The Snow Dragon in the Arctic

Global warming makes the Arctic interesting for China

China?s Huang Nubo represents a curious case. Huang, an erstwhile official of the Communist Party?s notorious Propaganda Department turned tycoon of the Zhongkun Group, is buying 300 square kilometres of land in a frigid, forlorn frontier of Iceland?a place called Gr?mssta?ir, ostensibly to build a ?luxury hotel? and ?eco golf course?. Luxury in the middle of boondocks makes precious sense, so much so that Iceland?s foreign minister offered to the New York Times ?you can almost hear ghosts dancing in the snow?. What is driving Huang?s venture?finances, reportedly made buoyant by the state-owned China Development Bank?

In an unrelated development, the ex-Prime Minister Wen Jiabao welcomed China?s non-nuclear icebreaker, Ukrainian built Xu? L?ng (Snow Dragon) in Reykjavik in 2012. Every Tom watching the ongoing negotiations for Huang?s 40-year lease deal (after sale was ruled out) and the Xu? L?ng?s entry is asking: Are Huang and Xu? L?ng proxy for the Chinese ?Snow Dragon? in the Arctic?

What could China?a veritable non-Arctic state, ?Arctic outsider??see in the Arctic? If anything, Huang?s audacious venture is an indication of China?s ballooning interests. In the past, China has successfully made inroads in Africa and Latin America under many an altruistic move or two. It is now warming up to the cold Arctic fuelled by the logic of economics and its own rise on the global stage talking the ?China Dream?.

The clamour for Arctic by many countries (including China) is the accidental outcome of global climate change that rendered the Arctic ice-free during the summers (since 2005). Predictions are that the Arctic will be ice-free by 2040. The possibility of the using the Arctic sea route also called the North sea route route is now a fact. The Northwest passage goes north of Canada; the Northeast passage extends along the coast of Russia. These routes are shorter shipping routes that China can use which will not only cut travel distance from Shanghai to US and Europe, but also cut costs.

The logic of economics lies in an energy hungry China. The US Geological Survey (2008) has indicated Arctic?s cache of unexplored gas, oil (30% of the world?s undiscovered gas and 13% of undiscovered oil) and mineral deposits such as rare-earths and uranium.

The fortuitous alignment of Chinese investment and interests including Huang?s venture must be seen in this light. While China has not espoused a clear cut ?Arctic Strategy?, it is getting there. The Chinese Arctic and Antarctic Administration (CAA) affiliated to the State Oceanic Administration (SOA) has conducted 22 large-scale Antarctic Scientific Expeditions and two Arctic Scientific Expeditions. The first Arctic Station was set up in 2004 in Ny-?lesund, Norway.

First, glimpses of Chinese investment. China is unabashedly putting money where the mouth is. The Chinese Embassy in Reykjavik cost a whopping $250 million; moreover, China is negotiating a free trade agreement (FTA) with Iceland. These are at the top of China?s calculation that Iceland will be at the head of the shipping routes through the Arctic. China is also readying for its first trans-Arctic ship voyage from Shanghai to Iceland later this year.

Second, some of the Chinese interests. The Arctic route offers a solution for China?s vexed search for an alternative shipping route. China?s heavy dependence, both economic and strategic, on the Strait of Malacca is viewed as a strategic vulnerability. According to sinologist Chen Gang of the National University of Singapore, the Arctic sea route will dramatically cut journey time for China by ?40% to Europe and North America?s east coast? (compared to conventional sea lanes via the Suez Canal or the Panama Canal). The estimated trip from Shanghai to Hamburg via the northeast route is also 6,400 km shorter than the traditional route via the Strait of Malacca and the Suez Canal.

In preparation and anticipation, China has leased piers at North Korea?s Rajin port (lease taken by Hunchun Chuangli Haiyun Logistics Ltd, based in Jilin province that lies close to the Korean border, in cooperation with six Chinese ministries and the Jilin provincial government) extended to 20 years (in 2011).

More voyages are predicted on the Arctic route. According to the Guardian London, ?Three years ago, no ships made the voyage. Last year there were 46?. According to Huigen Yang, the director general of the Polar Research Institute, Shanghai, it is estimated that ?between 5% and 15% of China?s international trade, mostly container traffic, could use the route by 2020?.

China is the world?s largest coal importer and second largest oil importer. The Russian National Security Council has indicated that the Arctic will become its primary resource base by 2020. Chinese oil giants such as China National Petroleum Corporation (CNPC), China Petroleum and China Corporation (Sinopec) and China National Offshore Oil Corporation (CNOOC) all have a say and stake in China?s evolving Arctic strategy.

The US Geological Survey has identified the oil and natural gas areas as the Arctic Alaska Basin (off Alaska), Amerasia Basin (north of Canada) and the East and West Greenland rift basins (off the coast of Greenland). Greenland has a $2.3 billion mining project led by the UK-based London Mining, which will supply 15 million tonnes of iron ore a year and employs an estimated 3,000 Chinese workers.

However, China is not a member of the eight-member political body, the Arctic Council (established 1996: five littoral states Canada, Denmark, Norway, Russia and the US; three circumpolar states Finland, Iceland and Sweden) but is an ad hoc observer. China has applied to become a permanent observer state joining other Asian countries in the bid including South Korea, Japan, India and Singapore, which is to be decided in this month by the permanent members.

Should the ?Snow Dragon? be viewed with concern? In the 19th century, the British unabashedly pursued the making of the Suez Canal; in the 20th century, America left no stone unturned to make the Panama Canal viable for itself. Pragmatically speaking, China is only leveraging the melting ice to ?secure and balance? its own interests. At stake are valuable resources, crucial transportation lines and fishery, all of which are important. China is staking claim but also accepting responsibility as member of the UN Convention on the Law of the Seas (1982).

Thus, the Chinese ?Snow Dragon? is steadily ploughing the Arctic snow grounded in a precedent set by the Great Powers, in a sound economic rationale supported by a domestic bevy of oil giants, mining giants, shipping giants, a diplomacy that is often off-colour and, of course, an enthusiastic state-prop by the name of Huang Nubo?in unision, weaving China?s Arctic Dream.

The author is a Singapore-based sinologist, currently a visiting fellow at the Institute of Chinese Studies, Delhi. Views are personal