, aided by a fleet of river-based icebreakers, the retreat of Arctic ice in conjunction with the development of modern ports and shipping lanes to support the NSR could provide a lucrative outlet for the vast trove of undeveloped resources in Siberia.

From China’s perspective, the Arctic represents one of several regions within which it is attempting to build influence and refine its image as a global power. China has dubbed itself a “near-Arctic state,” arguing that given its relatively close proximity to the Arctic, changes in the Arctic have clear downstream impacts on China and “in turn, on its economic interests in agriculture, forestry, fishery, marine industry and other sectors.” In 2017, China introduced the Polar Silk Road, a component of its global Belt and Road Initiative, as a framework to collaborate with other parties to jointly develop Arctic shipping routes.

Beijing has taken both unilateral and cooperative measures to pursue its ambitions and legitimize its role in the Arctic. On its own, China has committed significant resources to conduct numerous scientific research expeditions. In mid-October, Beijing’s first indigenous icebreaker, Xuelong 2, set off on its maiden voyage to take part in Beijing’s 36th Antarctic expedition and will make a port call in South Africa before turning homeward. The Xuelong 2 serves as a research platform, equipped with state-of-the-art oceanographic and monitoring systems to conduct seafloor and resource surveys, which will further bolster China’s scientific diplomacy in the Arctic and Antarctic regions. China is an active participant in the Arctic Council and has invested in bilateral relationships with individual Arctic states and other stakeholders to build support for its initiatives.

In recent years, a notable increase in Sino-Russian cooperation in the Arctic has caught the attention of observers. A convergence in economic interests to develop Arctic trade is certainly a factor in their warming relationship, but does not fully explain the relatively sudden shift from competition to cooperation in this area.

The Road From Competition to Cooperation

Russia has long been particularly concerned with exercising control over a broadly defined physical sphere of influence. Classically (and perhaps overly simplistically) explained as a response to centuries of invasion, this has manifested recently with adventures from the Donbass to the Kuril Islands. A particular soft spot exists for Siberia and the Arctic territories due to Russia’s unique and long history in those regions.

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As such, Russia views China’s economic ambitions in the region with suspicion. In 2012, Russia blocked Chinese vessels from operating in the NSR, causing China to suspend its research activities during its fifth Arctic expedition. The following year, despite initial resistance from Russia, the Arctic Council granted observer status to six countries including China but also notably including Japan, which may serve as a counterweight to China.

However, Russia’s calculus shifted significantly between 2013 and 2014. A Russian company, Novatek, and China National Petroleum Corporation (CNPC) partnered on a joint venture in 2013 to fund the Yamal liquified natural gas (LNG) project, of which CNPC purchased a 20 percent stake. China expected to receive at least 3 million metric tons of LNG a year from the Yamal plant, which would be transported through the NSR to Chinese markets. In 2014, when international sanctions were enacted against Russia over its Crimea annexation, Moscow pivoted sharply toward Beijing as other partners in the Yamal project such as ExxonMobil and Eni suspended cooperation. China’s Silk Road Fund stepped in to purchase a 9.9 percent stake in the Yamal project, bringing the total stake of Chinese ownership to 29.9 percent.

Friendly ties between Russia and China have also been buoyed by the friendship between the two countries’ leaders. Since 2013, Vladimir Putin and Xi Jinping have met more than 30 times. During a visit in June, the two presidents signed more than $20 billion in deals to boost economic ties, including in the Arctic, with plans to increase the annual volume of trade between the two countries to $200 billion in the coming years.

In 2018, China introduced the Polar Silk Road, bringing it under the broader Belt and Road Initiative umbrella, as a framework to facilitate joint development of the Arctic. Beijing envisions using the NSR to diversify its shipping route options and cut down transport time between certain destinations. For Russia, the NSR represents a chance to become a major maritime trading power for the first time in history, as the melting ice caps transform its Arctic coastline into an asset. The Polar Silk Road is expected to serve as a vehicle for increased Sino-Russian investment and cooperation in building out Arctic infrastructure to support commercial transit and resource exploration along the NSR.

