CSS Analyses in Security Policy CSS ETH Zurich No. 270, September 2020 Arctic Matters: Sino-Russian Dynamics As the Arctic ice recedes, interest in resource extraction and promising trade routes increases. Two actors in particular will have a strong impact on the region: China and Russia. Both are bound by an intricate dynamic of cooperation and competition, particularly in the energy sphere. As their interests do not always overlap, tensions and asymmetries between them may increase. By Maria Shagina and Benno Zogg The last couple of years have seen unprec- edented attention for the Arctic by media and think tanks, with reports of Arctic wildfires, oil spills, new energy projects, military exercises, or the ubiquitous image of polar bears on melting ice. July 2020 marked another record-low coverage of ice on the Arctic ocean, making resource de- posits and trade routes more accessible. Arctic routes promise shortened shipping lanes between Asia and Europe, creating commercial opportunities. At the same time, climate change is increasingly threat- ening the fragile ecosystem and local popu- lations, and geopolitical rhetoric is becom- ing ever more present in the Arctic. The Christophe de Margerie (R), an ice-class tanker fitted out to transport liquefied natural gas, is docked in the Arctic port of Sabetta, Yamalo-Nenets district, Russia, 30 March 2017. Olesya Astakhova / Reuters. Two actors are particularly central to recent events in the Arctic. Given its enormous landmass and Arctic coastline, Russia has been the most invested. This is underlined stage (see CSS Analysis 250). Their main on China is likely to grow. Russia is espe- by the fact that a large part of Russian nu- area of cooperation in the Arctic is energy cially keen on maintaining its dominant clear forces and its most promising natural exploration, which they have intensified position in the region and aims at diversi- resource reserves are in the Arctic. The re- since Western sanctions following the fying its partnerships. As a result, a com- gion is thus key to its national security and Crimean annexation. Chinese funds and plex pattern of cooperation and competi- its economy. China, meanwhile, has technology are increasingly important for tion between China and Russia has emerged as the most hotly debated actor in Russian extraction projects, for example in emerged, which will have a strong impact the Arctic. It frames itself as a “near-Arctic their flagship cooperation project on lique- on future Arctic matters and is indicative of state” based on its stakes in polar research fied natural gas (LNG) on the Yamal pen- their relationship overall. and commerce in the region. Its role is set insula. However, despite their warm rheto- to increase in a number of spheres. ric, China and Russia’s interests do not Arctic States and Stakes always overlap. The effects of the coronavi- As it is most commonly defined, the Arctic These two actors are connected through a rus pandemic may exacerbate their under- region extends above the Arctic Circle and “strategic partnership” on the international lying asymmetry, as Russia’s dependence comprises five littoral states with an Arctic © 2020 Center for Security Studies (CSS), ETH Zurich 1 CSS Analyses in Security Policy No. 270, September 2020 coastline: Canada, Denmark (through bly through its resource potential, as well as As the Arctic oceans become more navi- Greenland), Norway, Russia, and the US. its vulnerability, as the region is vast and gable in the coming decades, these ship- Furthermore, being located above the Arc- sparsely populated. Climate change poses ping routes – particularly the NSR – prom- tic Circle, Iceland, Finland, and Sweden an opportunity, as it discloses trade routes ise China shorter and cheaper alternatives are also commonly considered Arctic states. and new resources, but also a threat, as it to the current navigation routes. They allow The population of the Arctic regions in endangers the environment and existing Beijing to avoid maritime chokepoints in these countries approximates 4 million infrastructure. Russia re-emphasized the the Straits of Hormuz and Malacca, which people, most of whom live in Russia. importance of the Arctic, particularly the are vulnerable to piracy or interdiction by role of sea lanes and resource extraction for US naval forces or those of their allies. The The Arctic region is considered of vital im- Russian economic growth, in its basic prin- NSR is even cited as part of China’s mari- portance to many countries’ national secu- ciples for 2035, adopted in March 2020. time dimension of the Belt and Road Ini- rity and sovereignty. Arctic littoral states’ Currently, the gap between Russia’s desire tiative – a move based on earlier Russian exclusive economic zones extend 200 nau- to exploit increasing economic potential in calls for such a “Polar Silk Road” in its tical miles (370 kilometers) into the sea. the Arctic and