In the Thick of It

A blog on the U.S.-Russia relationship

China’s Arctic Ambitions Could Make or Break US-Russian Relations in the Region

December 01, 2021
Ingrid Burke Friedman

While U.S.-Russian relations continue to deteriorate in many spheres, the Arctic provides an arena for possible cooperation. In particular, Russian wariness of China’s Arctic ambitions could provide novel opportunities for warming ties between Moscow and Washington.  

Washington on edge as relationship between Russia and China continues to strengthen

Moscow-Beijing ties are flourishing. Evidence of this abounds in areas ranging from military and aerospace cooperation to booming bilateral trade. In March of this year, the two powers agreed to join forces to build a research station on the Moon. In August, some 10,000 troops participated in Zapad/Interaction 2021—a series of joint strategic military exercises, which, according to the Russian Defense Ministry, aimed to demonstrate the "determination and ability of the two countries to fight terrorism and jointly protect peace and stability in the region." And in October, the Russian and Chinese navies conducted the latest in a series of joint maritime exercises in the Sea of Japan. Meanwhile, bilateral trade reached upwards of $40 billion in the first quarter of 2021—a 20% increase compared to the same period of 2020. And a representative of China's Commerce Ministry has announced plans to increase trade with Russia to some $200 billion, effectively doubling 2020's bilateral trade volume.

Given all this, it should come as no surprise that Russian President Vladimir Putin and his Chinese counterpart Xi Jinping have taken every opportunity to lavish praise on one another. In a call in August, they proclaimed their mutual intent to continue cooperating ever closer "on the entire complex of issues on the bilateral and international agenda." More recently, Putin told Xi in a message marking the 72nd anniversary of the PRC's founding: “I am confident that through our joint efforts, we will continue to enhance Russian-Chinese cooperation in a wide range of fields. This fully meets the interests of our nations and contributes to greater security and stability at the regional and global levels,” Putin noted. “President Xi Jinping is my friend,” Putin told CNBC most recently.

The Sino-Russian partnership has expanded not only qualitatively, but also geographically with some of their interaction reaching the Arctic Circle. In April 2019, Russia announced plans to connect the Northern Sea Route, along which Moscow plans to begin year-round navigation in 2022-2023 with China’s Maritime Silk Road. Use of the NSR could pose significant advantages in terms of shipping times. According to a 2018 study published by The Economic Journal, commercial use of the NSR could represent a reduction of average shipping times by about one-third compared to its southern counterpart. In practical terms, shipping from China to the United Kingdom would decrease by 25% compared to the Suez Canal route, and from China to the Netherlands by 23%, according to the study, which estimated that overall trade cost reductions brought about by this more efficient route would increase trade flows by an average of 10%. According to the article, use of the NSR could decrease transportation costs between China and various European countries (e.g. Germany, the United Kingdom and the Netherlands) by upwards of 20%. The authors predicted that by 2030, some 13.4% of Chinese trade would be re-routed through the NSR.

Washington’s concerns over the burgeoning Moscow-Beijing alliance have been well documented as the two adversaries-turned-“best friends” have taken pains to signal their mutual disregard for what they see as a system of international law and policy dominated by American hegemony. While high economic and national security stakes have often (though not always) encouraged relatively good diplomatic behavior in the Arctic, joint Chinese-Russian initiatives in the region have proven to be no exception to Washington’s general unease.  For instance, when Russia announced plans to link the NSR to the Maritime Silk Road, then-U.S. Secretary of State Mike Pompeo responded by asserting: “We're concerned about Russia's claim over the international waters of the Northern Sea Route, including its newly announced plans to connect it with China's Maritime Silk Road (MSR).”

The U.S. Defense Department’s latest unclassified Arctic strategy echoed these concerns. “While most Arctic nations are U.S. allies, America’s great power competitors—Russia and China—have developed Arctic strategies with geopolitical goals contrary to U.S. interests. Russia seeks to consolidate sovereign claims and control access to the region. China aims to gain access to Arctic resources and sea routes to secure and bolster its military, economic and scientific rise.”

Moscow circumspect as Beijing edges closer to the Arctic

Despite the general strengthening in China-Russia ties and the potential NSR-MSR linkup, Moscow has also signaled wariness in recent years with respect to Beijing’s growing Arctic ambitions.

In 2007, China first applied to become an observer of the Arctic Council, the leading intergovernmental body promoting Arctic cooperation. Comprising eight permanent members, all of which have territories within the Arctic—Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the United States—the Arctic Council envisions itself as the region's collective body of stewards, charged with overseeing the land, waters and people of the region. At the time of China’s initial application, according to the Arctic Institute, Moscow displayed resistance to what it viewed as the Council's unnecessary internationalization, as its Nordic partners on the Council pushed for the inclusion of any state that could make a compelling case for its observer status.

Beijing succeeded in its bid to join the Council as a non-Arctic observer state in 2013. Two years later, Russian Foreign Minister Sergei Lavrov made clear that Chinese-Russian cooperation in the region was purely bilateral and had no bearing on the Council’s governance affairs. "China is an observer in the Arctic Council. China seems to have favorable prospects, because it has appropriate resources, technologies and scientific potential. But our Arctic cooperation with China should not boil down to the Arctic Council. Russia’s Arctic zone is the area where we can work on a bilateral basis with many partners. Of course, China is one of the priority partners," he said in 2015.

