Along the road : China in the Arctic.
Date: 2018-03-11
Institutions: European Union Institute for Security Studies
Subjects: Arctic, China, European security, geopolitics

to Europe, passing through the Malacca Straits 
and the Suez Canal. Sea ports were among the 

In January 2018, on the occasion of the release 
of its Arctic policy white paper, China unveiled 
the Polar Silk Road project – officially incorpo-
rating  the  Arctic  Ocean  into  its  trillion-dollar 
Belt and Road Initiative (BRI). Far more than a 
mere shipping route, the Polar Silk Road under-
lines  the  consistency  and  the  scale  of  Beijing’s 
ambitions  in  the  Arctic,  combining  economic 
and security interests and boosting its strategic 
presence in the region. 

Why and how did Beijing manage to gain ground 
in the Arctic and what are the implications of this 
for European security? In many ways, the Polar 
Silk Road is a good example of China’s approach 
to  expanding  its  influence  globally,  combining 
foreign direct investment (FDI) in strategic sec-
tors,  ‘science  diplomacy’  and  norm  shaping. 
This Brief examines the gradual deployment of 
these three instruments, before highlighting the 
many interconnected security concerns that the 
Polar Silk Road project entails for the EU.

China’s rising profile in the Arctic

China’s  interest  in  developing  strategic  infra-
structure  along  the  Northern  Sea  Route  dates 
back to 2016, after it was identified as a plausi-
ble alternative to the traditional southern route 

1

Along the RoadChina in the Arcticby Cécile Pelaudeix Summary >The Arctic has growing importance as part of China’s quest to secure access to natural and energy resources, including rare earth elements (REEs).  China has also intensified energy cooperation with Russia and built economic partnerships in the Arctic, while systematically developing strategic infra-structure there.  >While China does not yet have the capaci-ties to project military power in the Arctic, the potential that it could use the facilities, technologies and resources it has acquired for other than civilian purposes is real. >The scale and speed of the development of the Polar Silk Road may pose a challenge to the environmental and social standards up-held by the EU. >Addressing the many security challenges that the Polar Silk Road entails will require strong political will and unity on the part of EU member states and their partners. 132018 Photo by Knut Troim on UnsplashEuropean Union Institute for Security Studies (EUISS)European Union Institute for Security Studies (EUISS)December 2018Figure 1 | A Chinese view of Arctic sea routes
Captions label Shanghai, Rotterdam, New York, the ‘North East Sea Route’ (red) and the ‘North West Sea Route’ (blue)

Source: Arctic Portal

first targeted infrastructure projects. In October 
2016, the Chinese company Poly International 
Holding  Co  confirmed  its  intention  to  finance 
the  construction  of  Russia’s  Arkhangelsk  deep-
sea  port,  a  major  modern  transportation  hub 
with an expected capacity of 38 million tons, to 
be completed by 2035. The state-owned China 
Ocean Shipping Company (COSCO), one of the 
world’s  largest  shipping  companies,  repeatedly 
demonstrated  interest  in  participating  in  the 
construction of a deep-sea port in the northeast 
of  Iceland:  the  Finnafjord  project,  expected  to 
become  a  major  hub  for  trans-Arctic  shipment 
with  a  6.3  km  long  quay,  will  begin  awarding 
concessions to investors and operators in 2019.1 
Other investment proposals have been received 
by  the  Lithuanian  port  of  Klaipeda  and  the 
Norwegian port of Kirkenes.

