Q: What has China articulated through its 2018 Arctic policy? And what are the policy’s essential pillars?
A: China’s Arctic policy builds on several years of diplomatic and political statements going back well before 2018. What the policy has articulated is unsurprising. The main pillars are China’s interests in rights to Arctic maritime navigation, resource development, circumpolar governance, scientific work, and all of this being done within a “win-win” framework. The policy states that China will work cooperatively with the circumpolar states, in resource development, in governance, in all these different fields to come up with a product that works for everyone.
That is the underlying message, whether you believe that is something entirely different. But that is at least the impression that China wants the rest of the world to have about its intents and its plans for the Arctic. Within the policy, there is an underlying message that China respects Arctic state sovereignty and that they are there to work with Arctic states. But there’s also that strong messaging that China has the same rights in the Arctic that not every non-Arctic state has, which are freedom of navigation, a say in international governance in areas that are outside of state sovereignty or state jurisdiction, and the right to engage in economic development and investment in the region.
The polar Silk Road is an extension of China’s broader Belt and Road initiative. It is a $1 trillion investment in global infrastructure, but we haven’t seen much of that in the North American Arctic. We have seen considerable Chinese infrastructure investments and resource investments in the Russian Arctic—Russian natural gas, oil developments, infrastructure to support shipping through the Northern Sea Route; primarily shipping natural gas and oil from Northern Russia, to China.
Q: What opportunities and challenges does China’s posture in the North present for Canada? Are our national interests in the Arctic compatible?
A: In theory, China’s Polar Silk Road could some bring investment into Northern Canadian infrastructure, which is badly needed, and which Canadian governments and companies have not been willing to fund. If you look at the investments in Northern Russia, these are resources which are easier to access. They have easy access to market, where shipping routes are already very real, rather than theoretical. In the Canadian Arctic, Chinese companies do own some greenfield sites for potential mines, but they’ve owned them for a long time. Chinese companies are waiting to see if the economics improve, or if the Canadian federal government wants to subsidize them, which has been under consideration for a while. I don’t think we should be doing that.
The challenge comes from China, or by extension, a state-owned company which might gain effective control over a region of the Canadian North through economic investment. A state-owned company that builds several mines in the Canadian Arctic will effectively control the economy of a big part of a sub-region. Because there’s little economic activity generally in the North, a big mine has a huge footprint with respect to jobs and regional economic activity. A Chinese state-owned company that owns several mines within a region of the Arctic has a great deal of control and leverage. This provides a degree of political power. Theoretically, you could see Chinese state-owned companies providing most of that investment and providing most of the jobs in a region. They then gain the political power to withdraw that investment or to lay people off.
Chinese political interests could lead to those state-owned companies trying to use that control to leverage a territorial government to influence the federal government to do something that is in China’s interest. While conjectural, this is a security concern that governments should at least be aware of and are probably considering right now.
Q: Should there be concern about China’s desire for a role in resource development in Canada and elsewhere? Do these ambitions pose a threat to Canadian sovereignty and security?
A: There are obvious perils in allowing unrestricted Chinese investment in the North. It’s inherently dangerous to allow a competitor, with a clear track record of using economics and trade to bend other countries to their political will, to dominate a regional economy. While there are other examples of significant Chinese investment in Canada, such as in the Alberta oil sands, there’s a clear difference, since those areas already have significant Canadian investment, significant foreign non-Chinese investment, to the point where Chinese investment doesn’t dominate that sector of the economy. They’re not the only game in town, they don’t have the same kind of leverage that they would in the North.
One possibility is to allow Chinese investment to enter as minority or non-controlling partners. This is something that’s very common in Russia, where the Chinese are welcome as minority shareholders, but where control over the projects is Russian.
Sovereignty is not a serious concern. Canada has sovereignty over these lands. There’s no realistic possibility or conceivable vehicle for Chinese investment being used to challenge Canada’s ownership over the Arctic. There is foreign investment across the Canadian economy, and no one talks about us losing our sovereignty in the oil sands or Atlantic offshore. But that depends upon how you define the word ‘sovereignty’.
When people worry about China as a military threat in the Arctic I think that concern stems from much broader and very justified concerns over Chinese activity, economic and military aggressiveness in the world, such as in Taiwan, in the border region with India, and the South China Sea. These are areas where the Chinese are increasingly aggressive, increasingly willing to make military threats and to try and overturn or ignore existing law and international norms. A lot of commentators see that behavior and project it into the Arctic. People assume that China will behave there in a manner consistent with their behavior in the South China Sea and there is a certain rationale for that. Yet, in gauging the threat we need to consider Chinese national interests in the Arctic and what they probably need to achieve those interests. Chinese access to sea routes, resource development, governance structures, all of the things that they say they want, they get most easily by working with the Arctic states.
