China's Silk Road on Ice

From The Lion King to freshly shucked oysters, everything is better on ice. Apparently the Belt and Road Initiative (BRI) is no exception. With arctic trade and development fast becoming the next big thing, China is keen to get in on the action with what Xi Jinping calls the “Silk Road on Ice”. The dawning of a “New Era” is likely to see China expand its influence around the globe, but Beijing’s plans for the Arctic are amongst its most ambitious.

China has demonstrated a keen interest in arctic developments for a few years now, becoming an observer on the Arctic Council in 2013. In the early days of its Arctic involvement, Chinese academics casually referred to China as a “near Arctic state” (近北极国家), ruffling a few feathers amongst truly arctic nations. Since then, Beijing has been keen to stress the cooperative and research orientated nature of its arctic interests.

However, as with the Belt and Road in general, Beijing’s interests are also clearly economic and political. Global warming and new technological developments are making real the dreams of passage through the frozen waterways of the Arctic, as well as pulling back the ice curtain on an area rich in energy, minerals, and fishing potential.

As a viable shipping corridor, the Northern Sea Route is very much a nascent phenomenon, with only nineteen vessels completing the run in 2016. But the potential is there, and Beijing seems intent on adding the Arctic to its rapidly diversifying portfolio of foreign investments.

It officially did just that this year, when Beijing released a policy document (in English) naming three “blue economic passages” (蓝色经济通道) envisioned by the Maritime Silk Road. Along with the all important Indian Ocean and South Pacific routes, the document names a corridor to Europe across the Arctic Ocean. The Arctic is now officially part of China’s BRI portfolio.

The Chinese icebreaker Xuelong (snow dragon) recently navigated across the central Arctic, and COSCO has now established itself as a leading arctic shipping company, with a record number of vessels this year making use of the arctic shortcut to Europe.

Beijing is also involved in a variety of bilateral enterprises with Arctic states, including oil and gas exploration with Norway and Finland. China itself has no legal claim in the relatively small Arctic Ocean, but it is keen to cultivate ties with countries that do. On his way to the Mar-a-Lago this year, Xi stopped off in Finland, and this year also saw several ministerial visits to Iceland and Nordic countries.

Whilst BRI is often considered primarily in terms of Asian regionalism, it’s important not to overlook its truly global ambitions. Beijing seems to be making inroads into Europe, not only through friendlier relations with Central European countries, but by wooing Arctic nations in the North.

The Arctic is a booming, but underpopulated economic zone that needs greater infrastructure development. As in Asia, Chinese capital might be there to provide the solution. There are also rumours that China seeks to invest in Canadian infrastructure projects abandoned by the US, fitting neatly into the narrative of the shifting US-China power dynamic.

But in the Arctic, Russia is currently China’s only officially signed up BRI partner.

Earlier this week, Xi Jinping told Russian PM Dmitry Medvedev that Russia and China should work together to create a “Silk Road on Ice”. This is the fifth time Medvedev has met with Xi in as many years, and it’s no secret that the Sino-Russian “special relationship” has blossomed in recent years. Russia is the largest recipient of Chinese finance by a long shot and has enthusiastically embraced the Belt and Road.

The first Arctic BRI project was a Chinese investment in the Yamal LNG liquified gas project, and COSCO has recently expressed interest in the port of Arkhangelsk. As Arctic expert Mia Bennett puts it, “Russian government is pinning its hopes for national economic development on the Arctic”. It is Chinese capital that might “ make these visions a reality”.

Whilst Russia suffers under sanctions from the West, China provides welcome friendship and economic relief. This pragmatism underpins the Sino-Russian partnership, but in the Arctic, as in Central Asia, there are the makings of an epic conflict of interest.

China has BRI and its “community of common destiny” concept. Russia has the EEU and Putin’s civilizational mission of Eurasianism (see the excellent book, Black Wind, White Snow). In Putin’s own words, “Greater Eurasia” is “not an abstract geopolitical arrangement, but, without exaggeration, a truly civilization-wide project”.

How these grand visions reconcile themselves is an important story that is yet to be told. In the Arctic, even more so than in Central Asia, China’s ambitions to establish influence may rub up against Russia’s prerogative in what it considers its backyard.