Arctic ambitions driven by mercantilism
As global warming intensifies, Beijing’s interest in the Arctic grows, particularly if melting polar ice caps allow access through the Northern Sea Route in coming decades. This path is expected to offer a more cost-effective alternative to the Suez Canal, reducing transit times by nine days.
The region’s current shipping lanes are not ideal for China. The Northwest Passage is less economical and subject to Canadian navigation rules, while the conditions for shipping via the Arctic Central Passage are not yet favorable due to environmental and technical challenges.
Predictions suggest that by 2030, the Arctic Ocean may witness its first nearly ice-free summer. By 2050, the Northern Sea Route is expected to be one of the most efficient shipping paths between Asia and Europe.
Moreover, the Arctic holds abundant natural resources, including oil, gas, minerals and fish, with its untapped oil and gas reserves estimated to comprise about 25 percent of the world’s undiscovered resources.
After over a decade of dedicated efforts, China has achieved significant milestones in the Arctic. To date, China operates several scientific research stations in the region and has added two icebreakers to its fleet, which are capable of clearing paths for merchant ships in northern latitudes. China also secured observer status in the Arctic Council in 2013 and has established several agreements with Arctic nations for joint research and commercial endeavors in the Arctic Ocean.
In July 2023, a regular Sino-Russian shipping corridor along the Arctic sea lanes was officially launched, markedly reducing the distance and time required for cargo transport from Russia’s northern ports to China. In 2023, 80 voyages, comprising cargo ships, cruise ships and oil tankers, reached Chinese ports via the Arctic waterway.
Expanding Chinese interests in the Arctic
Beijing is well aware of the challenges and high costs associated with Arctic development and research. Some 80 percent of Arctic resource research and development is already under the exclusive control of the circumpolar states, presenting further obstacles for new entrants like China.
Historically, the Arctic represented a model of cooperation among the eight circumpolar nations. However, on March 3, 2022, Canada, Denmark, Finland, Iceland, Norway, Sweden and the United States issued a joint statement announcing the suspension of their cooperation with Russia within the Arctic Council, leaving Moscow in need of new partners to develop the region.
In 2022, Russia has been making unprecedented concessions to China when it comes to Arctic affairs. In March 2023, the two countries agreed to establish a joint working group to advance the Northern Sea Route project. The following month, they signed a Memorandum of Understanding to enhance cooperation in maritime law.
China’s covert support for Russia’s Arctic LNG 2 project
The Arctic LNG 2 project, the second major onshore gas initiative on the Gydan Peninsula, is being developed with international collaboration. Russian media predict that by 2050, these operations could contribute to 9 percent of global production of liquified natural gas (LNG).
In November 2023, the U.S. imposed sanctions on the Arctic LNG 2 project, into which over $20 billion had already been invested.
China’s involvement in this project mirrors President Xi Jinping’s strategy: on one hand supporting Russia and aiming to prevent the downfall of the Arctic LNG 2 project, while simultaneously not wanting to jeopardize its access to Western markets.
