The new cold war: China’s creeping ambitions in the Arctic set the stage for icy showdown

AS THE Arctic ice melts a staggering amount of gas and oil will become available. And China is trying its best to be around for a possible resource scramble.

Nick Whigham

news.com.auNOVEMBER 21, 2016

A closely cultivated relationship with Iceland has allowed China a foothold in the all important Arctic Circle.Source:Supplied

CHINA is considered an Arctic newcomer but the increasingly emboldened superpower is certainly making its presence known in the critically important polar north, a region considered to be the stage for the next big resource battle.

In a remote valley near the Arctic Circle construction workers are building a research facility to study the spectacular streaks of colour that light up Iceland’s wintry sky known as the Northern Lights. The joint facility between Beijing and Iceland is funded by China’s Polar Research Institute and the facility will house Chinese, Icelandic and international scientists when it opens next year.

The facility which will resemble a cement shell nestled in the snow is the product of a unique, and rather lopsided, friendship — and one that points to Beijing’s ever growing Arctic ambitions.

Iceland is happy to have a powerful friend while China wants to strengthen its presence in the region and cultivate an Arctic ally as climate change opens up new sea routes and resource-extraction opportunities.

Opportunities that a lot of countries are vying for.

The US Geological Survey carried out in 2008 estimated there is 30 per cent of the world’s undiscovered gas and 13 per cent of oil waiting to be found inside the Arctic Circle. So it’s no surprise that China has been steadily working to insert itself in a quiet struggle in the region.

Most estimates predict there will be no more ice in the Arctic Summer by 2050 while some climate scientists have even said it could disappear in the next two years during the Arctic Summer — hastening a potential scramble for resources.

THE FINAL FRONTIER

The Arctic is the closest thing left to virgin territory in the modern world.

Once of relatively little interest to the Asian giant, China has begun to formulate a regional strategy for the Arctic in the past decade in a mission to get a piece of the action.

Chinese Communist Party General Secretary Xi Jinping first referred to China as a polar great power when he visited Australia in November 2014 — a declaration that was years in the making.

Since then the country has become one of the most vocal of all external actors in justifying the involvement of non-Arctic states in the region.

On the surface, China’s latest project in the Arctic is about studying the Northern Lights. But China’s growing interest has also aroused suspicion among some Icelanders, who are wary of big powers trying to grab their resources, whether it be fish, energy or land.

“We are a very small country, we are only 300,000 people, so we don’t look at our independence as an automatic thing,” said Asgeir Jonsson, an economist at the University of Iceland. “It’s something that you have to protect and look after,” he told the Associated Press this week.

“In our history, we have a long story of fighting with the bigger powers around us over fish and the resources that we have. That has left its mark on the population.”

Iceland was devastated by the 2008 financial crisis. When the calamity struck Iceland’s banks — which had accrued debts more than 10 times the country’s GDP — collapsed and the government had to be bailed out by the IMF.

The resulting financial turmoil nudged the tiny country in the direction of China who saw an opportunity and was more than willing to help. Shortly after the two countries signed a free-trade agreement, making Iceland the first European country to do so with China.

“China needs a partner in the Arctic,” said Dr Nengye Liu from the University of New England’s School of Law. According to him, Iceland is a good partner but actually the second choice for China.

“Ideally, Norway would be the best ally because it shares a border with the Arctic,” he told news.com.au. However relations between the two nations soured in 2010 when the Norwegian Nobel Committee awarded the Nobel Peace Prize to incarcerated Chinese human rights activist Liu Xiaobo.

Northern Lights, Lapland Image courtesy Kakslauttanen Arctic Resort, FinlandSource:Supplied

Unlike Antarctica, most of the Arctic is under national jurisdiction and China has no chance of exerting the same influence as countries such as Canada, Norway, the US and Russia who border the Arctic.

It puts China at a massive disadvantage when trying to assert its national interest in the region. But Iceland can help in that quest, at least in part.

“We all know China is very interested in the Arctic,” Dr Liu said. The relationship with Iceland is more about a move from “symbolic participation to real participation,” he said.

Most importantly, “China wants to ensure it doesn’t get left behind.”

Some of the plans discussed by the two countries have been grandly ambitious, such as making a deep-sea port in a northern Iceland fjord to create a major shipping hub on the Northern Sea Route.

