ARCTIC AMBITIONS

Following China’s very public announcement of its plans to be a key player in developing the Arctic, Humphrey Hawksley asks how this could change the long-term balance of power in Asia

In a 5,500-word white paper published in January, China laid out its Arctic vision of building a ‘Polar Silk Route’ between Asia and Europe along the lines of its much-heralded Belt and Road Initiative.

Although not an Arctic state, China describes itself as an ‘active participant, builder and contributor, who has spared no efforts to contribute its wisdom to the development of the Arctic region’.

The Arctic is a cold wilderness as big as China, India and Russia combined. But global warming is changing it into a new strategic theatre involving trade and natural resources.The number of ships that break through in the summer months has risen from a handful to a few dozen in recent years, and many more are expected by 2050 when climatologists anticipate the ice will be weaker and journey times more predictable. Russia will have also developed ports and better infrastructure along the way.

The shorter Asia-Europeroute can cut more than a month off avoyage compared to the route through the Suez Canal, and traffic will increase as more fossil fuels and other resources became accessible. The Arctic is estimated to hold 30 per cent of the world’s natural gas reserves and 13 per cent of its oil, and China wants its share.

This vast frozen expanse, therefore, is transforming itself from being the domain of adventurous explorers to one of trade, resources and geopolitics, raising the question of how Asia’s other two pivotal powers, India and Japan, will deal with China’s footprint now being so firmly stamped onto the Arctic’s melting ice.

India and Japan’s initiatives are thin and bereft of detail, even though both governments have had a formal Arctic interest dating back to at least the 1920s.  Together with the then nationalist-run China, India and Japan became signatories to the Spitsbergen Treaty which ended a dispute between Russia and Norway over the Svalbard Islands south of the North Pole. The treaty allows signatories to carry out commercial activities and scientific research. Anything military is banned.

It was not until 1990 that Japan set up a research station there. China followed in 2004 and India in 2008, with the aim of tracking climate changeand its impact on rising sea levels.  In 2013, all three governments were given observer status to the Arctic Council that comprises the eight Arctic states, is strictly non-military and whose mission is to oversee the region’s development. From Asia, Singapore and South Korea were also accepted.

The Spitsbergen Treaty allows signatories to carry out commercial activities and scientific research.

But none of this points to cohesive long-term Arctic thinking, particularly of the type that would balance the juggernaut determination of China.

‘India’s foreign policy towards the Arctic is backed by a pragmatic awareness of an intra-Asia competition against China, a sense of victimisation under colonialism and a deep desire to gain and regain status especially regarding territories,’ says Aki Tonami of Denmark’s Nordic Institute of Asian Studies. ‘It remains to be seen whether India’s actions will match its rhetoric in the Arctic.’

Japan, too, is flailing. ‘Theoverarching ambition of Japan’s Arctic policy is to plant seeds in order to secure interests in the future,’ says Tonami, while pointing out that the government ‘has not createda unified, cross-ministerial task force operating within a unified strategy’.

Russia is by far the dominant Arctic state and has been pouring money into renovating military bases and the extraction of national resources for which it needs technology and investment. Its massive natural gas project on the Yamal Peninsula in western Siberia is one of the world’s biggest and most complex resource extraction projects and a striking example of how China’s grip has already strengthened. When Russia came under Western sanctions because of the 2014 takeover of Crimea, China stepped in and now has a 39 per cent stake in the project. Russia’s Novatek holds 50.1 per cent and France’s energy conglomerate, Total, has 20 per cent.

Russia’s huge natural gas project on the Yamal Peninsula is one of the world’s biggest
Russia’s huge natural gas project on the Yamal Peninsula is one of the world’s biggest

This commercial trade relationship begins to bear some resemblance to the short-lived anti-Western Sino-Soviet alliance of 50 years ago, which collapsed amid mutual acrimony. Then, it was ideologically-driven, and Moscow had control. Now, it is pragmatically transactional and Beijing has the upper hand. Shared authoritarian values are taking second place to the logistical need for money and resources.

While needing Chinese money, Russia understands the risk of relying too much on Beijing and sees India – and to some extent Japan – as preferred alternative investors.  In 2016, the Japan Bank for International Cooperation agreed on a $400 million loan for the Yamal project and after a recent visit to Moscow, IndianMinister of State for Petroleum and Natural Gas, Dharmendra Pradhan, outlined India’s long-term plans, led by the government’s ONCG Videsh conglomerate.

‘We are planning to invest in the Yamal project,’ said Pradhan. ‘We have also started discussions on a natural gas pipeline from Russia to India.’

The Russian-Indian relationship remains strong and uncomplicated, with Russian officials saying privately that the higher the level of Indian investment, the happier Moscow would be.

As has been happening with China’s influence spreading through Asia, there is an element of playing catch-up.  But the Arctic landscape is both geographically and politically different. First, seven of the eight permanent members of the Arctic council are developed Western democracies fully signed up to defending international law. Four are members of NATO and the Nordic states have long experience in international mediation and conflict resolution. Second, there is enough time to get it right –some 30 years before the climatologists’ predictions of fully open sea routes.

Shared authoritarian values are taking second place to the logistical need for money and resources

Had there been a diplomatic initiative back in the 1990s when China first put up makeshift shelters on reefs in the South China Sea, Beijing might not have had the confidence and wherewithal to build its military bases that could now pose a threat to international shipping. If their Arctic arrangements are allowed to solidify, there is the possibility of a Sino-Russian alliance controlling the eastern and western gateways to the Arctic which could impact trade routes within both the Atlantic and Pacific regions.

Therefore, in Asia, India and Japan have a responsibility to take a public and prominent lead, not only in keeping a vigil on China’s Arctic ambitions but also in fracturing any pact being forged between Moscow and Beijing.

It should not be difficult. Russia and China have never been easy bedfellows. But it must not be constantly deferred to the ‘to do later’ file, as it was with the military bases in the South China Sea. It will not need warships and guns, but investment, policy and implementation.

A good start would be for both governments to match China and publish their own long-term plans for this resource-rich and politically hazardous region at the top of the world which is becoming a new testing ground for the global balance of power.


Humphrey Hawksley is an Asia specialist. His next book, Asian Waters: The Strategy for Chinese Expansion and Struggle for the South China Sea, will be published in June by Overlook/Duckworth 

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