Chapter 3: The internationalisation of the Arctic
129.The interest of non-Arctic states in the region is growing, both as a locus of climate change research, and as an area of increasing economic activity and potential great power competition. The number of non-Arctic observer states has risen from four in 1998 (including the UK) to 13 as of today. This chapter looks in particular at China’s interest in the Arctic, and also considers the interests of Japan, South Korea and India in the region.
The role of China
130.The 2023 Integrated Review Refresh identified China’s deepening partnership with Russia as a development of particular concern for the UK.142 One of the areas in which there could be closer Sino-Russian co-operation is in the Arctic. At present, China’s involvement in the Russian Arctic has been focused primarily on joint ventures in the hydrocarbon sector. Russia’s leadership wishes to retain firm control over its sector of the Arctic. However, witnesses suggested that power dynamics could change as a weakened Russia turns East to meet its investment needs, providing China with increased leverage and influence in the region.143
China’s growing interest in the Arctic
131.China’s interest in the Arctic has increased over the past decade. In 2013, along with eight other countries, it became an observer state of the Arctic Council. In the same year, it unveiled the concept of the 21st Century Maritime Silk Road, the maritime counterpart to the One Belt One Road initiative, which seeks to expand Chinese investment and export markets.
132.In January 2018, China published its first Arctic policy white paper setting out its ambitions in the region, in which it described itself as a “near Arctic state”.144 The paper devotes substantial attention to the opportunities created by Arctic shipping for increased maritime activity. In the same year, the country launched its first domestically built diesel-powered icebreaker.145 Russia and China have announced the aim of establishing a “Polar silk road” connecting China with Europe via Russia’s Northern Sea Route as part of China’s wider Belt and Road development initiative. In a speech in Hobart, Australia, in 2014, China’s President Xi Jinping stated that due to “profound changes in the international system” and China’s unprecedented economic development, China would soon be “joining the ranks of the polar great powers”.146
133.Dr Gørild Heggelund of the Fridtjof Nansen Institute noted that the 2018 white paper had sparked widespread speculation regarding China’s intentions in the Arctic. In her view, the paper did not mark a substantial shift in China’s approach. Its primary function was to pull together previously articulated positions and draw a more coherent picture of China’s interests in the region.147
134.There are divergent views on China’s intentions towards the Arctic and interpretations of China’s official statements regarding the region. Dr Marc Lanteigne, Associate Professor at the University of Tromsø, noted that the notion of China as a “polar great power” (jidi qiangguo) can be understood in different ways. The term “power” could be taken as “might” and be understood to include a military aspect. However, in Dr Lanteigne’s view there is also a strong emphasis on China gaining knowledge as a relative newcomer to the region:
“The discussion about ‘polar great power’ very much reflects this knowledge gap that China has been trying to fill and this has become much more difficult in the current geostrategic situation, especially with the worsened relations between the West and Russia.”148
135.Mr Lanteigne told us that China is seeking to increase its involvement in Arctic science and research, to take advantage of expanding economic opportunities, including in resource extraction and shipping, and to establish its position as a legitimate actor in the Arctic region.149 Oliver Gordon-Brown and Ella Startt noted the strong emphasis in China’s white paper on increasing scientific research to support environmental protection.150
136.We heard that China has been very engaged in gathering data on emerging sea routes in the Arctic.151 While noting that China’s research initiatives could serve a dual civilian-military use, the RAND Corporation told us that there are benefits to co-operation with China on economic development and climate change “where this is done on and equitable basis and with appropriate safeguards for national security”.152
137.To date, China has not sought to challenge the governance structures in the Arctic. Mr Lanteigne told us:
“there has definitely been a concerted effort to avoid any activities that could look overtly like being a spoiler: challenging international law in the Arctic, challenging the Arctic Council.”153
138.However, Chinese officials have at times framed the Arctic as a space of global significance or ‘global common’, with the implication that it should have a greater role in the stewardship of its resources.154 China has the largest distance-water fishing fleet in the world and there are concerns it may start to operate in the central Arctic Ocean in the future as this becomes more accessible to shipping (see also paragraph 190).155
