Economic Statecraft
China’s New Role in the Arctic

Interaction between Russia and China on the development of the Arctic region is becoming one of the important areas of Russian–Chinese “comprehensive partnership and strategic cooperation for a new era.” China now has a historic opportunity to become Russia’s new priority partner in the implementation of Arctic projects, writes Liudmila Filippova, Senior Research Fellow at the Russia, China, World Centre of the Institute of China and Contemporary Asia of the Russian Academy of Sciences (ICCA RAS), Head of Regional Affairs Committee, Member of the Board of Russia-China Friendship Association (RCFA).

Every leading news agency in the world followed Chinese President Xi Jinping’s March 2023 visit to Russia due to the possibility of progress in the ongoing Russian–Ukrainian conflict. However, the main results of the visit lay within the framework of the existing bilateral agenda, including agreements on the development of cooperation in the Arctic, which could have major implications for the future of the entire Arctic region.

Given the similarity of Russia’s regional priorities and interests to those of other Arctic states, especially the other countries of the Arctic Five, Russia has typically prioritized them over non-Arctic players in regional projects. Russian officials have consistently stated that all the basic “rules of the game” in the Arctic should be established by the eight Arctic states that are members of the Arctic Council in full compliance with international law. Russia has long believed that relations with non-Arctic states with the status of observers in the Arctic Council, including China, should be based on their respect for the sovereignty, sovereign rights, and jurisdiction of the countries of the Arctic Council, the historically established international legal regime of the region, as well as the culture, traditions, and specific way of life of the indigenous peoples of the North.

The aggravation of relations between Russia and the West against the backdrop of the Ukrainian crisis led to the so-called Russian “pivot to the East,” which at first did not gain much momentum in Russia’s Arctic policy. However, anti-Russian sanctions have largely removed the previous fears about large-scale Arctic cooperation between Russia and non-regional players and have, in fact, contributed to closer ties in the Arctic between Russia and non-regional players, including China. In a sense, these changes have contributed to the sale of an additional 9.9% stake in the Yamal LNG project to the Chinese Silk Road Fund (in addition to the 20% stake previously sold to CNPC) and the success of the first project to lay the foundation for China’s participation in the Arctic LNG-2 project.

Economic Statecraft
The Arctic: Eurasia’s Final Pivot
Emanuel Pietrobon
The Russian Arctic is as resource-rich as it is inherently weak. It is militarily vulnerable to malicious foreign activities. It is demographically poor, being home to only two million people. Additionally, it lacks a highly developed land-and-sea infrastructure network, although the adoption of a pioneer mindset could give rise to a Russian remake of the American Westward expansion

As a result, the Chinese have obtained an almost 30% stake in the Yamal LNG project and 20% stake in the Arctic LNG-2 project, which has allowed the Russian company NOVATEK to attract long-term financing for the development of the project on favourable terms. In exchange, in addition to direct investment income, the Chinese side received access to natural resources and secured reliable imports of the raw materials that China itself extracts. China has also increased the export of its technologies for the Arctic projects. These include technological modules for the production of liquefied natural gas needed for the implementation of Yamal LNG and drilling rig installations, which have already been used repeatedly on Russia’s Arctic shelf.

Russian–Chinese cooperation in the Arctic was, for a long time, limited mainly to multilateral commercial projects and some interaction in the scientific and education sphere. Indeed, the current level of relations between Russia and China in the Arctic contrasts significantly with the situation just a few years ago. During China’s historic Fifth Arctic Scientific Expedition in 2012, the icebreaker Snow Dragon (雪龙, Xue Long) made its first passage through the Northern Sea Route (NSR). However, the expedition made history for another reason: Russia banned Chinese scientists from conducting marine research while passing through the NSR. In 2020,  charges of high treason for passing secrets to China were brought against a well-known Russian scientist, Valery Mitko, President of the Arctic Academy of Sciences. In 2021, the Ministry of Industry and Trade of Russia, which held a tender for the construction of new Russian icebreakers, strongly opposed the participation of Chinese shipyards in the project. The transfer of the icebreakers’ design documentation to China was deemed unacceptable “since Russia would be competing with a partner in Arctic developments.”

However, the beginning of Russia’s military operation in Ukraine and the large-scale sanction policies of Western countries have consolidated Russia’s “pivot to the East” in the Arctic. Given the suspension of cooperation with Russia by other Arctic states in the Arctic Council (in spite of it having been chaired by Russia from 2021 till 2023), in the Barents Euro-Arctic Council, the Northern Dimension, and the Nordic Council of Ministers, Russia will be seeking for new partnerships in the Arctic and Russian–Chinese collaboration is likely to grow. And even if Russia’s role is restored, for example, in the Arctic Council, it will inevitably be different since Russia’s partners there will now be not five but seven NATO countries. This jeopardises the future of the existing formats of multilateral cooperation in the Arctic.