Land infrastructure development follows accord-
ingly. Poly International Holding Co is currently 
considering the possibility of investing $5.5 bil-
lion in a railway linking Arkhangelsk to Siberia. 
Another  Arctic  railway,  linking  Rovaniemi  in 
Lapland  to  the  Norwegian  port  of  Kirkenes,  at 
an estimated cost of €3 billion, would open up a 
new connection from the Baltic Sea region to the 
Northeast  Passage  and  to  Asia,  and  this  is  also 

attracting China’s attention.2 The last leg of the 
‘Arctic corridor’ – a 100km-long undersea tun-
nel between Helsinki and Tallinn – is the latest 
target of Chinese investors, possibly contribut-
ing 70% to the estimated total €15 billion cost.3 

Finally, in Greenland Chinese investors are eyeing 
the air transport sector. China Communications 
Construction  Company  (CCCC)  took  part  in 
the bidding process for the tender organised by 
Kalaallit  airports,  a  Greenlandic-owned  com-
pany  which  sought  investments  for  three  air-
port  infrastructures  on  the  island:  Nuuk  (the 
capital), Ilulissat (a tourist destination due to its 
UNESCO World Heritage Centre), and Qaqortoq 
(in the South). The bid put forth by the CCCC 
gave rise to security concerns in Denmark and 
in the US. Denmark feared Greenland could fall 
into a debt trap, an outcome which has charac-
terised  a  number  of  Chinese  investment  deals 
along its Belt and Road Initiative, such as in Sri 
Lanka.  Greenland,  while  a  self-ruled  territory, 
still depends on economic aid from Copenhagen 
which  amounts  to  €470  million  per  year,  ap-
proximately 40% of the island’s GDP. Denmark, 
which  retains  competences  over  defence  in 
Greenland,  was  also  worried  that  the  airports 
could  be  used  for  military  purposes  and  upset 

2

European Union Institute for Security Studies (EUISS)European Union Institute for Security Studies (EUISS)December 2018the US, with whom the Kingdom has a Defence 
Agreement  since  1951.  The  Thule  Air  Force 
Base is a very important part of America’s mis-
sile  defence  system.  Greenland  and  Denmark 
therefore concluded an agreement in September 
2018 granting Denmark a 33% stake in Kalaallit 
Airports  in  exchange  for  €93  million  for  the 
construction  and  operation  of  the  airports  in 
Nuuk and Ilulissat.4 Denmark also provides the 
government  of  Greenland  with  a  loan  guaran-
tee  of  €60  million.  Yet  the  deal  does  not  rule 
out  China’s  investment  in  the  project  and  still 
excludes the Qaqortoq airport. While approved 
by the Parliament in Greenland, the agreement 
is still awaiting approbation in Denmark.

Besides connectivity, the Arctic matters to China 
for its resources. The region is estimated to con-
tain 13% and 30% of the world’s undiscovered 
oil  and  gas  reserves,5  which  constitute  another 
major target of Chinese FDI. The China National 
Petroleum Corporation (CNPC) and China’s Silk 
Road Fund hold a 20% and 9.9% share respec-
tively in the Yamal LNG plant, which started its 
production in Russia in December 2017. Yamal 
LNG is the largest production site in the coun-
try:  it  has  a  production  capacity  of  16.5  Mt/
year  which  represents  more  than  15%  of  the 
world  market.  In  2017,  China  Development 
Bank  signed  a  memorandum  of  understanding 
(MoU)  with  Russia’s  largest  independent  natu-
ral gas producer Novatek for another economic 
project – the ‘Arctic LNG 2’, located on the Ob 
river estuary, with a production capacity of 19.8 
Mt/year.6 Investments in other offshore projects, 
such as the CNPC contract with Rosneft to ex-
plore  three  areas  in  the  Pechora  and  Barents 
Seas, are yet another example of the intensifying 
energy  cooperation  between  Russia  and  China 
in the Arctic. Finally in Iceland, China National 
Offshore  Oil  Corporation  (CNOOC)  reached  a 
deal  with  Eykon  Energy  to  explore  its  north-
east coast. Although it later withdrew from the 
project  due  to  scarce  initial  findings,  Iceland 
could  be  a  Chinese  gateway  to  Europe.  In  the 
wake of the 2008 financial crisis, it was the first 
European  country  to  sign  a  free  trade  agree-
ment with China in 2013 and is keen to attract 
Chinese investment flows. 