It remains unbuilt, but the economic relationship between the two countries is growing steadily.

Iceland has granted the China National Offshore Oil Company permission to explore in Iceland’s waters, and Beijing has tapped Icelandic expertise in geothermal power, a major industry in volcanic Iceland and a potential source of clean energy for China.

Aside from the increasing opportunity for the extraction of resources as the Arctic ice melts, there is also potential for greater fishing and the emergence of better shipping routes for Chinese cargo.

In an email to The Associated Press, the Chinese embassy in the US said China could benefit from Iceland’s “cutting-edge technologies in renewable energy, life-science (and) carbon-fibre industries,” as well as its fresh fish, meat, dairy products and mineral water. In return, China can provide Iceland with a wide range of Chinese-made goods.

Chinese President Xi Jinping. Picture: Fred DufourSource:AFP

In the past other world powers have also viewed China’s growing ambition in the Arctic with unease. However that seemed to shift in 2013 when the Arctic Council agreed to expand in order to include six nations, including China, as observer states.

The core members of the council are Canada, Denmark, Finland, Sweden, Norway, Russia, the United States and Iceland who all have territorial claims in the region.

China now attends annual Arctic Circle Assemblies hosted by Iceland which see gatherings of politicians, officials, scientists and businesspeople to discuss the future of the region.

Anne-Marie Brady, editor in chief of the Journal Polar and a global fellow at the Wilson Center in Washington. She has written extensively on China’s creeping Arctic ambitions and says the country has a “broad range” of intentions but says China’s main goal right now “is to make sure it has a seat at any decision-making table and has access to any rights that are up for grabs.”

She also points out that Iceland’s politicians have become adept at “playing the big powers off each other” in regional struggles.

“They are getting a lot more attention from the United States in recent years because of their perceived very good relationship with China,” she said. “And yet what the ordinary people think about that is often quite different from their government. ... the population has some misgivings about this close relationship.”

That suspicion was certainly evident when the Chinese-funded observatory was announced for a sparsely populated region 400 kilometres northeast of Iceland’s capital, Reykjavik.

That suspicion was fanned when former official at the Organisation for Security and Cooperation in Europe, Pascal Heyman, said the Chinese might want to use such equipment to keep an eye on NATO airspace.

In this photo provided by Dirk Notz, taken April 24, 2009, ice floats in the Arctic near Svalbard, Norway. At current carbon emission levels, the Arctic will likely be free of sea ice in September around mid-century. Picture: Dirk NotzSource:AP

THE BATTLE FOR THE NORTH

In 2008 the Arctic five committed themselves to the existing legal framework of the Arctic and the orderly settlement of possible overlapping claims.

The US Navy predicted as far back as 2002, there could be no ice in the Arctic summer by 2050. More recent studies by US agencies state it could happen much sooner.

The world is already seeing a scramble to lay claim to the resources currently locked away by the ice — and Russia is making a serious move.

In the past few years a newly aggressive Kremlin has been building a swathe of new (and reactivating many old) military bases along its Arctic frontier, something that has not gone unnoticed by the Pentagon.

The Polish Institute of International Affairs has previously warned that Moscow is setting up a naval infantry brigade, an air defence division, and a coastal missile system, in outlying archipelagos in the Arctic Ocean.

As the polar ice cap continues to melt, the world is witnessing nothing less than the opening of a new ocean and anyone able to exert influence over such a strong commercial area will be in the box-seat when it comes to world affairs.

The new shipping routes that are set to open up hold the promise of linking Europe and Asia via the northern pole that could, in the view of numerous maritime experts, substantially reduce travel distances, transit times, and overall transportation costs in the coming years.

As for the China and Iceland’s latest project, scientists hope the observatory will help them learn about the interaction between the sun and the Earth’s magnetic field, which could help predict space weather.

The building of the facility is behind schedule — in part due to a shortage of building contractors in Iceland — but is due to open late next year.

— With AP

A participant in the world's largest Arctic expedition in the recent 20 years, Kara-Winter 2015, organised by Rosneft oil company to study ice covers in the waters extending from the Barents Sea up to the East Siberian Sea. Picture: Valeriy Melnikov 
World's largest marine park to be created in Antarctic OceanSource:AFP