Chinese Policy in the Arctic: Sweden
Sweden and China have an unusually historical relationship. Trade between the two began in 1731, and in 1950, Sweden was the first western country to establish official diplomatic relations with the PRC. In recent years, the relationship has turned sour - Sweden decided to take swift action against Chinese involvement in national 5G infrastructure in October 2020, resulting in the decision to remove all equipment from Chinese firms by 2025. However, despite the changing nature of Sino-Sweden relations, there is one area that remains ripe for collaboration: the Arctic. The environment and sustainability remain at the core of Sweden’s Arctic policy, and China is seeking to provide the means to take these goals to the next level. But can Sino-Swedish relations recover from a shaky few years, and will Sweden want to deepen their ties with China, given the fact that the Swedish government has described China as a threat?
Approximately 15% of Sweden is located within the Arctic Circle, with the most populated northern town, Kiruna, home to 22,906 inhabitants as of 2019. Despite a small population and land mass, Sweden is committed to delivering upon the core interests of their Arctic policy, which span over six areas; international collaboration, security and stability, climate and environment, polar research, sustainable economic development and business sector interests and securing good living conditions. A significant difference between Sweden’s first and second Arctic policy document, was the move to call for a ‘stronger EU presence’, which draws on Finland’s own Arctic policy. Unlike other Arctic countries, Sweden was slower in developing their own, individual Arctic policy. However, climate change has accelerated the rate at which states need to act; in the case of Sweden, changing soil conditions and extreme weather patterns pose a significant risk. Northern Sweden hosts the Swedish Polar Research Secretariat, a body capable of glacier monitoring and permafrost studies.
Sweden maintains status as a largely neutral country, hence why the initial straining of relations between Sweden and China came as a shock to many. In 2011, the Sweden Space Corporation allowed Beijing to access its antennas in Sweden, Chile and Australia, an unprecedented move, which further projected amicable and deepening ties. The possibility for Arctic cooperation was ripe, however, this changed when Gui Minhai, a Swedish national, was forcibly taken to China and imprisoned. Sweden terminated Chinese access to the satellite, and the situation has since escalated. According to The Brookings Institution, the aftermath resulted in ‘EU officials pledging full solidarity with Sweden’, and suggests that there is a great need for Arctic states to have closer coordination in combating China’s threats of coercion.
Image 1: Map of Arctic Circle
Analysing Sino-Swedish Arctic Relations
While Sino-Swedish diplomatic relations have become rocky, Sweden and China remain close trading partners. As of 2021, China was Sweden’s 7th largest trading partner with exports valued at 67,499 million SEK (6,500 million USD). Swedish companies such as IKEA, Volvo and Ericsson have a significant presence in the Chinese market, and China mainly exports textiles, electronics and machinery to Sweden. The Swedish political climate of neutrality and stability remains attractive to Chinese investors, and in 2019, Chinese Company NavTech purchased a Swedish semiconductor company, Silex. According to an analyst at the Swedish Defence Agency, this acquisition may ‘inadvertently assist the Chinese military in modernising capabilities’ . The city of Kiruna produces 80% of Europe’s iron, and is located in the Arctic circle. LKAB - the state-owned company that extracts the ore - has also made headway on the discovery of rare earth deposits.
Rare earths are not currently mined in Europe, and the EU has depended heavily on China - a dependence they have sought to shake off. In January 2023, there was a huge rare earths discovery in Sweden, with a suspected one million tonnes in Sweden’s far north. This marks a turning point for EU-China relations, but more specifically Sweden-China relations. Sweden’s arctic territory will now be more protected than ever, and Sweden’s value as a geopolitical actor has changed. This change in tone can be seen through the request to establish a new military unit in Kiruna - the militarisation of Sweden's Arctic will strain Sino-Swedish relations, as well as China’s relationship with other Arctic states. Increasing military presence in the arctic circle will hinder China’s ‘Polar Silk Road’ efforts, and may even lead to more assertive action.
Sweden’s Arctic offers two desirable and absolutely necessary possibilities to Europe: access to space and data centres. According to Nima Khorrami, ‘if data is the new oil, then it is reasonable to characterise data centres as refineries of the future’. Sweden’s position as an ideal host for data centres puts the spotlight on the northern region once again. As Nima writes, the opportunities this would present for Sweden would be hugely beneficial, but also comes at a risk. It would make Sweden more vulnerable to cyber attacks, putting Sweden in the line of fire from China, who currently stands as the perpetrator of around 18.83% of cyber attacks globally. Furthermore, the initial satellite decoupling between China and Sweden following the escalation of tensions in 2015, came timely as Sweden now seeks to develop a space base in the Arctic. Spaceport Esrange, as it is known, will provide the EU with a new and critical ‘gateway to space’. Its position in the Arctic region only seeks to heighten the stakes; increasing geopolitical competition in the region is unlikely to be met well by China, who could in turn develop their partnership with Russia to combat the EU and the US as Arctic blocs, and as key actors in the space race.
Sweden has a long-held commitment towards sustainable development and protecting the environment. While Sweden’s Arctic economic and security initiatives may be a point of contention with China, there is most likely to be room for collaboration on climate change research and other green initiatives. Like Sweden, China is also interested in the environmental protection, social development and resource utilisation of the Arctic. However, Sweden’s environmental goals are perhaps flawed by its own economic desires - a passage through the Arctic. Sweden is interested in the Transpolar Sea Route (TSR), a ‘variable non-coastal sea-lane across the Arctic Ocean’, and the Northeast Passage (NEP). It is located outside of the Russian EEZ, however it remains difficult to access. This shortcut would allow Sweden and China to significantly shorten their trade route, and as important trade partners to one another, this would strengthen their relations. The surge in development and exploration brings challenges to all Arctic states - and raises the question of how the regional governments will protect indigenous people.
Growing Chinese Influence in the Region
China’s Arctic policy remains deliberately ambiguous - and ambitious. Following the release of their white paper in 2018, China has made it clear that their decision to identify as a ‘near-arctic state’ is here to make sure they have a seat at the table when it comes to global decision making. As we strive towards a multi-polar world, we can expect the EU to expand its security initiatives. Sweden will be an integral part of this, and as will China as it competes for global primacy. Many states are showing concern that China’s increasing economic engagement in the region may be precursor to more invasive political and strategic ambitions. The Swedish Defence Agency has made clear that it has concerns about China, so it is unlikely that we will see increasingly close Sino-Swedish bilateral ties in the arctic region.
Climate change and regional geopolitical rivalry will result in the Arctic region becoming increasingly prominent, and it will be interesting to see the direction Sweden takes. In the past, Sweden has not always sought to strengthen ties with Washington - but its fractured relationship with China and deepening importance within the EU places it at the forefront of decision making. Yoneva suggests that Sweden is ‘torn between external influences and the call of its own moral duty’ - the next decade will see the extraction of the critical minerals, the expansion of data centres and the creation of a space-base - all of which will exert an unprecedented amount of energy. Sweden will need to be ready to challenge a more assertive China in the region, while finding its own voice in light of its newly founded geostrategic importance.