China’s New Arctic Policy Needs Close Analysis
Photo Credit: Xinhua
By Mark E. Rosen

China’s New Arctic Policy Needs Close Analysis

Apr. 20, 2018  |     |  0 comments

Now that the dust has settled on China’s big policy announcement, it is time to take a fresh look at China’s Arctic Policy and assess what it means for the United States and the other five states that have a coastline on the Arctic Sea: Canada, Greenland (Denmark), Russia, Norway, and Iceland. Before delving into that policy and making comparisons to other policy documents that China has issued, it makes sense to first review the legal framework for the Arctic.


The Arctic region is fundamentally different from Antarctica in terms of its legal structure and its geography. The Arctic is essentially a maritime region and the Arctic Sea is the conduit for activity in the region. There are few roads, railroads, ports, or other infrastructure, and most of what is needed in the Arctic must arrive by ship and its resources must depart the same way. The absence of coastal infrastructure is especially acute in the Western Arctic occupied by the US, Russia, and Canada. The point of this is that most of the human economic activity that will take place in the Arctic will be proximate to the coastline and, by extension, the consequences of an industrial or shipping mishap will affect the Arctic Ocean and all the countries that border it.


Antarctica, in contrast, is a continent which is governed by a 1961 treaty which bans territorial claims and, for the foreseeable future, resource extraction except for the Southern Seas which have been a venue for fishing and whaling for many years. Even though overfishing is always a concern, the ill effects of substandard industrial and extractive activities is a concern for the Arctic, not Antarctica. Finally, the 1961 Antarctic Treaty bans military bases (and fortifications) as well as military maneuvers and any types of weapons testing. As a maritime region, the Arctic can be overflown by military aircraft and can be freely traversed by military ships of all types. Most military maneuvers in areas outside of coastal states’ territorial sea are also permitted.


Governance is another issue. The Arctic Council is the closest thing to a governance body, but it has no legal or regulatory authority to do much. This is because there is no overarching treaty governing the Arctic. Governance of coastal and offshore activities are determined by the 1982 UN Law of the Sea Convention (UNCLOS). UNCLOS gives each of the 6 coastal states the right to claim a 200NM exclusive economic zone and, depending on the bottom topography, a continental shelf of at least 200NM. Because of this 200NM entitlement, well over 80 percent of the Arctic Ocean is owned and controlled by one of the six coastal countries because of the legal and resource controls established by UNCLOS. What’s more, if one considers that Russian, Iceland, Greenland, and Norway each have claims to an extended continental shelf (ECS) beyond 200NM, the amount of true high seas territory that is beyond the exclusive legal jurisdiction of any coastal country becomes even smaller. (The US and Canada are also expected in due course to make these same ECS claims.)


There is also no comprehensive regional (or global) approach to such things as regulating offshore oil and gas and mining activities close to shore. The coastal countries under UNCLOS have nearly exclusive responsibility to regulate these sorts of activities in and on their EEZs and continental shelves subject to a very general duty to cooperate with other states. But, regulatory approaches by the individual countries vary greatly, and UNCLOS does not specify specific regulatory standards for industrial activity in this harsh region.


When it comes to shipping, there is the similar issue that coastal states have very little authority under UNCLOS to directly regulate shipping that passes through the Arctic Ocean unless a ship actually makes port. Under UNCLOS, issues such as ship design, construction, manning, and most enforcement rests with the flag state, not with the coastal state. Nor are there explicit legal authorities in UNCLOS that would require that transiting ships comply with certain standards, including the Polar Code. Some flag states are more responsible than others and Arctic port states could legally condition entry of a foreign flag vessel to its ports or internal waters upon compliance with certain rules, including the Polar Code. Outside of the current rules governing transits through Russia’s Northern Sea Route (NSR), there is, as of yet, no established practice of requiring a high level of compliance with Polar Code requirements. The point of this is that inconsistent standards enforcement sets the stage for an incident in which all of the coastal countries left to fight among themselves about who was responsible for a shipping incident and, more importantly, who will pay the clean-up costs.


How Does China Fit In?


Recent work by CNA and CSIS makes clear that China is both making substantial investments in the Arctic region and is constructing more icebreakers. Its commercial cargo ships and research vessels conduct transits through the three established shipping routes. China has made major investments in oil and gas sites in the region — especially Russia’s Yamal Peninsula — and is bidding on some major new Arctic infrastructure projects. These include a recent bid for a Chinese firm to expand Greenland’s airports; the creation of an undersea “data silk road” with investors from Finland consisting of undersea cables that essentially hug Russia’s NSR; and the establishment of seven floating survey stations along Canada’s Northwest Passage (NWP) to examine the feasibility of China investing the development of that route — raising concerns about the area’s environmental protection and sovereignty.