Future Challenges to the Relationship

Despite the undeniably closer ties between Russia and China since 2014, mutual interests are evolving that may lead to shifts in the balance of their relationship. As Yun Sun, a China expert at the Stimson Center, points out, the “Polar Silk Road” may have been coined by the Chinese, but the idea originated from a Russian invitation to jointly develop the NSR as early as 2015. Sun states that while both sides share reasons to develop the NSR, it is more of an economic priority for Russia than for China, which gives China more leverage to shape the results. Sun claims “Russia has been operating from a position of weakness on the Northern Sea Route’s development, whereas China operates from a position of strength.”

China’s appetite for energy resources will likely continue to grow, but its reliance on Russia as a supplier is not guaranteed, and indeed, Russia’s export capacity is not limitless. While warming Sino-Russian relations have created a mutually beneficial economic relationship, the imbalance in the relationship increasingly favors China. Post-2014, as Russia was desperately looking for alternative export markets to Europe, China was able to negotiate significant concessions in natural gas imports and inked an agreement that required 80 percent of equipment used in the Yamal LNG project to be produced by China. In addition, China is actively pursuing gas exploration in the South China Sea while setting the groundwork for resource exploration in the Arctic.

While many observers have highlighted other benefits of Arctic development such as shorter transit times and diversification of trade routes, China’s long-term interests are centered on the rare minerals and energy resources in the Arctic. As such, Beijing recently reorganized its administrative structure to prime its position at the forefront of Arctic exploration. In March 2018, the Chinese central government simultaneously announced the dissolution of three government organs and the creation of the Ministry of Natural Resources (MNR) to streamline management of the country’s resources.

The Chinese Arctic and Antarctic Administration (CAA) and the First Institute of Oceanography (FIO), which were both previously subordinate to the State Oceanic Administration, were realigned under the MNR. The CAA is responsible for developing national polar research strategy and policy, supporting polar research expeditions, and coordinating polar cooperation with other countries and international organizations. In a similar vein, the FIO is tasked with enhancing marine science and technology and providing support for marine resource management, security, and development. Last year, the FIO led coordination on China’s ninth Arctic expedition, in which sensors were installed throughout the Arctic to provide continuous monitoring. As resource exploration becomes more viable, competition between China and Russia to capture these resources also becomes more of a reality.

On the diplomatic front, in its Arctic policy paper and in various Arctic engagements, China often characterizes Arctic issues as global affairs; this is, no doubt, a way to legitimize its participation. However, Russia remains protective of its Arctic stakes and suspicious of non-Arctic nations’ involvement. These incongruent views will only be magnified as Arctic routes and exploration become increasingly accessible and feasible.

Cooperation in the Arctic over the last few years also does not alleviate long-standing conflict between the two countries in the Russian Far East. Part of that is long-term demographic pressures. In contrast to the hundreds of millions of Chinese living in crowded border regions, the Russian Far East is two-thirds the size of the entirety of China, but with a population of barely six million and steadily declining. This pressure has been expressed with enormous quantities of illegal immigration, and the steady sinicization of border towns like the pairing of Zabaykalsk/Manzhouli, the largest land port-of-entry in China, where Chinese firms have bought up a large proportion of the local businesses on the Russian side of the border.

In addition, the Russian Far East’s enormous reserves of natural resources are largely exploited via exportation to China. For instance, some 200 million cubic meters of lumber is exported via train every year from Russia to China, almost entirely harvested in the Far East. Similar figures can be cited for virtually any raw materials produced by Russia.

This makes the relationship between Russia and China a complex one of economic interdependence at odds with prickly nationalism. After all, while Russia’s eastern resource wealth has enormous economic value to the country, if those resources are exploited exclusively by a regional competitor, they provide little for Russia’s long-term economic prospects. Between demographic pressures and the Russian Far East’s economic reality as the fuel for China’s economy, this makes the region in the long run Russian in little more than name.

It is clear Beijing and Moscow share mutual economic interests, but their perspectives diverge markedly in the security realm. Russia considers the Arctic its backyard and has announced plans to expand its missile defense umbrella to strengthen domain awareness in the region. China, without Arctic territory, advocates for maintaining the Arctic passageways as international waters to advance economic interests, while leveraging dual-use technologies (such as satellites and scientific expeditions) to bolster security interests.

China Charting Its Own Course

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Even as Beijing and Moscow routinely boast about their high levels of cooperation, the former is taking steps to diversify its options by investing in indigenous capabilities and pursuing bilateral cooperation beyond Moscow.