the needs for investments in hopes for investment in this remote region. Most of the vast confirmed and assumed infrastructure is widening. Beijing is further concerned about being Arctic resource deposits lie on land or left behind in the changing governance of within these zones. Offshore reserves, Russia’s threat perception in the Arctic has the resource-rich Arctic. Discussions about meanwhile, are often difficult and costly to shifted from military confrontation that unresolved territorial and maritime dis- access. Apart from oil and gas deposits, the shaped the Cold War era to economic con- putes will have implications for China’s Arctic is rich in minerals. cerns and avoiding strategic vul- nerabilities. Highly important A complex pattern of cooperation Some of these resources lie in disputed ter- for commercial purposes is the and competition between China ritory. Based on extensions of their conti- vast fleet of Russian nuclear- nental shelf, several Arctic states claim en- powered ice-breakers, which and Russia has emerged. larged exclusive economic zones. Impor- Russia aims to modernize to tantly, these demands are submitted within maintain its edge in that sphere. This push commercial and shipping interests, after all. the UN Convention of the Law of the Seas as well as increased deployment of coast With its involvement in regional gover- (UNCLOS), and thus in line with interna- guard and military assets should be read as nance, Beijing seeks to secure its ability to tional law. A fundamental disagreement part of Russia’s aim of maintaining a domi- influence the rules of navigation. exists as to whether certain Arctic sea lanes, nant role in the Arctic and exploiting its namely the Northwest Passage north of economic potential. Its willingness to en- Driven by Energy Cooperation Canada and the Northern Sea Route gage in multilateral cooperation is high- In the Arctic, Russia and China have their (NSR) north of Russia, should be consid- lighted by a number of initiatives with Rus- own ambitions, but their objectives cur- ered these two countries’ internal waters, or sian participation, such as its settlement of rently overlap. Complementary economic rather international sea lanes and thus free territorial issues with Norway in 2010, or interests are the main driver of their coop- for navigation. Currently, only a few dozen the establishment of the Arctic Coast eration. international passages transit either of Guard Forum in 2015. At the same time, these lanes. Russian rhetoric and strategic documents For Russia, the development of unconven- have stressed the importance of the Arctic tional reserves is necessary to maintain its While UNCLOS is guiding the approach for Russia’s national security, the role of the production levels of oil and gas after 2030. to the issues raised above, the Arctic Coun- military for its protection, and reinforced With old oil fields in Western Siberia de- cil is the region’s most important intergov- Russian claims on disputed land. Snap ex- pleting, the Arctic offshore became a key ernmental forum. Switzerland assumed ercises have increased. Other Arctic actors strategic resource, in total estimated to har- observer status in 2017. The Council deals increasingly view these moves with concern. bor 13 and 30 percent of the world’s undis- with issues such as the environment, devel- covered oil and gas respectively. In the fu- opment, search and rescue, and research. China, meanwhile, is an unlikely Arctic ac- ture, the Arctic may account for 20 percent Russia will assume its chairmanship in tor given its geographical distance from the of the Russian GDP. Yet, Russian compa- 2021 and will use the platform to bolster its Arctic. It bases its interest on long-stand- nies lack advanced technology and suffi- Arctic strategy. ing scientific research in the region, and the cient capital to develop the Arctic. implications of climate change in the Arc- However, there is a lack of a suitable forum tic on China itself. In 2018, Beijing un- For China, the diversification of energy to discuss such hard security issues, partic- veiled its first White Paper on the Arctic, sources, suppliers, and transportation ularly since the 2014 annexation of Crimea. marking an “assertive turn” in China’s di- routes is part of its national strategy. China At the same time, military activities, such plomacy. For the first time, China sought has ambitious plans for an energy transi- as manoeuvres and deployments, have in- to legitimize its interests in the region. The tion, which foresees the share of gas to creased in the Arctic. Capabilities remain publication alone is indicative of China’s grow and partially replace coal. By 2050, below Cold-War levels, though, and often growing Arctic ambitions. China’s gas demand is forecast to rise, in- serve both civilian and military purposes. creasing the country’s dependence on im- China’s interests revolve around energy ex- ports.