139.In other regions, China has tended to push back against international norms that it sees as constraining its interests. Defence analysts in Norway noted that while Russia had an incentive to maintain the current governance arrangements in the Arctic, which broadly favour its interests, the incentives for China to do so were less clear.156
Chinese interest in shipping routes
140.Shipping routes through the Arctic offer a significantly shorter distance between Chinese ports and European markets. They also potentially provide a strategic alternative for Chinese ships to avoid maritime chokepoints in the Suez Canal and the Strait of Malacca.157
141.Captain Anurag Bisen, Research Professor at the Manohar Parrikar Institute for Defence Studies and Analyses, told us that India was concerned by the strategic implications of China’s access to Arctic maritime routes:
“In so far as China is a principal adversary of India, the opening of the Northern Sea Route would mitigate China’s so-called Malacca dilemma to a large extent. It would, therefore, need a re-evaluation of the resultant strategic maritime advantage that India holds”.158
142.However, the operational challenges and cost of transit shipping through the Northern Sea Route, which runs along the northern coast of Russia, remain high (see paragraph 202). Mr Lanteigne cautioned that it was important to distinguish between “the rhetoric, the very high-level conversations between leaders, and what is actually happening, especially on a company-to-company level”.159 For example, the scale of transit shipping through the Northern Sea Route has been modest to date, not exceeding 25 vessels in any single year.160 Moreover, Chinese companies are wary of exposure to Western sanctions—in 2022 there were no transits at all through the Northern Sea Route.161 Mr Lateigne explained:
“The main shipping concern in China, COSCO, has in essence said that it is not going to be using the Northern Sea Route for the time being under current geopolitical circumstances.”162
143.China depends on close co-operation with Russia to transit the Arctic through the Northern Sea Route. Mr Lanteigne noted that China’s Arctic white paper referred not only to the Northern Sea Route, which runs along the coast of Russia, but also the central Arctic route, which at present does not exist as an established route and is largely inaccessible to shipping due to ice coverage.163 There is a long-term risk that Chinese factory trawlers could access North Atlantic and Arctic fishing grounds by going back and forth across the pole—which would have significant ecological impacts and affect local fish stocks.
Western push-back
144.Mads Qvist Frederiksen, the director of the Arctic Economic Council, told us that China’s current economic footprint in the Arctic is limited. He noted that in 2022, the RAND Corporation, a US think tank, sought to map out China’s economic role in the Arctic and concluded there was currently little Chinese investment in the region.164
145.Arctic states are paying increased attention to the potential dual-use nature of Chinese research and scientific activity in the Arctic. Experts in Norway told us that the government had “no illusions” about the dual-use potential of Chinese polar research. However, the Norwegian government noted it had robust measures in place to ensure that research centres on Svalbard established by Parties to the Svalbard Treaty were not used for other purposes.165
146.We heard that there has been a general pushback against Chinese investment by the Arctic Seven. Mr Lapsley told us that the UK’s Arctic allies are now “very attuned to” the risks posed by China’s employment of dual-use technology.166 Dr Lanteigne told us that of the many projects that China has put forward over the past five to seven years, “very few of those have come to fruition”.167 This has reflected both strategic concerns, as well as high costs and environmental risks.168
147.By contrast, China’s investment in the Russian Arctic has expanded significantly since 2014, when Western sanctions were first imposed on parts of the Russian oil and gas sector. China is the leading foreign investor in the development of major hydrocarbon projects in Russia’s Arctic. In January 2014, CNODC, a subsidiary of the China National Petroleum Corporation, became a 20% stakeholder in Yamal LNG, a giant gas field in northwest Siberia.169 In 2019, China’s CNOOC and CNODC each acquired a 10% stake in Arctic LNG 2 on the Gyda peninsula in Siberia. For the moment, Western sanctions have led the companies to suspend their involvement in the project. Nevertheless, many witnesses expected Russia’s economic isolation from the West to lead to greater Chinese involvement in the Arctic in the future. Prof Dodds also noted that it was likely there would be greater investment in the development of Russia’s Arctic energy resources by countries from the Middle East, including Saudi Arabia, Turkey and the United Arab Emirates.170
The importance of the Sino-Russian relationship
148.Several of our witnesses emphasised that China’s approach to the Arctic would be determined by how its relationship with Russia develops in the coming decades.
