January 19, 2012

For China, Economic Leverage in the Arctic May Be Part of the Long Game

A new post by Andrew Erickson and Gabe Collins in The Wall Street Journal’s China Real
Time Report blog paints a great picture of how economic opportunities in the
Arctic may redraw geopolitical relationships.

Erickson and Collins write that “Denmark
has made a strategic decision to prioritize its economic relationship with
China and is now becoming the key gateway for Beijing’s commercial and
strategic entrée into the Arctic
,” including being an advocate for China to
have permanent membership on the eight-seat Arctic Council. In particular,
Denmark seeks to use Greenland’s mineral wealth (including coveted materials
like rare earths, uranium and iron ore) as a means of fostering stronger
economic ties with China (Erickson and Collins note that exports have been
steadily increasing between both countries over the last several years).

While both may gain in the near term (Greenland in
particular will benefit from Chinese investments in infrastructure that the
island is thin on, including more power lines and power stations), it is not
hard to see that China benefits more from this new arrangement over the long
term. As Erickson and Collins describe, “From
Beijing’s perspective, having Chinese companies buy several billion dollars per
year worth of pharmaceuticals and machinery and doing container shipping
business with Maersk is well worth it to gain access to Arctic negotiating
tables and Greenland’s minerals

Indeed, the big win for China, in my view, is that Beijing has
a strong advocate in Denmark for promoting Chinese interests and access to the
Arctic. This is huge for China. Whether or not China takes a seat on the Arctic
Council in the near term is less a concern than China’s growing economic
leverage over Denmark, and potentially other countries, that may enable Beijing
to challenge international norms in the Arctic – including those under the Law
of the Sea Convention. This dynamic is already playing out in places like the
South China Sea, where China’s behavior by and large conflicts with international maritime law, including
freedoms of navigation and access of the seas
. In that region, China’s
Southeast Asian neighbors have been mindful of their trading partnerships with
China as they decide how hard to push back against Beijing’s assertiveness. (Trade
with China generally seems to promote cautious and passive behavior.) It is not
difficult to imagine a similar dynamic evolving in the Arctic as members of the
Arctic Council develop deeper economic ties with China in the Arctic Circle. Indeed,
economic leverage could be part of China’s long game in the region – and a
pillar of its grand strategy. I’m not suggesting that conflict will arise
between the United States and China (or others) in the Arctic, but it is a
trend that U.S. policymakers should be monitoring. For me, it reinforces the
view that the Arctic continues to grow in strategic importance and the United
States can’t keep punting on the issue.