If China misbehaves in the Arctic or challenges Arctic state sovereignty, it will find it much harder to get what it wants in the Arctic. Right now, Chinese commercial ships can go through the Northwest Passage, and we’re happy to have them there. They just ask permission, and we would probably be happy to say yes. If China challenges Canadian sovereignty, access to the Northwest Passage will be cut off. We don’t have to assume that China will somehow be more concerned with maintaining international law than they are in the South China Sea. However, we need to recognize that they have certain goals, which can be achieved only through cooperation in the Arctic. The Chinese aren’t going to see their behavior transformed because the step into some kind of zone of peace, but the Arctic and the South China Sea are different and any strategic analysis has to take that into consideration.
Q: Is it possible that we will see increased international attention in the Arctic? Could Canada find itself in a security dilemma between the US, Russia, and China?
A: It depends on what we mean by security. Canada has been sucked into the trade war between China and the U.S in several different ways. I can envision that spilling into the Arctic in the future. There are also worries about Chinese investment, which can be used as leverage in a trade war. If you have a series of mines being run by Chinese state-owned enterprises, there is the threat that those mines could be shut down during a trade dispute to create a crisis in Northern communities and put pressure on Ottawa. Investments could cease and jobs would dry up because of ‘worry about the investment climate’, or something of that nature. Now that may be an economically counterproductive decision by those mine owners, but one which would track with Chinese political requirements.
From a military perspective, China is unlikely to send warships or military assets into the Arctic. Operationally though, you may very well see the emergence of hybrid threats. If you look at Chinese operations elsewhere – in the South China Sea and across the Pacific – it’s often fishing fleets and maritime militia leading the way, not their navy. If the Arctic opens to fishing, you may see the same surge of “independent” fishing boats working on our continental shelf similar to the South China Sea and off the Galapagos Islands recently. Ships operating just outside our continental shelf could result in hybrid war, or a hybrid security situation, much like the Cold War, but now with a far more powerful opponent.
There’s also the possibility of Chinese submarines operating in the Arctic. While it’s hard to see the operational necessity for Chinese boats in the polar waters, there are political reasons that shouldn’t be ignored. It’s conceivable that a Chinese government, which has already been using its Navy as a political messaging tool, would send a submarine across the polar waters to demonstrate Chinese technical capability and global reach. Chinese submarines may pop up in the Arctic, more as a political statement than for operational presence.
Canada is preparing for a more open Arctic, and we are preparing for more challenges. Right now, we have a fleet of eight Arctic partial ships being built for the Navy and the Coast Guard, which is fantastic; they will be very useful. Canada has been developing its army capability in the North since 2002, after letting that capability largely atrophy after the Cold War. We have a satellite surveillance system in the North too. We have capabilities that are geared to the kinds of threats that we are facing and will face.
There’s always the possibility of a sovereignty threat because more countries around the world are becoming interested in the Arctic but that’s nothing really new; there has been the potential for a threat or a challenge to Canadian sovereignty dating back to the 1950s. With respect to China, we’re unlikely to see a serious challenge to Canadian sovereignty because the Chinese get what they want by playing by the rules. There is always the possibility of an American challenge to Canadian sovereignty. Under Trump, the U.S was veering in that direction. With President Biden, and less temperamental, less tweet-based, foreign policy, that threat has largely disappeared.
The situation in the North is evolving with the environment, but Canada has been adapting its policies. We’ve been adapting our capabilities as well. While still leave something to be desired, I think that they are well-calibrated to face emerging challenges. I do think many Arctic concerns are overblown as well. The Chinese may not be dedicated to international law, and we can only speculate as to the sincerity of the 2018 Arctic policy statement, but China’s ambitions require cooperation. I believe the Chinese will be driven by their own self-interests and I think it’s pretty clear that their self-interests point them in the direction of cooperation, at least in the Arctic.
Adam Lajeunesse is the Irving Shipbuilding Chair in Canadian Arctic Marine Security Policy and an Assistant Professor at the Mulroney Institute of Government, St. Francis Xavier University. He is the author of Lock, Stock, and Icebergs (2016), a political history of the Northwest Passage, as well as co-author of the 2017 monograph China’s Arctic Ambitions and What They Mean for Canada, and co-editor of Canadian Arctic Operations, 1941-2015: Lessons Learned, Lost, and Relearned (2017).