Following closely on the heels of the Xuelong 2, in June 2018, Beijing commissioned plans to build its first nuclear icebreaker. The proposed 30,000-ton nuclear icebreaker would make China the only country besides Russia to operate nuclear icebreakers. It would also be China’s first nuclear-powered surface vessel, which some have reasoned could serve as a stepping stone toward the development of the Type 003 nuclear aircraft carriers currently under preliminary construction. Nuclear carriers have little direct added value in near-China waters and are ideally used for force projection abroad.

As Chinese investments and interests increase in the Arctic, China could potentially justify carrier presence much like U.S. presence in protecting existing global shipping lanes. Where China might see the opening Arctic as a reasonable arena for assertion as an emerging naval superpower, such an assertion would be deeply at odds with Russian pretension toward the Arctic Ocean as a Russian “lake” (similar to American attitudes about the North Atlantic). There is of course a certain degree of irony in the fact that the origins of China’s carrier program rest in designs and technology purchased from Russia over the last decade.

Today, Russia holds a monopoly on guided icebreaker escorts through the NSR, which allows it to set the boundaries and fees for each such transit. Russian companies have acknowledged the need to replace aging icebreakers and increase capacity to support a more navigable NSR. However, advancements in Chinese icebreaker capabilities and navigation experience in the polar regions would not only lessen its dependence on Russian icebreaker escorts, it could also provide China the opportunity to compete for market share with Russia.

In addition to bolstering indigenous technology and production, China has established close relationships with other Arctic littoral nations besides Russia to further normalize its Arctic presence. In particular, Iceland and Greenland have been the destination of significant investment by Beijing. According to a CNA report, between 2012 and 2017, Chinese investment constituted almost 6 percent of Iceland’s average gross domestic product (GDP) and 11.6 percent of Greenland’s GDP (although in Greenland’s case, much of that investment is pegged to future projects that have not yet begun operations). The degree and the targets of Chinese investment have led international observers to warn of outsized Chinese influence in these economies, as well as the potential for China to advance its Arctic interests by “acting through” Iceland and Greenland. Beijing’s expanding partnerships with Iceland, Greenland, and other Arctic states could also diminish its dependence on Russian cooperation in the long term, and strengthen China’s negotiating position to strike favorable economic deals with all of its counterparts in the Arctic.

These actions by China especially make sense in light of its economic co-optation of the Russian Far East. It is acting as an Arctic power, because with the Russian Far East increasingly an extension of the Chinese sphere of influence, in some sense China already has an Arctic coast.

Conclusion

For now, Sino-Russian cooperation in the Arctic is a practical and even mutually beneficial arrangement for both sides — a simple calculus of Russia possessing the geographic proximity and expertise to develop the NSR and China possessing the economic means to support such an endeavor. What may change the tide of their relationship in the long term are indications that China is hedging its Russian partnership with other options (e.g. indigenous icebreaker development, building bilateral relationships with other Arctic states) while maintaining its superior economic standing. Meanwhile, Russia faces an opening of Arctic routes, which it currently lacks adequate capital to shape and control.

While the short-term viability of the NSR remains a topic of debate, what is certain is China’s strategic positioning to drive polar development and stake its claim to resources beneath the surface. Furthermore, Beijing’s encroaching presence in the Russian Far East is likely to exacerbate the slow but steady divergence in interests. Given the current trajectory, China’s burgeoning role in the Arctic could translate into direct competition with Russia, a challenge the latter is unprepared to meet.

For U.S. Arctic policy, there is good and bad news. The good news is, thus far, Sino-Russian cooperation in the Arctic is largely surface-level and likely has a ceiling. The bad news is, without significantly bolstering security presence and economic investment, the United States is neither poised to protect its interests — and the interests of its Arctic allies — nor positioned to deter China’s ambitions and increasing influence.

*This article has been updated to reflect clarifications from Marc Lanteigne, an Associate Professor of Political Science at the University of Tromsø: The Arctic University of Norway.

Ling Guo is a Senior Intelligence Analyst at Booz Allen Hamilton. She earned her Bachelor of Arts in Political Science – National Security at Virginia Tech.

Dr. Steven Lloyd Wilson is an assistant professor of political science at the University of Nevada, Reno. He earned his Ph.D. in political science from the University of Wisconsin-Madison in 2016, and serves as the Project Manager of Computational Infrastructure for the Varieties of Democracy Institute at the University of Gothenburg.