This assumption is partly confirmed by the amendments to the Basic Principles of State Policy in the Arctic until 2035 which Russian President Vladimir Putin approved in February 2023, shortly before Chinese President Xi Jinping’s visit to Russia. In the 2020 version, the task was to “strengthen good-neighbourly relations with the Arctic states on a bilateral basis and within the framework of multilateral regional cooperation formats, including the Arctic Council, the coastal Arctic Five and the Barents Euro-Arctic Council.” In contrast, Russia’s current priority in Arctic international collaboration has become the “development of relations with foreign states on a bilateral basis, within the framework of appropriate multilateral structures and mechanisms.” In other words, Russia has officially declared that it can no longer characterise existing relations with its Arctic neighbours as “good neighbourhood” and sees the future of international cooperation in the region with a wider range of countries. In addition, the failure to mention in the Basic Principles such established formats as the Arctic Council and the Arctic Five in favour of a broad definition of “relevant multilateral structures and mechanisms” suggests that Russia might be considering the creation of new institutions of regional cooperation. This could imply boosting the involvement of selected non-Arctic states (China, India, etc.), especially if the format of the so-called “Arctic Seven” (without the participation of Russia) is further institutionalised by Western countries.

The amendments to the Basic Principles, which is one of Russia’s key Arctic documents, laid the foundation for the agreements reached by Russia and China during the summit in Moscow in March 2023. The Joint Statement on Deepening Comprehensive Partnership and Strategic Cooperation for a New Era published during the visit concluded with the words: “The parties stand for the preservation of the Arctic as a territory of peace, stability and constructive cooperation,” suggesting a further deepening of the dialogue between Moscow and Beijing on Arctic issues. Much more significant, however, was the mention of  the decision which was not included in any of the joint statements but was voiced by President Putin during the negotiations: “We believe the cooperation with Chinese partners in developing the transit potential of the Northern Sea Route is promising. As I have said, we are ready to create a joint working body to develop the Northern Sea Route.”

The NSR has a special place in the priority system of Russian–Chinese cooperation in the Arctic, especially in the context of the development of the Polar Silk Road and the wider Belt and Road Initiative. The development of the NSR is important for both China, as the largest shipper and consignee of goods transported by sea, and Russia, as part of the process of modernising its infrastructure (and attracting foreign investment), increasing the cargo turnover along the route (at least to the designated but not yet achieved target of 80 million tonnes), and transforming the NSR from a national transport artery into an international transport corridor.

Even a few years ago, when voices from both sides could be heard saying that bilateral relations had reached an “unprecedentedly high level” and the tasks to develop the NSR infrastructure appeared no less pressing, it could not be assumed that Russia would allow China to participate in the decision-making process about further development of the NSR. However, bilateral cooperation is now developing rapidly: just a month after the President Xi Jinping’s visit to Russia, in late April 2023, a memorandum of understanding on strengthening maritime law enforcement cooperation was signed by the Federal Security Service of Russia and the Chinese Coast Guard and the Chinese delegation was, for the first time, able to participate as observers in Arctic Patrol 2023, the large-scale exercises in the Barents Sea.

In a sense, Chinese President Xi Jinping’s visit to Russia summed up the very essence of the Russian chairmanship of the Arctic Council from 2021 to 2023, which, due to the boycott of Western countries, did not allow either Russia or the Council itself to play the role that they are capable of or enable the emergence of new multilateral Arctic projects to the advantage of all parties. Nonetheless, against this background, the role of China and the growing Russian–Chinese vector of cooperation in the region have become much more noticeable. If, earlier, the main concern about the prospects for international cooperation in the Arctic was that China, which only has the status of an observer state in the Arctic Council, would begin building its policy in the Arctic through “separate” cooperation with individual Arctic states or within the framework of associations with other non-regional players, the challenge is now much more severe. The continuing Western boycott of constructive dialogue with Russia, which has the longest coastline in the Arctic, will only push Russia further into the “Arctic embrace” of China, thus contributing to the deepening of Russian–Chinese cooperation and increasing Beijing’s presence in the region.

The beginning of Russia’s military operation in Ukraine consolidated Russia’s “pivot to the East” in the Arctic. The interaction between Russia and China on the development of the Arctic region is becoming one of the important areas of Russian–Chinese “comprehensive partnership and strategic cooperation for a new era.” China now has an historic chance of becoming Russia’s new priority partner in the Arctic projects. Xi Jinping’s visit marked the beginning of a rapprochement between Beijing and Moscow in the strategic areas of Arctic cooperation. Although such rapprochement is unlikely to be curtailed, the speed of its development will largely depend on the readiness of other Arctic states to protect the Arctic agenda from the influence of a broader global political agenda and to return to a constructive dialogue within the traditional institutions of multilateral cooperation, such as the Arctic Council and the Barents Euro-Arctic Council.

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On Pause: Dialogue with Russia in the Arctic
Natalya Vyakhireva
Any approach to regional cooperation in the Arctic that excludes Russian involvement in the long term will be difficult. However, according to some Western analysts, if the nature of Russian policy does not change, the continuation of cooperation with Russia within the framework of the Arctic Council over the long term will be problematic, writes Natalya Vyakhireva, Expert and Program Manager of the RIAC.
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.