Russia And China In Arctic

Closer engagement between Russia and China has fuelled assumptions of an emerging axis. The Arctic is often cited as evidence of Sino-Russian alignment due to their growing Arctic ties across the security, strategic and commercial spheres. Beijing frames its Arctic relationship with Russia often in terms of “win-win” agreements and strategies. This term, “win-win”, reflects Beijing’s Confucius thinking, and indicates that the two countries’ bilateral mutually beneficial interests in the region remain far short of the increasingly popular assumption of a brewing Arctic alliance.

Resources and transportation (that is, the future history of global maritime trade) are the two primary strategic interests driving China’s Arctic gambit. All components of the Arctic resource “prize” are of interest to Beijing and feature across various policy statements and indeed within China’s 2018 Arctic Strategy. As a burgeoning global trade power, the ability to cut logistics costs and, indeed, transportation times, is of central interest to China. Here, the Northern Sea Route (NSR) – largely hugging the Russian Arctic coastline – links Asia to Europe. Through the Arctic Ocean, the Atlantic and Pacific Oceans are connected. Travel time between Asia and Europe via the NSR is about 23 days on average, compared with the Suez Canal’s 37-day average. In 2013, the first Chinese merchant ship transited the NSR and was the first container vessel ever to do so.

China’s Arctic interest dates to 1925, when it acceded to the Spitsbergen (now Svalbard) Treaty. The treaty benefited the signatories economically by facilitating access to mining rights on the Svalbard archipelago, while agreeing to protect Svalbard from any military buildup. This Arctic archipelago’s scientific and research value was further tapped by China in 2004 when Beijing built the Yellow River Arctic research station – cementing Chinese presence in the region.

In addition, the Xue Long (Snow Dragon), China’s first icebreaker, has conducted numerous Arctic research expeditions since 1999. Today, it is joined by Xue Long-2, China’s first indigenously built icebreaker. Murmurs of a nuclear-powered icebreaker about to roll off China’s production yard further point to Beijing’s growing polar capability. In securing observer status to the Arctic Council in 2013, China inserted itself into the Arctic governance ecosystem. But this does not place Beijing at the decision-making table – observers do not vote or lead multilateral discussion within the Arctic Council.

Beyond transportation, Beijing seeks to diversify its energy imports across the globe. This makes the resource-rich Russian Arctic Zone (both inland and offshore) an attractive component of China’s diversification strategy. While the Sino-Russian Arctic relationship is predicated on economic foundations, for now, Russia has yet to fall into Beijing’s “debt-trap diplomacy”. Moscow maintains stringent domestic legislation on joint ventures and ownership of sovereign energy deposits. This is a delicate balance. Russia relies on sustained future Chinese demand for Arctic liquified natural gas (LNG), but Moscow has also worked to diversify its capital pools. India, Japan, Saudi Arabia and South Korea are all linked to Russian Arctic energy ventures in one way or another.

China does not have a majority share in either of the two key LNG projects on the Russian Arctic’s Yamal Peninsula. Beijing’s share in the Yamal LNG venture is 29.9%, while Russia’s Novatek holds a controlling 50.1% and France’s Total holds 20%. In the Arctic-2 LNG project, China holds 20%, Novatek 60%, Total 10%, and the remaining 10% is held by a Japanese consortium. Russia’s upcoming Arctic energy projects, located in proximity to the existing Yamal Peninsula ventures Ob (LNG), Vostok (oil), Arctic-1 (LNG) and Arctic-3 (LNG), can be expected to attract diverse capital pools.

Likewise, on the NSR or “polar silk road” front, Russia maintains the upper (controlling) hand. The NSR wraps along the Russian coastline for most of its route. This is important to Russia for two reasons. First, much of the NSR falls within Russia’s exclusive economic zone (EEZ) and therefore Moscow has deemed it necessary to charge transit tariffs. The tariffs have been accompanied by Russia’s introduction of tight rules and domestic laws for foreign firms looking to use the route. Second, Russia insists vessels can only navigate the NSR when accompanied by Russian nuclear icebreakers. Tapping into NSR potential is thus subject to strict Russian directives.

The notion that there is a Sino-Russian Arctic alliance is a misinterpretation of the realities that drive China and Russia together in the Arctic

While mutually beneficial interests – and the overall sense of “win-win” agreements – facilitate close engagement between Beijing and Moscow in the Arctic, it is still problematic to assume an Arctic “axis” is forthcoming. China’s efforts to increase its engagement in the Arctic are occurring far beyond the Russian Arctic Zone. Iceland was the first European state to sign a free-trade agreement with Beijing, and China’s first intergovernmental framework in the Arctic was struck with Iceland in 2012. Various Chinese state energy interests have been floated in geothermal resources in Iceland – but to date the projects have been abandoned. In 2018, the China–Iceland Arctic Science Observatory opened and continues to operate. Iceland strategically presents as a logistics hub that would act as a key shipping port between Europe and Asia along the NSR. It seems clear that Chinese Arctic strategy is to “internationalise” the Arctic in a way that features and promotes China’s strategic benefit.

China is also driven by great power ideology and the prestige afforded by having a global polar footprint. Russia is aware of this simmering rationale for Chinese Arctic strategy. Efforts by China to move beyond the agreed terms of its mutually beneficial arrangement with Moscow within the Russian Arctic Zone, and how closely China adheres to the existing legal and sovereign arrangements of the Arctic Ocean, will certainly be a litmus test for the Sino-Russian Arctic “alliance”.

Indeed, Sino-Russian strategic tensions remain, well beyond the overhanging fear of centuries of mistrust and the issue of the Russian Far East. In June 2020, Moscow accused one of its leading Arctic scientists, Valery Mitko, of spying for Beijing. Mitko was charged with treason for handing over classified information on Arctic research and submarine sensor technology to China. But perhaps more telling is the way that both countries have hushed up the incident, with neither formally commenting on the arrest. For now, Beijing and Moscow appear to agree to disagree – so long as Arctic LNG business is booming.

