India and China in the Arctic: Breaching the Monopoly

18 May, 2013    ·   3936

Vijay Sakhuja assesses China's interests and politico-diplomatic initiatives in the region

China’s long wait for a ‘permanent observer’ status in the Arctic Council, a top-level intergovernmental regional body, is finally over. At the Eighth Ministerial Meeting in Kiruna in Sweden, the Arctic Council (five Nordic countries, Russia, Canada, and the US) finally agreed to invite China, India, Japan, Singapore, South Korea, and Italy as permanent observers to the Council.

Meanwhile, the European Union (EU) has been granted tentative observer status pending the resolution of its dispute with Canada over the 2011 European Parliament ban on seal meat and fur, traditionally produced by the indigenous Inuit people of the Arctic. The application of international environmental organisation, Greenpeace, and six other non-governmental organisations, such as energy industry groups, appear to have been rejected.

The Asian countries have welcomed the decision of the Arctic Council even if it is the ‘back row’ where they will ‘sit and listen’. They do not have voting rights in the Council, not entitled to introduce new ideas or raise problems, will be graded ‘on their behaviour’, and are required to adhere to the ‘principles embodied by this organisation’.

Drivers for Chinese Interests
Among the Asian countries, China has been the most proactive and has invested enormous political and diplomatic capital to ensure its inclusion in the prestigious Arctic Council. China’s interest in the Arctic region is driven by a number of factors such as science, resources (living and non-living), routes, and political influence. It is keen to obtain scientific knowledge of the on-going climate induced changes in the Arctic resulting in the melting of polar ice. In 2004, China established its Arctic research facility at Yellow River Station, located on the Norwegian island of Spitsbergen. It has also established in Shanghai a Polar Research Institute of China to train its scientists, and dispatched five research expeditions to the Arctic since 1999.

In 2010, China’s icebreaker Xue Long (Snow Dragon) sailed to the Arctic to collect data for the study of atmosphere, sea ice, and melting of the ice. China plans to build another icebreaker and launch three expeditions to the Arctic in 2015.

China is an energy hungry nation; domestic production has already peaked, and it imports nearly 60 per cent of its energy needs to sustain its economic growth. It is quite natural that China looks towards the Arctic, which is known to contain nearly 13 per cent of the world's undiscovered oil and 30 per cent of undiscovered gas. In November 2010, the Sovcomflot Group (SCF) of Russia and China National Petroleum Corporation (CNPC) signed a long-term cooperation agreement to develop seaborne energy solutions, with the SCF fleet serving the Chinese imports of hydrocarbons. The cooperation envisages shipments of oil and gas extracted from Russian Arctic offshore fields.

China is also keen to exploit mineral resources in Greenland, which is known for substantial deposits of rare earths, uranium, iron ore, lead, zinc, gemstones etc. Likewise, there are also opportunities for the Chinese fishing industry to exploit the new ‘fish basket’ in the ice-free waters of the Arctic, given that Chinese trawlers are seen catching Krill as far as 7500 miles into the Antarctic waters.

Northern Sea Route
China is also exploring the Arctic waters for shipping cargo through the Northern Sea Route (NSR). This route offers a saving of nearly 4,000 kilometres from China to Europe, compared to the route that runs through the Mediterranean-Suez Canal-Indian Ocean-Malacca Strait-South China Sea. Interestingly, China is already trading with the Arctic region, and its trade volume increased ten times to US $1.9 billion between 2001 and 2011. Besides, the Chinese shipbuilding industry is geared to build ice-class vessels for both domestic and international markets.

Politico-Diplomatic Initiatives
At the politico-diplomatic level, Iceland has found China a reliable partner. In 2008, China had come to the rescue of Iceland after the latter’s economy was floundering and the banks had collapsed. Ironically, no EU country had come to Reykjavik’s rescue. China had offered economic sops and since then, Iceland looks towards Beijing favourably. In fact, they have agreed on a free trade agreement, the first ever with an EU member country.

Finally, China hopes to be a responsible stakeholder in dynamics pertaining to the Arctic. A Chinese Foreign ministry official has explicitly stated that China, “recognises Arctic states' sovereignty over the Arctic region, their sovereign and administrative rights as well as their leading role in the council.” It has thus put to rest any misperception of its future ‘assertive role’ in the region after some Chinese articulation in the past had suggested that China should actively pursue the on-going Polar politics, and avoid being ‘forced into a passive position’.