149.The Russia-China bilateral relationship has deepened as both countries’ relations with the West have become more adversarial. In February 2022, shortly before the start of Russia’s invasion of Ukraine, Russian President Vladimir Putin and Chinese President Xi Jinping declared that the friendship between the two states had “no limits” and there were “no ‘forbidden’ areas of co-operation”.171
150.The Sino-Russian partnership is likely to become increasingly asymmetric. Western sanctions on Russia in response to its invasion of Ukraine have increased the country’s dependence on China as a supplier of technology and finance. Captain Bisen highlighted the strengthening of the trade relationship between Russia and China:
“The trade between Russia and the share of rouble and yuan mutual commission transactions has now risen to 65% and continues to grow. The bilateral trade has grown by 30% in 2022, setting a new record of $185 billion and aiming to surpass $200 billion in 2023. This is a real cause of concern.”172
151.During a visit to Russia in March 2023, President Xi and President Putin discussed greater collaboration in the Arctic, including increased investment in hydrocarbon projects on the Yamal peninsula.173 Meetings between governors of northern Russian regions and Chinese officials and business leaders have intensified since the visit.174
152.In the view of Prof Dodds, China could in future push for a greater presence in the Russian Arctic:
“One of the ‘no limits’ for China might be that it becomes an increasingly assertive polar power, which would include activity in the Arctic. Russia then potentially has a very difficult trade-off between needing China and, at the same time, jealously guarding the Arctic zone of the Russian Federation. I would say that we need to look carefully at how that relationship develops in the coming years.”175
153.This view was echoed by Nick Childs of the International Institute for Strategic Studies, who told us that:
“The other question in those calculations and in terms of whether there is a bill to pay in Moscow for Chinese support for Russia generally over Ukraine is whether that would involve at some point a renewed request—and it has been reported that requests have been made in the past—for China to have port access and greater naval access from Russian bases in the Arctic.”176
154.We heard that at present there is no evidence of China seeking to establish a hard power presence into the Arctic. Mathieu Boulègue told us that to date China is “testing the water” with soft-security operations, such as co-operation with Russia on search and rescue and joint constabulary operations.177
155.Dr Elana Wilson Rowe of the Norwegian Institute for International Affairs noted that if Russia and China’s co-operation in the Arctic moved from the economic realm into the security realm, this would be a “game-changing moment” and this is a dynamic that must be closely tracked.178 She observed that there was at present a “very small accumulation of datapoints” of Sino-Russian security co-operation in the Arctic. For example, in September 2022 the US Coast Guard encountered Russian and Chinese military vessels in the US EEZ in the Bering Sea.179
156.Many stakeholders we spoke to on our visit to Norway and Finland drew attention to the April 2023 Russia-China memorandum of understanding on strengthening maritime law enforcement co-operation between the Chinese Coast Guard and the FSB Border Guard Service (Russia’s border guards and coastguard are under the authority of the FSB, the internal security service).180 To date, there has not been any Chinese military or coastguard activity in the European Arctic. Any Chinese military or coastguard presence in the Barents Sea would be perceived by the European Arctic states as a serious security challenge.181
157.Mr Lapsley noted that building military forces that could successfully operate in the region would represent a major challenge for China. He observed that:
“We know that they have an aspiration generally to make themselves a more powerful Arctic nation, to build their presence. Whether that translates at some point into wanting to project hard military power into the region we do not know yet, but we certainly should keep an eye on it.”182
158.China is rapidly developing its nuclear potential. The Arctic Ocean represents the shortest missile flight trajectory as well as submarine passage between China and North America.183 Dr Ash told us that by deploying ballistic missile submarines in the Arctic, China could enlarge the number of targets it could hit and could use the Arctic environment to compensate for the relatively high noise signature of its Type 094 submarines.184 Mr Lapsley suggested China could at some point seek to follow Russia in using the Arctic as a bastion for its nuclear forces, although there is currently no evidence that this has taken place.185 Cornell Overfield and Dr Joshua Tallis told us that defence strategists affiliated with the Chinese military have stressed the Arctic’s value as a haven for submarines.186
159.The UK Government sees China as an “epoch-defining challenge” to the international order. In the Arctic, however, it appears China has so far sought to work within the Arctic’s existing governance framework. That can change quickly.
160.China has shown a strong interest in contributing to polar research and environmental protection in the region. The UK should continue to engage with China on scientific research and climate change issues as they relate to the Arctic, where possible, while remaining vigilant regarding the dual civilian-military use of some research activities.