The narrative of Moscow and Beijing working together to carve up the Arctic riches and take control of new global transport corridors has started to make its way into the policy and defence planning documents of Arctic-rim states. Washington’s litany of Arctic strategic planning documents – Naval, Air Force and Coast Guard strategies – feature renewed great power competition in the Arctic as a central security threat. However, the notion that there is a Sino-Russian Arctic alliance is a misinterpretation of the realities that drive China and Russia together in the Arctic.

The realities of the Sino-Russian relationship (dubbed by both as one of “mutual benefit”) in the Arctic is best grasped when the limits of the partnership are considered. There are, first and foremost, limits in terms of geographical boundaries. The Russian Arctic Zone is the lion’s share of the Arctic region, home to the NSR and a vast percentage of Arctic resources. The Russian Arctic Zone is also the geographical “limit” of Sino-Russian Arctic “cooperation” as well.

Of the eight members of the Arctic Council, Russia took the most convincing to grant China its observer status in 2013. Moscow approved membership, and with it, legitimacy, on the basis that Beijing explicitly acknowledged the sovereignty of Arctic-rim states and reaffirmed its commitment to the legal architecture of the Arctic region – the UN Convention on the Law of the Sea.

Russia watches, with tempered suspicion, Beijing’s Arctic high sea missions and scientific research agenda in what China sees as a global commons. Yet within the Russian Arctic Zone, Russia welcomes Chinese engagement, but on Kremlin terms. Since 2014, with Western sanctions over Russia’s annexation of Crimea and sustained aggression in Ukraine, Moscow has had a cashflow problem.

Despite key economic strategic partnerships in the Russian Arctic, China is busy diversifying itself throughout the region. China is actively engaging with other Arctic-rim powers and has commercial ventures, investment plans and entrenched soft-power strategies in Norway, Canada, Iceland and Denmark (through Greenland).

Despite mutually beneficial interests in the Arctic, commercial realpolitik is at the heart of China and Russia’s engagement in the region

Russia’s Arctic strategy is built on both economic security and frontier border security objectives. The Sino-Russian relationship lends itself to these economic security interests and ambitions, but it is less effective at navigating Russia’s Arctic “siege mentality”. This is largely because of the kind of increased interest and activity that China is undertaking in the Arctic – and against which Russia seeks to secure its vast open frontier. Any deterioration in Sino-Russian ties could threaten this delicate balance.

Russian efforts to securitise its economic interests in the Arctic fall short of an expansionist agenda. Beyond the posturing, ultimately Moscow’s Arctic priority remains regional stability. Continued regional cooperation with its NATO-member and Western Arctic neighbours remains a central strategic objective. After all, keeping the arena free of conflict is crucial to ensuring the NSR (and Russia’s future economic resource base) remains open and commercially viable. Russia needs to be able to deliver secure, trusted and unimpeded energy supplies from its northern frontier to Asian and European energy clients.

The same cannot be assumed of Chinese Arctic interests, with clear indicators of an emerging expansionist agenda. While much of Beijing’s recent Arctic Ocean missions have been primarily about “raising the flag” and promoting soft-power public relations campaigns for domestic consumption, it is evident that China is set to stay in the Arctic. While much of the Arctic Ocean is delineated by territorial seas and agreed maritime boundaries, the central Arctic Ocean does hold international waters, which facilitates Chinese engagement.

Fragmentation of Sino-Russian relations in the Arctic context might yet emerge from the outcomes of the Arctic continental shelf debate. Via the UN Commission on the Limits of the Continental Shelf, Russia, Canada and Denmark have all submitted formal, yet overlapping, claims to this continental shelf. Should a claim be upheld, the awarded state will then claim exclusive rights to the seabed and the resources beneath the area of the North Pole. This would block China’s access to seabed or resources in the international Arctic waters around the North Pole.

Overall, continued efforts to put Moscow and Beijing in the same “basket” when it comes to great power competition in the Arctic “great game” is short-sighted and misses critical opportunities to futureproof the Arctic as a zone of international cooperation, collaboration and low tension. Sino-Russian Arctic ties will continue to be predictable to a large extent. Ties will remain mutually beneficial – until they are not. Predicting this point should be the priority for Arctic stakeholders. The problem appears to be, for now, that many stakeholders assume a fractured or fragmented Sino-Russian Arctic relationship does not exist.

Russia and China’s Arctic relationship is not an alliance – it is driven by “win-win” thinking. Such framing is extremely subjective and prone to change. Despite mutually beneficial interests in the region, commercial realpolitik is at the heart of their engagement. For now, the partnership in the Arctic navigates existing fault lines elsewhere, such as Beijing’s failure to acknowledge Russia’s annexation of Crimea and Moscow’s nonalignment in the developing India–China conflict.

Sino-Russian mutually beneficial cooperation and engagement within the Russian Arctic Zone is not a Sino-Russian alliance in the Arctic. In a somewhat Confucius-informed position, Beijing wants to “seek harmony and keep differences” when it comes to engagement with Russia in the Arctic. Both countries will remain engaged proactively and collaboratively across industrialisation projects, diplomatic relations and various commercial dealings in the Russian Arctic Zone. But when this “win-win” situation sours, Western Arctic states may indeed be faced with another Arctic security threat – a conflict between Russia and China in the Arctic.

Elizabeth Buchanan is a former Australian Department of Defence employee who is currently a senior fellow with the Australian Strategic Policy Institute (ASPI) and an Associate Researcher with the French Ministry of Armed Forces’ strategic research institute (IRSEM).