China’s  interest  in  Greenland  started  with  its 
resources,  and  some  of  these  have  a  strate-
gic  dimension.  This  is  the  case  of  Rare  Earth 
Elements (REEs), which are extensively utilised 
in  alternative  energy  technologies,  electron-
ics,  space  exploration  and  the  defence  sector. 
Greenland holds 9.16% of global REE reserves7 
and  is  the  most  promising  potential  source  of 
REEs  in  Europe,  along  with  the  Baltic  Shield.8 
The  Kvanefjeld  site  in  the  south  of  Greenland 
contains  one  of  the  world’s  largest  identified 

deposits of REE and uranium. In 2016 Chinese 
state-controlled mining company Shenghe pur-
chased a 12.5% share of the Australian company 
Greenland Minerals and Energy Ltd to exploit the 
site. More importantly, in August 2018, the two 
companies signed an MoU allowing Shenghe to 
make an equity investment in the project and to 
acquire all REE output produced at Kvanefjeld 
to  process  it  for  direct  supply  to  the  industry. 
The project thus gives China even stronger con-
trol over REE production in the world. 

Diplomacy through science

The scope of the Polar Silk Road positions China 
as a powerful stakeholder in the Arctic. But this 
did not happen overnight and the first harbin-
gers could be seen in its proactive involvement in 
scientific research. Back in 1994, China bought 
an  icebreaker  –  the  Xue  Long  (Snow  Dragon)  – 
which  it  subsequently  upgraded  to  a  polar  re-
search vessel. In 1996, it became a member of 
the International Arctic Science Committee, and 
by 2004, it had already built a research station 
in  Svalbard,  Norway  (the  Arctic  Yellow  River 
Station)  and  organised  eight  scientific  expedi-
tions. Its application in 2009 to be an observer 
at the Arctic Council, a status granted in 2013, 
firmly  established  Beijing’s  ambition  in  the  re-
gion.  China’s  accession  to  observer  status  was 
carefully  planned  through  science  diplomacy. 
A case in point is its cooperation with Iceland, 
where  an  initial  MoU  between  the  Icelandic 
Centre  for  Research  and  the  Polar  Research 
Institute of China, signed in 2012, eventually led 
to a joint China-Iceland statement that includ-
ed a provision on Icelandic support for China’s 
candidacy to the Arctic Council.9 Although the 
observer  status  does  not  allow  a  direct  role  in 
governance – the Council has no legal personal-
ity and little regulatory capacity – it legitimises 
Beijing’s involvement in Arctic affairs. 

The set-up of the China Nordic Arctic Research 
Center  (CNARC)  in  Shanghai  in  2013  demon-
strates China’s use of science diplomacy to pro-
mote its interests. Officially, the purpose of the 
platform is: (i) to foster research contacts and to 
increase  awareness,  understanding  and  knowl-
edge of the Arctic and its global impacts; and (ii) 
to promote the sustainable development of the 
Nordic Arctic and the ‘coherent development of 
China in a global context.’ In practice, it serves 
to build Chinese confidence and knowledge of 
the  Arctic,  enables  dialogue  between  scholars, 
and helps to convey a positive image of China as 
a contributor to Arctic science and to social and 
economic development in the region. The flag-
ship  initiative  of  the  CNARC  is  the  annual 
China-Nordic  Arctic  Cooperation  Symposium, 

3

European Union Institute for Security Studies (EUISS)European Union Institute for Security Studies (EUISS)December 2018addressing  issues  such  as  shipping,  natural  re-
sources, fisheries, tourism, and providing a con-
venient  forum  for  exploring  openings  and  the 
state  of  play  in  new  economic  arenas.  Other 
platforms, such as the Arctic Circle, chaired by 
former President of Iceland Olafur R. Grimsson, 
and  of  which  the  Polar  Research  Institute  of 
China  is  a  partner,  organise  large  conferences 
across the North and Asia, serving a similar pur-
pose.