Then in 2018, the Chinese government released a white paper detailing the policy implications of its status as a so-called “Near-Arctic State.” In the paper, China argued that due to climate change, the Arctic was no longer the concern of the region’s states alone. “The Arctic situation now goes beyond its original inter-Arctic States or regional nature, having a vital bearing on the interests of States outside the region and the interests of the international community as a whole, as well as on the survival, the development and the shared future for mankind.”

The paper went on to define a near-Arctic state as “one of the continental States that are closest to the Arctic Circle,” arguing that shifting Arctic conditions have a direct impact on China’s environment, and thus on its economic health. According to the paper, the consequences of this self-designated status are sweeping. “China’s policy goals on the Arctic are: to understand, protect, develop and participate in the governance of the Arctic, so as to safeguard the common interests of all countries and the international community in the Arctic, and promote sustainable development of the Arctic.”

In comments delivered in May 2019, Pompeo responded in no uncertain terms. “Beijing claims to be a ‘Near-Arctic State,’ yet the shortest distance between China and the Arctic is 900 miles. There are only Arctic States and Non-Arctic States. No third category exists, and claiming otherwise entitles China to exactly nothing,” he said.

Russia’s top Arctic official, Nikolai Korchunov, made the surprise move in June 2020 of effectively siding with Washington’s then-top diplomat. "Russia is not interested in delegating its rights to other states," he said, as quoted by TASS. “In this respect it is impossible to disagree with [Pompeo’s] statement made in May 2019 that there are two groups of countries—Arctic and non-Arctic. He said so in relation to China, which positioned itself as a near-Arctic state. We disagree with this."

The mineral wealth at the center of the Arctic’s geopolitical intrigue 

At the core of all this geopolitical posturing is the fact that warming Arctic temperatures open up a bounty of natural resources. The Arctic may contain up to 90 billion barrels of oil and 47 trillion cubic meters of natural gas, Russia's potential shares of which amount to 48 billion barrels and 43 trillion cubic meters, respectively, according to the Stimson Center. And some $1 trillion worth of rare earth metals is believed to be housed in the Arctic ice, according to The Wall Street Journal.

This latter point may prove particularly impactful from a geopolitical perspective. Rare earth metals have been treated with increasing strategic significance by global powers in recent years. While these metals have a range of civilian uses, including in telecommunications and renewable energy, they are seen as essential in the manufacture of missiles, hypersonic weapons and other military technologies.

China has for decades been expanding its reach over the global rare earths supply, and its efforts have paid off. In 2020, the country produced about 90% of the world's rare earths, Reuters reported, citing Canadian consulting firm Adamas Intelligence, and Beijing has already made moves for Greenland’s rare earth supply. Its monopoly over these elements enable China to control global prices, and give it a powerful tool to counteract sanctions imposed by the United States and European Union.

In October 2020, then-U.S. President Donald Trump issued an executive order intended to boost U.S. production of rare earth minerals, citing both their critical use in developing military technologies, as well as the need to circumvent China's control of the global rare earth market. Under U.S. President Joe Biden, this push has continued, with the Departments of Defense and Energy both making moves to shore up the United States’ rare earth supply and processing capacities. 

And Washington is not alone in its increasing anxiety about Beijing’s rare earth monopoly;

Moscow has also signaled unease, announcing plans to invest $1.5 billion, positioning itself to become the world's second largest producer by 2030, Reuters reported, citing Russian Deputy Industry and Trade Minister Alexei Besprozvannykh.

The Arctic as an arena for cooperation

Several recent studies have highlighted the simultaneously increasing risks and opportunities cropping up in the region, paired with the dearth of a comprehensive system of governance, to indicate that the current geopolitical environment is ripe with policy possibilities.

A recent Center for a New American Security (CNAS) policy paper found that despite increased Russian military and grey-zone activities in the Arctic, Moscow has signaled a readiness to cooperate with its regional partners, and that the United States should not pass up this opportunity: "Russia likely seeks to use its [Arctic Council] chairmanship to be seen as a leader, on par with the United States, and to frame itself as a defender of Arctic stability. These are not inconsequential aims, and the United States and its Arctic allies should use this opportunity to work with the Russian chair to reduce tension and set in motion small steps toward stabilizing relations in the region.” The paper's authors suggested that Washington and its Arctic allies should aim to relaunch military-to-military talks between the Arctic nations and establish a regional rules-of-the-road agreement that would define unacceptable behaviors, thereby increasing regional stability, predictability and transparency. The authors also encouraged the United States and its regional allies to seek opportunities to enhance cooperation with Russia in areas of mutual interest such as maritime safety and security.

A recent RAND Corporation report found that though various bodies, such as the Arctic Council, and legal instruments, such as the U.N. Law of the Sea Convention, do exist, the lack of a central governing international treaty leaves the region riddled with governance gaps, including: “limited dialogue and transparency on military issues, limited capability to execute governance agreements and tension between the growing need for inclusivity and Arctic states’ interests.”

As global powers, permanent members of both the Arctic Council and the United Nations Security Council, and states with territories in the Arctic, Russia and the United States are uniquely positioned to craft such a treaty, which could also perhaps advance their shared interest in combating climate change and protecting biodiversity in the region. Additionally, the United States could act on Washington’s and Moscow’s shared concern about China’s increasing Arctic ambitions by inviting Russia to co-lead the development of an international legal instrument that would ensure the involvement of China and other non-Arctic states in the region is adequately regulated.

Ingrid Burke Friedman is a fellow at Harvard University’s Davis Center for Russian and Eurasian Studies and Features Editor at JURIST Legal News & Commentary. She previously served as a consular officer with the U.S. State Department.

Photo shared under a Pixabay license. The opinions expressed herein are solely those of the author.