161.Concerns regarding Chinese strategic investment in the Arctic and its long-term intentions in the region are legitimate. At present, China’s economic presence in the Arctic outside Russia is small and the Arctic Seven have grown more cautious regarding the strategic implications of Chinese investment. Investment decisions are matters for the individual Arctic states to decide. There is, therefore, only a limited role for the UK to play beyond sharing relevant intelligence and working with partners to ensure there are clear alternatives to Chinese technology and financing.
162.The UK Government is correct to identify the deepening partnership between Russia and China as an area of particular concern to the UK and its allies. One region where the deepening partnership may manifest itself is the Arctic.
163.It is essential that the UK Government pays close attention to Sino-Russian collaboration in the Arctic. UK scenario planning should consider the possibility that China could in the future seek to establish a military presence in the Arctic. This would represent a significant strategic challenge to the West.
Other East Asian countries with Arctic interests
164.Like the UK, Japan and South Korea’s Arctic strategies put strong emphasis on their contribution to polar research and science diplomacy.
165.We heard from Dr Aki Tonami, Associate Professor at the University of Tsukuba, that Japan is eager to build up its involvement in Arctic research to replicate the success of science diplomacy in the Antarctic.187 Like the UK, the Korean government is eager to maintain the Arctic as an area of low tension and high co-operation.188 Dr Hyoung Chul Shin, Vice President of the Korea Polar Research Institute, told us that the major objectives of Korea’s polar activity plan included improving the mapping of the Arctic, joining international scientific efforts, environmental protection, and participating in sustainable economic development.189
166.Korea has a large shipbuilding sector and provided ice-capable vessels to a number of customers, including in Russia. Korea’s private sector has shown a clear interest in the development of Arctic maritime routes, should they become commercially viable, and Korean ships have conducted trial voyages through the Northern Sea Route. By contrast, Japanese policymakers do not currently see the development of Arctic maritime routes as important for Japan’s export economy. Nonetheless, like other East Asian states, Japan would like to “stay in the game” should transit routes become economically viable in the future.190
167.As a major energy importer, the development of Arctic resources remains important for Japan. Despite its tense relations with Russia, Japan’s Mitsui and Mitsubishi have retained a 22.5% combined stake in Russia’s Sakhalin 2 LNG project.191
168.Prof Dodds told us that the UK should strengthen its relationships with other Arctic Council observer states such as Germany, Japan and South Korea with which the UK has shared interests in the region to consolidate a “coalition of the willing and able in Arctic matters”.192 The Scott Polar Research Institute at the University of Cambridge also told us that the UK could increase its influence in the Arctic by expanding its diplomatic and strategic relations with Arctic Council Permanent Observer states in East Asia and South-East Asia.193
India—an emergent power with an Arctic strategy
169.India became an observer at the Arctic Council in 2013, the same year as China, Japan, South Korea and Singapore. It published its first public Arctic policy in 2013. India is a contracting party to the Svalbard Treaty and is the only developing country aside from China that operates a research station on Svalbard.194 Captain Anurag Bisen told us that maintaining scientific research in the Arctic was a policy priority. He told us that the pause in scientific co-operation with Russia represents a “great setback to global climate change mitigation efforts”.195
170.India’s priorities include building partnerships with all stakeholders in the region, upholding international law and the UN Convention on the Law of the Sea (UNCLOS) as it applies to the Arctic, participating actively in climate change and environmental treaty frameworks relating to the Arctic, and promoting co-operation and scientific exchange with Arctic nations.196
171.India sees the Arctic region as an important future source of energy and resources and its co-operation with Russia in the development and export of hydrocarbons has grown rapidly. Captain Bisen noted that Russia is India’s single largest destination for foreign investment in the hydrocarbon sector.197
172.We heard that, like the Arctic Seven, India is concerned about Russia’s deepening relationship with China, including in the Arctic and it has an interest in preventing a strong Sino-Russian partnership.198 Captain Bisen explained:
“The Arctic presents India with a very complex set of opportunities as well as challenges. I am saying so because two of India’s closest strategic partners are Arctic nations—Russia and the United States—as is India’s principal adversary, China. All three of them are locked in a strategic contest. It is a complex situation for India.”199
173.India is keen to develop and extend a north-south transport corridor in collaboration with Russia and Iran (and others) to rival China’s Polar Silk Road. The corridor spans 7,200 kilometres through a network of roads, ships and railways running from Mumbai to St Petersburg via the Caspian Sea, with a potential extension to the Arctic. Nima Khorrami, a Research Associate at The Arctic Institute, explained that India’s interest in the corridor was motivated “by both strategic and status/prestige competition between the two Asian giants”.200
174.As a non-Arctic state, the UK’s influence in the Arctic depends on strong diplomacy and coalition-building, and it should seek to expand co-operation with other observer states on the Arctic Council on matters of shared interest. However, it should do this in a way that does not undermine existing governance structures. In particular, the notion of the primacy of the Arctic states in Arctic governance should be maintained.