The data on Chinese investment patterns is somewhat spotty because of the different approaches by the regional countries to report inbound investments and the political sensitivity of sharing this information. CNA estimates that China has invested between USD 80-90 billion in projects north of 60 degrees latitude and there is no evidence that investment patterns are slowing given the breathtaking projections of Arctic oil and gas, minerals, geothermal and wind energy, and the promise of new shipping routes. The question for the US and other Arctic states is whether China will be a responsible Arctic participant, and whether China will seek a larger role in shaping the Arctic’s land-use and extractive industry standards such that they favor its political and economic interests. China’s development track record outside of the Arctic is mixed, and it will want to have a heavy influence in shaping the legal order — including the terms for development.


China’s Arctic Policy


China did not have a comprehensive Arctic Policy until 2018, but that does not mean that China has been uninterested in the region. On the contrary, China kept its “oar” in the water and became both an observer in the Arctic Council and steadily made investments in projects throughout the region. In 2012, PLA Rear Admiral Yin Zhou described the North Pole and surrounding areas as not belonging to individual countries but part of the “global commons.” These statements raised understandable concerns given that the coastal countries own most of the Arctic resources. China did not push this point and was content to focus on its economic and research agenda.


China’s political profile in the Arctic Council and other Arctic bodies was obscured somewhat by the fact that India, Singapore, Japan, and other states also sought a “seat” at the table where Arctic policies were formulated. Even so, Beijing opened research stations in in Canada and Svalbard and began making voyages using its icebreaker. China entered into a Free Trade Agreement with Iceland in 2013 and it also opened such talks with Norway. More telling were statements in PLA military literature that the Arctic was its “new Middle East” (because of the vast hydrocarbon reserves in a politically stable region) and the Arctic had the potential to solve China’s “Malacca Dilemma” when the shipping routes became ice-free for longer periods of the year.


With this backdrop, China’s Vice Minister of Foreign Affairs Kong Xuanyou presented “China’s Arctic Policy” on January 26, 2018 at a press conference. Of note, the document explicitly confirmed that China’s Arctic ambitions would be linked to its global (and expanding) Belt and Road Initiative via a “Polar Silk Road.” They also announced that “geographically that China is a Near Arctic State” in that the changes in the Arctic due to climate change and other factors has a direct impact on China’s climate system. 

The question for the Arctic is whether China’s argument that it wants a role in Arctic governance is something that it will seek to obtain via “direct negotiation” with individual Arctic states, or with states on a regional basis.

A large number of analysts have parsed the Policy to gain deeper insights — namely, will China be content to be a passive participant in governance discussions and in Arctic projects, or is something else more likely? Atle Staalesen writes in the Barents Observer that the policy statement projects the view that China has no territorial ambitions in the Arctic and that it is content to work within the established legal frameworks. In particular, the word “security” in only used 11 times, while the word “cooperation” is used 46 times in the paper. Similarly, the word “military” is never used, but the term “research” is used 41 times. In general, the tone is non-confrontational. Mia Bennett, writing in Cryopolitics, has a different take: namely, that China’s statement in the Policy that it views the Arctic as a “situation” that has a vital bearing on “the survival, the development, and the shared future for mankind” implies China will not be passive. If the Chinese link the Arctic’s future to their own survival, how possibly can they be passive?  China reinforces this “situation” concept with the statement that China’s Arctic Policy will be an extension of its role as the “champion of a shared future for mankind.” Bennett’s view that China’s policy goals to “understand, protect, develop and participate” in governance certainly suggests that China will seek to “interpret” the governance structure as one in which it has a major role even though UNCLOS gives virtually all power to the coastal countries.  

Our own assessment is that even though the tone of the Policy is positive, there are a number of passages which, in the end, could create challenges for the United States and its close allies since, as indicated above, legal jurisdiction for most Arctic waters (and sea-based resources) rests with six states: the United States, Canada, Russia, Iceland, Norway and Greenland. The following quoted passages raise concerns:

The “Arctic Situation goes beyond its original inter-Arctic States or regional structure.”

This suggests that the allocation of rights in UNCLOS doesn’t hold sway. It also suggests that the Arctic Council also lacks exclusive jurisdiction over Arctic matters. The language “goes beyond” suggests that China will use whatever diplomatic or economic level at its disposal to influence Arctic governance. And, while China uses language that it will respect existing structures — including UNCLOS — that does not mean that it will not go around those policies and seek new ones for its own benefit and those of the “international community.”

China is closely involved in the “transregional and global issues in the Arctic especially in such areas of...utilization of shipping routes, resource exploration and exploitation, security, and global governance.”

