Chinese Policy in the Arctic: Russia
The Arctic has emerged as a strategic hotspot for China, with a host of factors driving Beijing's interest in the region. A variety of geopolitical, economic, and strategic considerations are at the heart of China's Arctic ambitions, including the country's status as a near-Arctic state, the region's vast natural resources, and the potential for the Arctic to provide a solution to China's long-standing Malacca dilemma. Yet to realise its ambitious goals in the Arctic, China needs a strong partner, and there is no better candidate for that role than Russia. As the preeminent power in the Arctic, Moscow is a key player in this complex geopolitical game, and its cooperation is essential for China's Arctic aspirations.
China's relations with the Arctic region date back to the Svalbard Treaty of 1925. Since then, China has been keen to invest in the area. The most significant development in China's Arctic engagement occurred when China established the Yellow River Station and began investing heavily in the region. Subsequently, China established a remote sensing satellite North Polar ground station in Kiruna, Sweden in 2016, and an Arctic Science Observatory in Iceland in 2018. These scientific exploration-related engagements with regional actors have allowed China to declare itself a "near-Arctic state" in its 2018 white paper on Arctic policy, augmenting its Arctic identity discourse. These policy-level developments demonstrate Beijing's far-reaching interests in the melting Arctic region.
Sino-Russian joint interests in the Arctic
For China, the development of the trade corridor between Europe and Asia through the Northern Sea Route (NSR) is a top priority in the region. The NSR stretches from Novaya Zemlya to the Bering Sea, and if completed, it would reduce the shipping distance between Europe and Asia by 40 percent. However, this development is only possible with common understanding and cooperation between Russia and China, which is being facilitated by the expanding geopolitical rivalry between the US and Russia in the region. A Congressional report published in 2019 suggests that increased Chinese and Russian activities in the Arctic will transform the region into a zone of geopolitical struggle. Such hostility creates opportunities for friends and adversaries to forge stronger ties, as seen in the growing cooperation between Russia and China in their 2017 joint statement announcing the conjunction of the Belt and Road Initiative (BRI) and the Eurasian Economic Union (EAEU) along with the development of transport via the NSR.
Image 1: Comparison of the NWP and NSR with current marine transport routes
Beijing's interest in the Arctic region is driven more by its domestic energy needs than geopolitical considerations. With energy demands increasing at an exponential rate, China sees the Arctic as a breeding ground for meeting its growing energy needs. The Arctic holds 13% of the world's undiscovered oil and 30% of the world's undiscovered gas. Therefore, by collaborating with Russia on Arctic resource excavation, China would have access to untapped resources in the region, which can meet its growing energy demands and strengthen the Sino-Russian strategic partnership with "no limit." To achieve these aspirations, Beijing is investing in the Arctic through various projects, such as holding 30% stakes in the Russian Yamal Liquefied Natural Gas (LNG) Project. As shipping routes expand in the region and Russia aims to transport 70% of the Yamal LNG eastwards, China can receive a significant amount of LNG, which will help it secure itself from an increasing fear of energy crises. Recent announcements by Gazprom to launch the East Siberian Field to export more energy to China connect China to oil and gas fields on Sakhalin Island in the Russian Far East, demonstrating China's growing influence in the Arctic region.
Geopolitical understanding with Russia
The paramount potential of Sino-Russian cooperation in the Arctic requires a close understanding of each other's geopolitical interests. Russia views the region as a "strategic resource base," and as a major actor in the region, it is sceptical of China's role. Russia is currently focused on re-establishing the modus operandi of the region by challenging the interests of other Arctic members, particularly the US. In contrast, China is expanding its economic reach in the region. China is the largest investor in mining activities in the region, has established a free trade deal with Iceland, and is among the largest investors in Russian companies operating in the Arctic. Therefore, a mutual understanding between China and Russia is vital for realising the potential of their cooperation in the Arctic.
Several interests of Russia are aligned with Chinese investment, especially foreign direct investment in Russia’s Arctic designs and the development of its Far East. This gives space to China’s ambitious economic plan, but it does not change the fact that Russia is currently the most dominant actor along the NSR route and regulates major activities along the route. Therefore, both states have their interests aligned.
So far, Russia and China have had a comprehensive and pragmatic oil and gas cooperation in the Arctic, which remains balanced. China's concerns about the Malacca dilemma keep it vigilant in securing 80% of its energy supply through the Strait, which is under US influence. Such concerns make the NSR an attractive alternative shipping route that aligns with Xi Jinping's vision to develop the Polar Silk Road. James Henderson argues that the NSR not only provides a shortcut from Yamal LNG to Asia, but also offers an alternative to the US-controlled maritime routes. He further suggests that the Russian military's modernization along the NSR has made it a "potential leverage point" in the face of growing geopolitical competition.