142 Cabinet Office, Integrated Review Refresh 2023: Responding to a more contested and volatile world (13 March 2023), p 30: https://www.gov.uk/government/publications/integrated-review-refresh-2023-responding-to-a-more-contested-and-volatile-world [accessed 1 November 2023]. The Integrated Review Refresh 2023 updated the UK Government’s security, defence, development and foreign policy priorities to reflect changes in the global context since the Integrated Review 2021.
144 The State Council Information Office of the People’s Republic of China, China’s Arctic Policy (26 January 2018): https://english.www.gov.cn/archive/white_paper/2018/01/26/content_281476026660336.htm [accessed 1 November 2023]
145 ‘China Launches Domestically-Built “Xue Long 2” Icebreaker’, High North News (11 September 2018): https://www.highnorthnews.com/en/china-launches-domestically-built-xue-long-2-icebreaker [accessed 1 November 2023]
146 Anne Marie Brady, China as a Polar Great Power (Cambridge: Cambridge University Press, 2017), pp 1–2
149 Ibid.
155 ‘How China Targets the Global Fish Supply’, The New York Times (26 September 2022): https://www.nytimes.com/interactive/2022/09/26/world/asia/china-fishing-south-america.html [accessed 1 November 2023]
156 International Relations and Defence Committee, ‘Arctic Inquiry: Norway and Finland visit 4–8 September’, September 2023: https://committees.parliament.uk/publications/41558/documents/204655/default/
161 Written evidence from the Tony Blair Institute for Global Change (ARC0013). While Chinese vessels have not used the Northern Sea Route since 2022, Russia had relied on one ice-class tanker to deliver Russian oil to China. This August, it granted permission for two unreinforced Russian tankers to navigate the route. See also paragraph 201 in this report.
164 Q 76 (Mads Qvist Frederiksen) and RAND Corporation, China’s Strategy and Activities in the Arctic (December 2022), p 17: https://www.rand.org/pubs/research_reports/RRA1282-1-v2.html [accessed 1 November 2023]
165 International Relations and Defence Committee, ‘Arctic Inquiry: Norway and Finland visit 4–8 September’, September 2023: https://committees.parliament.uk/publications/41558/documents/204655/default/
168 Ibid.
169 The current shareholders are Novatek (50.1%), Total (20%), CNPC (20%), and Silk Road Fund (9.9%), see: Yamal LNG, About the Project (2015): http://yamallng.ru/en/project/about/ [accessed 1 November 2023].
171 Administration of the President of the Russian Federation, Joint Statement of the Russian Federation and the People’s Republic of China on the International Relations Entering a New Era and the Global Sustainable Development (4 February 2022): http://en.kremlin.ru/supplement/5770 [accessed 1 November 2023]
173 Ibid.
174 ‘Russian Arctic regions strengthen bonds with Beijing’, The Barents Observer (20 September 2023): https://thebarentsobserver.com/en/arctic/2023/09/russian-arctic-regions-strengthen-bonds-beijing [accessed 1 November 2023]
179 Q 70 (Dr Elana Wilson Rowe); written evidence from Prof Gisele Arruda and Dr Marko Filijović (ARC0009); Naval News, USCG Encounters Russian and Chinese Military Vessels in Bering Sea (27 September 2022): https://www.navalnews.com/naval-news/2022/09/uscg-encounters-russian-and-chinese-military-vessels-in-bering-sea/ [accessed 1 November 2023]
180 ‘FSB signs maritime security cooperation with China in Murmansk’, The Barents Observer (25 April 2023): https://thebarentsobserver.com/en/security/2023/04/fsb-signs-maritime-security-cooperation-china-murmansk [accessed 1 November 2023]
181 International Relations and Defence Committee, ‘Arctic Inquiry: Norway and Finland visit 4–8 September’, September 2023: https://committees.parliament.uk/publications/41558/documents/204655/default/