Three dimensions of science diplomacy, as 
defined by the Royal Society (2010)10  

(1)  Science  in  diplomacy:  informing  foreign 
policy objectives with scientific advice 

(2)  Diplomacy  for  science:  facilitating  inter-
national science cooperation 

(3) Science for diplomacy: using science co-
operation  to  improve  international  rela-
tions between countries.

Chinese  scientific  diplomacy  quickly  yielded 
results.  In  2013,  China  and  Iceland  jointly  es-
tablished  the  Aurora  Observatory,  inaugurated 
on 22 October 2018. Its scope of activities was 
widened  in  2017  at  China’s  request  to  also  in-
clude  research  on  atmosphere,  oceanography, 
geophysics, remote sensing and biology.11 Pascal 
Heyman,  a  former  official  at  the  Organisation 
for Security and Cooperation in Europe (OSCE), 
surmises  that  the  Chinese  might  want  to  use 
the equipment to monitor NATO airspace.12 In 
Sweden, another space observation research cen-
tre was established in 2016: the China Remote 
Sensing  Satellite  North  Polar  Ground  Station 
(CNPGS). It has already ‘improved China’s capa-
bility to access remote sensing data in the Arctic 
region’. In Finland, an agreement was signed in 
April  2018  with  China  to  establish  a  joint  re-
search  centre  for  Arctic  space  observation  and 
data  sharing  services.  Speculation  about  scien-
tific equipment being used for military purposes 
has  given  rise  to  concern.  In  May  2017,  with-
out  any  official  authorisation  from  Greenland, 
a satellite ground station project, supported by 
Beijing Normal University, with potential dual-
use capabilities, was launched in Kangerlussuaq, 
Greenland’s main airport.13 China has also pro-
posed  to  build  the  biggest  research  station  in 
Greenland.

Scientific  diplomacy  efforts  have  also  swiftly 
unfolded at sea. By the time Europe and North 
America  had  begun  to  speculate  about  if  and 
when  the  Arctic  Ocean  would  open  up  oppor-
tunities  for  transit  shipping,  the  Yong  Sheng 

Chinese  cargo  ship  had  already  transited  sev-
eral  times  through  the  Northeast  Passage  since 
2013. China organised a workshop in Shanghai 
in  2015,  gathering  Arctic  experts  from  ship-
yards, shipping companies, ship design and en-
gineering firms, icebreaking services, insurance 
companies, the banking, business development, 
and research and development sectors, and aca-
demia.  In  September  2017,  it  launched  a  sec-
ond domestically-built polar icebreaker, the Xue 
Long  2  (Snow  Dragon  2).  Not  only  does  China 
now match the US in terms of operational ice-
breakers,  it  has  also  issued  a  tender  for  a  nu-
clear-powered one.14 Having acquired sufficient 
confidence  in  the  matter,  the  13th  Five-Year 
Plan 2016-2020 mentions the establishment of 
a  ‘new  shore-based  Arctic  observation  station 
through  cooperation’,  building  ‘new  advanced 
icebreakers’,  completing  ‘the  basic  framework 
for a land-sea-air observation platform in the po-
lar regions’, developing ‘exploration technology 
and  equipment  suitable  to  the  polar  environ-
ments’, as well as establishing ‘a service platform 
for the provision and application of information 
regarding the polar environments and potential 
polar resources’.15