Russia has a sufficient number of icebreakers, experienced ice navigators, search and rescue capabilities, and other necessary infrastructure to support increased shipping traffic on the NSR. Russia aims to transform the NSR into an international shipping highway to boost economic development in its coastal cities in the north. China, which is expected to be the largest user of the route in the near future, is seen as a suitable partner for Russia in the Arctic. Furthermore, current estimates indicate that Russia holds the majority of the world's oil and gas reserves in the Arctic, accounting for between 3 and 25 percent of the global total. Due to China's increasing need for energy, it sees the Arctic region as a viable alternative to meet its future energy requirements. In contrast, Russia requires both technology and capital, as well as dependable long-term partnerships, to advance energy and infrastructure projects in the Arctic. Given the growing alignment between China and Russia, it is logical for them to cooperate in this area. The exit of Western countries from joint energy projects with Russia has created new investment opportunities that China may take advantage of to fill the investment gap.
The emerging multipolar world order
The world is going through broader shifts in global politics where the re-strategizing of Russia is jolting the European security architecture. Amid such developments, Russia has fewer cards to play with in terms of its relations with China, which is providing it with economic, political, and diplomatic cover in its constant targeting of the US-led world order. Therefore, this paves the way for a stronger ‘marriage of convenience’ in the Arctic because even if the cooperation is tilting towards a point where Russia is emerging as China’s junior because of extensive economic investment by Beijing, the Kremlin has no alternative but to comply with the existing agreed rules of their cooperating strategy against the US and its Arctic-based NATO allies.
Moreover, Russia is somewhat bound to forge economic deals with China in the context of US-backed sanctions amid the Ukraine Crisis, but this also allowed Russia to expand its strategic cooperation with its neighbour, China. Russia's understanding of the possibility of joint naval cooperation with China at an operational level along with the NSR route could provide Russia with a strong force against the US and its allies, especially Finland and Sweden, which are supporting NATO’s eastward expansion.
The United States as the Primary Geopolitical Competitor
The Russian Arctic strategy aims to boost its economy by developing previously unused energy reserves, specifically through the Yamal liquefied natural gas (LNG) and NSR projects. These initiatives strengthen Russia's economy, shorten shipping routes, and help establish its dominance in the Arctic region. Russia views the NSR as a significant global shipping route, which increases the Arctic's value in the Kremlin's geopolitical calculations. Furthermore, Russia considers the United States to be a competitor in the Arctic region. As a result, Moscow is revamping its Soviet-era bases to counter threats to its oil and gas facilities and reinforce its maritime power. Given its declining energy assets and its status as an energy superpower, Russia's foreign policy objectives include maintaining its control over the untapped energy reserves in the Arctic region. Thus, the intersection of economics and geopolitics has transformed the Arctic region into a focal point for renewed geopolitical competition among major powers.
As tensions between the United States and Russia continue to simmer, the once-unthinkable partnership between Moscow and Beijing is growing stronger. Sino-Russian cooperation has expanded beyond just economic deals like their joint involvement in Yamal LNG, as China is now recognized as a "near-Arctic state." Moscow is signalling its commitment to enhancing its already robust $110 billion trade relationship with China by expanding cooperation into the Arctic region. Major investments in infrastructure like the Belkomur railway, 1,161 km-long railway from Solikamsk to Arkhangelsk through Syktyvkar, and the Sila Sibiri pipeline represent a significant step forward in this partnership, but the onus is on Russia to follow through. With the possibility of containing US activities in the region, this collaboration holds promising prospects for both nations.
Strategic divergences persist
Although both countries share a strategic partnership, they have several differences in their approaches to the region. According to Aglaya Snetkov, Russia is a “loud dissenter” and China a “cautious partner." Sino-Russian cooperation is more like a flexible strategic partnership, in which both states are pursuing a pragmatic approach to cooperation based on mutual strategic interests. The Kremlin has supported China's short-term goals. However, the lack of mutual agreement on a long-term strategy can temper the Sino-Russian partnership as a result of unfulfilled expectations.
Despite the cooperation between China and Russia, there are concerns over China's desire to maintain a military foothold in the Arctic, as evidenced by its urge to buy a military base in Greenland. While a Chinese military presence in the region could potentially act as a counterweight to US pressure, it is important to keep the region free from any military presence. However, the Kremlin's dependence on Chinese investment may make it difficult to balance out its overloaded reliance on China with other potential partners, especially in the wake of the Ukraine invasion. If joint military presence in the region cannot be avoided, it is crucial that any cooperation in the sphere of maritime security is focused only on mutual economic activities. A joint statement on regional cooperation in the long run could help Russia understand China's long-term ambitions, enabling both countries to introduce a long-term strategy for the region.
Conclusion
Russia remains a pivotal player in China's engagement with the Arctic, with implications for the region and, more specifically, the United States. Russia's Arctic superpower status and its influence in regional affairs will only serve to intensify Sino-Russian cooperation. However, some scepticism may arise as China continues to expand its economic footprint in the region, potentially making Russia appear China’s junior in economic terms. Nevertheless, for now, their shared interest in countering US influence prevails. Therefore, geopolitical concerns for the United States will remain as no official agreement exists between Russia and China over the limits of Chinese presence in the region.