Given that the NSR and NWP are at least partially within the internal or territorial waters of Russia and Canada, one may question whether China has a legal basis to tell Russia or Canada how they can or should administer these waterways. They certainly can offer suggestions as a commercial consumer of those routes, but beyond that it would seem that China is exceeding its authority if it were to tell Russia or Canada how to grant access to those waters. Similarly, under UNCLOS and longstanding principles of international law, a country’s development of its resources is the sovereign right of that individual country — absent a situation in which there is overt damage to the marine environment. In what respect does China get a political say on how Russia’s onshore or offshore resources are developed?

“As a permanent representative of the UN Security Council China shoulders the important mission of jointly promoting peace and security in the Arctic.


It is curious that China believes that it can and will use the UN Charter as a legal predicate to promote peace and security in the Arctic. The Arctic is currently a peaceful region and there is no evidence of a sizable military buildup in the region (although Russia is modernizing its forces/bases). Indeed, there appears to be a good deal of cooperation at the Arctic Coast Guard Forum. The particular phraseology that China shoulders an important “mission” suggests that it regards the region as militarily unstable and leaves upon the possibility that it will send its warships to the Arctic to enhance “peace and security.” Perhaps China should have simply said that it reserves the right to dispatch its warships to the Arctic to protect its citizens and their investments. 

China’s Arctic Policy in Perspective

Even though analysts have been swayed by the non-provocative language, it is worth studying language that China has used in the past to justify its actions in the South China Sea which ultimately led to an adverse decision in the South China Sea Arbitration in July 12, 2016. China has asserted that its claims to the South China Sea are based on “historic rights” backed by imperial maps of the Ming dynasty and other historic documents. In successive legislative enactments in 1958 (territorial sea declaration), 1992 (territorial sea law), and 1998 (EEZ and continental shelf assertion) China has asserted its sovereignty over the Dongsha (Pratas), Xisha (Paracels), Zhongsha (Macclesfield Bank and Scarborough Shoals) and Nansha (Spratlys) although China never was specific about the coordinates and extent of these claims. China did offer a number of explanations for its sovereignty claims by its judge at the International Tribunal of the Law of the Sea (Judge Zhiguo Gao) and its Ministry of Foreign Affairs (in a Wall Street Journal Op-Ed). However, a key component of China’s policy leading up to the verdict in the South China Sea case was that “disputes concerning territorial sovereignty and maritime rights … should be peacefully resolved through negotiations of the countries directly concerned …” as opposed to via legal action using one of UNCLOS’ dispute settlement mechanisms. 

The question for the Arctic is whether China’s argument that it wants a role in Arctic governance is something that it will seek to obtain via “direct negotiation” (as it argued for in the South China Sea context) with individual Arctic states, or with states on a regional basis. It is appropriate to ask this question because some states may want to use legal processes established in UNCLOS when negotiations fail (the case with the Philippines), otherwise they could be in an unequal bargaining position. Similarly, would China subject itself to litigation in any of the local courts where it operated a mine, oil rig, or other facility, if local officials or activists felt that legal action — instead of friendly talks — was the best approach to confirm legal responsibilities? 

It is also interesting that China made six references in its Policy Statement to the 1925 Spitsbergen Treaty affecting the Svalbard Islands — namely, that the Treaty gives China “liberty of access and entry to certain areas of the Arctic” and, in a larger context, “freedom of rights of research, navigation, overflight, laying of cables and pipelines, fishing and resource exploration and exploitation.” That Treaty does grant China and 45 other states access to the Svalbard Islands for the purposes of research and resource exploitation, but that Treaty, if read fairly, only gives China a limited concession. Article 1 of the Treaty confers “full and absolute sovereignty” with Norway. In an Arctic context, is China likely to be content with the language in Article 1 and defer to Norway’s judgments? Or, as seems to be the case from a careful reading of their Policy, is China laying the groundwork for an argument that the Spitsbergen Treaty gives China an Arctic “legal presence” that they will use to argue for a seat at the table when Arctic resource questions are being discussed?


China’s Arctic Policy came as something of a surprise since China has been successful in making substantial shipping and other types of economic forays in to the region. If they had good access to the region, why publish a Policy? One is left to wonder whether China’s publication of a policy is a signal that it will be become increasingly assertive in Arctic matters, especially since it has been investing so much in the region. It seems highly unlikely China’s next move will be the purchase or annexation of territories, or even an Arctic military buildup, but Arctic policy-makers would do well to not become overly enamored with the soft language used in its Arctic Policy statement. The situation needs to be watched closely and, as suggested in the CNA FDI paper, the regional states need to collectively come up with mechanisms to deal with outside participants/investors in Arctic projects to ensure that they act in a responsible manner, are financially solvent, and do not upset the lifestyles and livelihoods of the region’s inhabitants.

The views expressed in this paper are those of the author alone and do not reflect the views of CNA or any of its sponsors.

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