The development of the Polar Silk Road is con-
comitant  to  China’s  interest  in  the  Antarctic. 
Common technology and equipment are used in 
both regions which are targeted in the National 
Security Law of the People’s Republic of China, 
passed on 1 July 2015. The basic idea is to define 
Polar Regions and the global commons as new 
strategic frontiers for China. The Law’s Article 32 
specifies that ‘(t)he State adheres to the peaceful 
exploration and utilization of outer space, inter-
national  seabed  and  Polar  Regions;  guarantees 
secure access (to the regions); enhances capaci-
ties of scientific research, development and utili-
zation (in the regions); strengthens international 
cooperation; and safeguards the security of ac-
tivities, assets and other interests in outer space, 
international seabed and Polar Regions’.16 In or-
der to ‘utilise’ those regions, Beijing knows that 
norm-entrepreneurship is crucial. In the section 
headed  ‘International  Economic  Governance 
System’, the Five-Year Plan states that China ‘will 
take an active role in formulating international 
rules in areas such as the internet, the deep sea, 
the Polar Regions, and aerospace’. 

Norm entrepreneurship 

To justify its participation in Arctic governance, 
Beijing  positions  itself  as  a  ‘near-Arctic  State’. 
But contrary to the UK, which qualifies as such 
based on geographical proximity (it is the north-
ernmost country which does not cross the Arctic 
Circle),17  China  insists  on  the  impacts  that  a 

4

European Union Institute for Security Studies (EUISS)European Union Institute for Security Studies (EUISS)December 2018changing  Arctic  is  having  on  its  ‘climate,  envi-
ronment, agriculture, shipping, trade and social 
and  economic  development’.18  Thus,  despite 
having no sovereignty or sovereign rights in the 
region,  Beijing  has  formulated  a  legal  position 
on  three  key  issues  allowing  the  ‘utilisation’  of 
the  Arctic  Ocean:  the  rights  to  navigation,  the 
access  to  resources  and  the  use  of  those,  and 
creatively  applying  the  UN  Convention  on  the 
Law of the Sea (UNCLOS) to serve its interests. 

Freedom of navigation and innocent passage

The Northern Sea Route (NSR), the Arctic’s sole 
route currently used for long-distance commer-
cial  shipping,  is  a  sub-section  of  the  Russian 
part of the North East Passage, stretching from 
Norway to the Bering Strait. It includes sea wa-
ters  (comprising  internal  sea  waters,  territorial 
sea, a contiguous zone and exclusive economic 
zone)  from  the  Novaya  Zemlya  archipelago  in 
the West, to the Bering Strait in the East. Some 
of  the  NSR  and  the  Northwest  Passage  (NWP) 
sections  are  regarded  by  Russia  and  Canada  as 
internal waters, and not as international straits, 
meaning that no ship can navigate through them 
without  their  consent  (see  Figure  2).  Beijing, 
like  Washington,  has  sought  to  maintain  that 
freedom of navigation (which includes military 
activities) should prevail along the NSR. Beijing 
in  its  Arctic  Policy  white  paper  adds  that  ‘dis-
putes  over  the  Arctic  shipping  routes  should 
be  properly  settled  in  accordance  with  inter-
national  law’.19  Considering  Beijing’s  position 
on  freedom  of  navigation  in  the  South  China 
Sea,  and  on  the  Arbitral  Tribunal  of  UNCLOS, 
China’s  stance  vis-à-vis  the  Arctic  might  give 
rise to scepticism. Thus far the issue of naviga-
tion along the NSR and NWP has not been very 
prominent because as long as the Arctic passag-
es are covered with sea ice, Canada and Russia 
maintain  the  right  to  administer  navigation 
with reference to UNCLOS article 234 – the ‘ice 
clause’.  When  a  warmer  Arctic  Ocean  is  likely 
to  facilitate  commercial  navigation  beyond  the 
contested sections, especially on the NSR which 
is less packed with sea ice than the Canadian ar-
chipelago, a common interpretation of freedom 
of  navigation  (including  for  military  purposes) 
in  the  exclusive  economic  zone  (EEZ)  will  re-
main to be achieved.

