China’s state news agency reported in late March that Greenland’s foreign minister, Vivian Motzfeldt, had highlighted deepening cooperation with China as one of her priorities in the new government. She also emphasized the potential for a free trade agreement between the two countries.
Is Greenland opening its doors to Chinese companies eager to gain a foothold on the island? In fact, Nuuk has long sought closer economic ties with foreign partners – including China. However, this has never led to an influx of Chinese investment, and Beijing’s careful approach to Greenland in recent years suggests its companies aren’t rushing in.
Greenland Approaching China Is Nothing New
Observers have highlighted the problematic timing of Motzfeldt’s statement – made just as U.S. President Donald Trump is openly threatening to take control over the island to counter alleged Chinese influence. One report noted that closer ties to China could reinforce the “security argument” for U.S. control over Greenland.
In reality, however, there is nothing particularly remarkable about Motzfeldt’s comments. They appear to have focused on trade rather than investment, and even if she meant to include the latter, her view is consistent with Nuuk’s long-standing position of being “open for business” to all.
Greenland has long welcomed stronger ties with China. Since the 2009 Self-Government Act, which granted Nuuk autonomy over its own industrial development, Greenlandic leaders have frequently traveled to China to promote the island to potential investors, including at the China Mining Conference in Tianjin. This was largely driven by the belief, at the time, that a mining boom, fueled by Chinese investment, was the most realistic path toward independence from Denmark – a goal shared by most Greenlandic parties.
No Boom After the Buzz
Despite high hopes, Greenland’s courting of Chinese investment did not lead to a China-fueled mining boom, nor to any other significant investment. While some Chinese companies have been involved in mineral exploration, no actual mining has ever taken place. In most cases, Chinese investors appear to have lost interest even before the United States began pushing back against Chinese influence in Greenland during the first Trump administration (2017-2021).
For example, the Hong Kong-based company General Nice acquired the license for an iron ore project north of Nuuk in 2015 but never developed the mine. It lost the license in 2021 due to inactivity at the site and failure to make required payments.
In 2013, the state-owned enterprise China Nonferrous (NFC) – a key player in China’s overseas resource strategy – signed a non-binding agreement with an Australian mining company to help develop a zinc project in northern Greenland. However, the partnership appears to have lost momentum after 2017.
While geopolitical factors probably played a role once U.S. investors got involved in the project in 2020, the zinc project also faced logistical and technical challenges. It looks to be no closer to production today than it was when NFC was involved, suggesting the Chinese company may have lost interest regardless.
The only remaining Chinese investment is Shenghe Resources’ stake in the Kuannersuit rare earth project in southern Greenland, but that project stalled after the reinstatement of the ban on uranium mining in 2021. While some had hoped that Greenland’s new government might ease the ban, this now appears unlikely.
Why Did Chinese Investors Lose Interest?
China’s declining interest in Greenland was likely driven by a combination of economic and geopolitical factors. Mining in Greenland is costly, largely due to the lack of existing infrastructure, which must be built from scratch for each project. The difficult shipping conditions caused by polar ice further add to the challenges for some projects. In some cases, the quality of mineral deposits is not economically competitive. From a business perspective, Chinese companies may find more attractive opportunities elsewhere.
In addition, a couple of unsuccessful Chinese offers to invest in infrastructure in Greenland led to concerns over the potential security risks with Chinese investment. In 2016, General Nice’s attempt to acquire a decommissioned Danish naval base sparked controversy. This prompted Copenhagen to intervene, blocking the sale and reasserting control over the base, amid fears it could open the door to a future Chinese military presence on the island. And a Chinese bid in 2018 to assist with the extension of airport runways in Greenland was effectively blocked by Copenhagen.
These controversies not only heightened scrutiny over Chinese investment but likely made Chinese companies reconsider their plans due to the rising political risks.
While strategic motives – such as securing a foothold in the Arctic for China’s “Polar Silk Road” – might have theoretically justified Chinese investment in mining in Greenland, such considerations were apparently never compelling enough to drive substantial investment. Even before the recent rise in political risk, Chinese investment in Greenland was extremely limited.
Chinese Companies Will Tread Carefully in Greenland
Chinese companies are generally more risk-averse than often assumed. Their evaluations of foreign investment environments place considerable weight on geopolitical risks, and in recent years, they have become increasingly attuned to the political sensitivities surrounding Greenland.
Despite Greenland’s rhetoric about closer ties, Chinese investors are aware that Denmark retains the legal authority to block investments on national security grounds – and that the United States may respond forcefully if it perceives growing Chinese influence in Greenland. This heightened risk awareness has likely contributed to Chinese companies looking for opportunities elsewhere.
For Greenland, while hopes of relying on Chinese investment may have waned in recent years due to shifting geopolitical realities and the United States reasserting its influence, trade with China remains important. China is a key export market for Greenlandic fish, a trade that benefits Greenland economically and poses no national security threat to Denmark or the United States. It is probably from this perspective we should interpret Greenland’s pursuit of closer ties with China at this point.
Beyond the Hype: Realistic Policy Responses to China’s Role in Greenland
The current security arrangement between the United States, Denmark, and Greenland – which effectively grants Copenhagen veto power over Chinese investment on security grounds and provides the U.S. with extensive military access to Greenland – has successfully prevented even a limited Chinese presence that might have otherwise emerged. If Greenland were to become independent, it would likely rely even more heavily on the United States for security, giving Washington even greater leverage to block Chinese activities than it holds today. In that context, arguments for the U.S. to assert direct control over the island make little sense.
Nonetheless, future Chinese attempts to establish a strategic presence in Greenland cannot be ruled out. In such cases, rather than pressuring or imposing decisions on Nuuk, Denmark should support Greenland by offering technical assistance in developing its own investment screening mechanism – a process that Greenland has already initiated, as noted in its new foreign policy strategy. Without infringing on Greenland’s autonomy, Copenhagen can also share intelligence on Chinese activities and offer its own risk assessments to help inform Nuuk’s decisions.