China is Planning a "Polar Silk Road"

[By Mike Scrafton]

Under Xi Jinping, China has a grand strategy to reshape the current geopolitical landscape. Xi has set out an integrated and coherent set of ideas about China’s ultimate objectives in the international system, and how it should go about achieving them over the coming decades.

That’s the Belt and Road Initiative (BRI). The Chinese government ‘has mobilized the country’s political, diplomatic, intellectual, economic and financial resources’ to meet ‘the most pressing internal and external economic and strategic challenges faced by China’.

The effective power of China’s political–economic model to implement a grand strategy is evident in the Arctic. The release of China’s Arctic Policy white paper in January coincides with what the US National Snow and Ice Data Center describes as ‘the second lowest Arctic maximum [extent of Arctic sea ice] in the 39-year satellite record’.

The Chinese white paper outlines a proposal ‘to jointly build a “Polar Silk Road”’ with existing BRI partners in order to ‘facilitate connectivity and sustainable economic and social development of the Arctic’.

In China, there’s no partisan debate over the scientific consensus on global warming like that found among political elites in the US. Climate change is simply accepted as an objective fact that needs to be accommodated.

The white paper opens by saying, ‘Global warming in recent years has accelerated the melting of ice and snow in the Arctic region.’ The ‘development of shipping routes in the Arctic’ as the ice retreats is therefore a goal because those routes will ‘become important transport routes for international trade’.

The sea ice is disappearing at a greater rate than expected. Arctic-capable shipbuilding technology is advancing in parallel. A South Korean-built Arc7 LNG carrier transited the Northern Sea Route in December 2017. The passage marked a major milestone—the first time a shipping vessel has made independent passage without the support of an ice-breaker during that time of year.

The Arc7 LNG carrier is one of 15 of the new class being built for the Yamal LNG project on the Kara Sea. This isn’t just ‘one of the largest and most complex LNG projects in the world’. The project is half-owned by Russia, 20% owned by the China National Petroleum Corporation and, significantly, 10% funded by China’s ‘Silk Road Fund’.

China’s partnering with Russia aligns China’s ‘geopolitical and economic interests’, providing it with a strategic stake in the Arctic, as well as access to LNG and potentially to other resources.

Geographically Russia already has a huge advantage in the Arctic. If the UN Commission on the Limits of the Continental Shelf decides in Russia’s favour on the Lomonosov Ridge claim, it will increase Russia’s exclusive economic zone by 1.2 million square kilometres. The Arctic is believed to hold up to one?third of the world’s untapped oil and gas reserves, as well as extensive but as yet unquantified mineral riches.

The Northeast Passage overlaps the Northern Sea Routh through Russian waters, which is most of its length. It’s the shortest route from the Atlantic to the Pacific. Traversing along the northern coast of Siberia, it cuts travel time from China to Europe by at least 12 days compared to the Suez route.

While the commercial advantages are obvious, the strategic importance of that route lies in the fact that ‘both China and Japan import 80% of their oil through the Strait of Malacca’. The so-called ‘Malacca dilemma’ of a potential US naval blockade of the straits in a conflict makes establishing the Arctic alternative all the more attractive.

Russia recognises the northern route’s importance and launched the world’s biggest ice-breaker in 2016, one of four being constructed. China already has one Arctic-capable ice-breaker and is building another to enter service in 2019.

In contrast, the Americans’ ability to operate year round in the Arctic is limited because the US has only one heavy and one medium ice-breaker that are operational. Both are beyond their life-of-type. At best the US might get a new Arctic-capable ice-breaker around 2025. Professional assessments suggest that the US needs six, but significant investment in ice-capable shipbuilding capacity would be required.

Even before the Arctic white paper, China’s ambitions were evident. Although not an Arctic nation, China has used diplomacy, trade, investment and research in pursuit of its Arctic objectives while trying to avoid a resource rush from which it might be excluded.

Therefore, an important objective of the new policy is to ‘participate in the governance of the Arctic’. China has pursued this by making a substantial contribution to the work of the Arctic Council, and by strengthening its relations with European Arctic nations. It has also established coordination mechanisms with Japan and South Korea, non-Arctic nations that share China’s commercial and strategic interests in the Arctic. The combination of long-term strategic objectives, a settled view of the objective facts, one-party rule, and substantial government direction of its economic activity account for China’s effectiveness in positioning itself to be a geopolitical force in the Arctic in the long term.

The Arctic demonstrates in a microcosm the potency of China’s capacity to implement its grand strategy generally. Whatever criticisms and grievances the US has with China’s contemporary trade, investment and intellectual property policies, or how distastefully Western commentators regard one-party rule, the true challenge for the US is to marshal its political and economic strengths behind a comparable long-term strategy.

Mike Scrafton is a former senior defense executive, former CEO of a state statutory body, and former chief of staff and ministerial adviser to Australia's minister for defense.

This article appears courtesy of The Strategist, a publication of the Australian Strategic Policy Institute, and is reproduced here in abbreviated form. The original text may be found here.