Access to resources

In the case of seabed resources, China refers to 
itself  as  a  country  supporting  the  rights  of  de-
veloping countries. While it is the world’s third 
economy in terms of GDP (behind the US and 
the EU), China’s GDP per capita still qualifies as 
part of the emerging market and the developing 
countries  group  of  the  IMF.  As  such,  it  deems 

that it ‘has to work hard to bring all countries, 
particularly  the  developing  countries,  into  the 
rule-making  process  as  equals’.20  This  argu-
ment  is  used  to  support  claims  in  the  Area  of 
the Arctic Ocean as articulated in June 2009 by 
Hu Zhengyue, Chinese assistant minister of for-
eign affairs: ‘When determining the delimitation 
of  outer  continental  shelves,  the  Arctic  States 
need to […] consider the […] common human 
heritage,  to  ensure  a  balance  of  coastal  coun-
tries’ interests and the common interests of the 
international  community.’21  Indeed,  the  ration-
ale behind the creation of the Area was to also 
let land-locked states and developing countries 
benefit to at least some degree from the wealth 
of  the  oceans  (art.  136  of  UNCLOS).  But  if  all 
claims to an extended continental shelf were ac-
cepted by the UN Commission on the Limits of 
the  Continental  Shelf  (CLCS),  only  very  small 
areas would be left for the Common Heritage of 
Humankind (see the lightest blue area in Figure 
2). Decisions made by coastal states on the basis 
of  the  recommendations  of  the  CLCS  are  final 
and  binding  (art.76.8  of  UNCLOS).  However, 
it  is  actually  possible  for  a  distant  state  whose 
coasts are neither opposite nor adjacent to initi-
ate a dispute that would concern the CLCS. For 
now, China is unlikely to engage in such a move 
that would upset Arctic states, but it cannot be 
ruled out that it may consider it in the future. 

Use of resources

Deep sea-bed resources in the Area of the Arctic 
Ocean  (as  well  as  other  oceans),  which  con-
tain  REE  and  also  critical  metals  are  of  special 
interest  to  China.  The  International  Sea-Bed 
Authority  which  administers  the  deep  seabed 
has  estimated  the  potential  value  of  non-living 
resources in the outer continental shelf areas of 
the world to amount to a total of $10,328 tril-
lion. Although the technological conditions for 
extractive  activities  are  not  yet  in  place  in  the 
Arctic, China has already voiced its interest. 

In general, Beijing favours economic use of re-
sources  rather  than  their  preservation.  In  or-
der  to  fulfil  its  obligations  under  UNCLOS,  it 
promulgated the ‘Deep Seabed Law’, which se-
cures  compliance  from  all  Parties  to  carry  out 
activities in the Area in accordance with art.139 
of  UNCLOS  on  the  ‘Responsibility  to  Ensure 
Compliance  and  Liability  for  Damage’.  Yet  de-
spite  its  merits,  the  law  puts  emphasis  on  the 
‘benefit  for  mankind’  rather  than  ‘heritage  of 
mankind’,  which,  according  to  legal  scholars, 
signals a preference for an economic perspective 
rather than conservation.22 

This preference also applies when it comes to liv-
ing resources. Substantive arguments advanced 

5

European Union Institute for Security Studies (EUISS)European Union Institute for Security Studies (EUISS)December 2018Figure 2 | Status of Arctic waters beyond 200 nautical miles from shore

Source: IBRU, Durham University, UK (https://www.dur.ac.uk/ibru/resources/arctic/) 

by China in its Arctic Policy refer to ‘conserva-
tion  in  a  scientific  manner’  and  to  a  ‘rational 
use’  of  resources.23  Both  concepts  lack  clarity. 
The  first  concept  is  actually  a  re-interpretation 
and  weakening  of  the  precautionary  principle. 
The  use  of  the  second  term  has  already  raised 
much concern when discussing fisheries in the 
Antarctic where its meaning is all but clear: the 
Chinese delegation’s statement indicated in 2013 
a clear interpretation of ‘rational use’ as meaning 
an  unrestricted  right  to  fish.24  In  a  legal  sense, 

there  is  actually  no  definition  of  what  ‘rational 
use’ means but its mention is clearly intended to 
blur the distinction between environmental pro-
tection and economic use of resources, and thus 
to re-interpret the concept of ‘sustainability’. 

Implications for EU security 

China’s  Arctic  initiative  has  direct  implications 
for  European  security  –  both  in  terms  of  the 

6

European Union Institute for Security Studies (EUISS)European Union Institute for Security Studies (EUISS)December 2018physical  proximity  of  the  Polar  Silk  Road,  as 
well as because of the many strategic sectors the 
project involves, including energy, space obser-
vation and defence.

First of all, China’s rising economic power along 
the  Polar  Silk  Road  can  contribute  to  the  frag-
mentation of EU political cohesion and under-
mine  its  strategic  autonomy.  In  the  Arctic  and 
elsewhere,  Beijing  has  been  targeting  countries 
and  territories  that  have  been  strongly  affected 
by  the  2008  financial  crisis,  or  that  need  to 
boost  their  economies  to  support  their  respec-
tive political agendas. Chinese investments can 
also  weaken  countries’  political  systems,  as 
could be seen in Greenland after the controver-
sy surrounding the Chinese bid in Kalaallit air-
ports which cost the Greenland government its 
parliamentary majority: some viewed Denmark’s 
financial offer as incompatible with Greenland’s 
path to independence. Chinese investments can 
also influence or coerce the host government to 
adopt Chinese political stands on some issues.

European  companies  are  often  disadvantaged 
compared  to  Chinese  state-owned  companies, 
which  use  governmental  subsidies  to  facilitate 
strategic  acquisitions.  The  asymmetry  can  be 
substantial,  given  that  current  WTO  rules  are 
not necessarily enforced or adapted to contem-
porary challenges. As one of the world’s leading 
economies, the EU can use this advantage to ad-
dress this issue. Supporting EU member states, 
or  possibly  Greenland  infrastructure  projects, 
through the Investment Plan for Europe would 
allow building trust in the Union’s policies and 
ensuring long-term sustainable development. 

Chinese investments in REE and critical miner-
als  extraction,  as  well  as  deep  seabed  mining, 
is  especially  worrying.  Even  if  today  China  re-
spects  the  rulings  of  the  WTO  dispute  settle-
ment  body  on  its  REE  export  restrictions,25  it 
already  controls  the  market  prices.  As  such,  it 
can  thwart  existing  or  future  mining  exploita-
tion  profitability,  as  it  did  with  the  Mountain 
Pass  mine  in  the  US  (which  restarted  in  2010, 
but  then  went  bankrupt  in  2015  before  it  was 
auctioned to a Chinese-led consortium includ-
ing  Shenghe  Resources).  This  consideration 
needs to be factored into any financial calcula-
tions regarding the exploitation of REE reserves 
in the EU. 

Second, while China does not yet have the ca-
pacities to project military power in the Arctic, 
the  potential  that  it  could  use  the  land  infra-
structure, air space observation technologies and 
platforms, or mining resources it invests in the 
EU,  European  Economic  Area  (EEA)  member 
states  and  Overseas  Countries  and  Territories 

(Greenland) for other than civilian purposes is 
real. Investments in seaports along the Northern 
Sea  Route  give  Beijing  the  possibility  to  moni-
tor and control activities in key logistical nodes. 
Airports  can  be  used  to  accommodate  military 
aircraft, as well as to monitor activities in nearby 
strategic  infrastructure  (a  military  base,  for  in-
stance, as is the case with the US military base in 
Greenland).  A  Chinese  owner  could  potential-
ly also exercise control over the air traffic. The 
potential use of space observation technologies 
for military purposes in Europe, strategically lo-
cated between Russia and the US, constitutes a 
further concern.

Last  but  not  least,  the  scale  and  speed  of  the 
development  of  the  Polar  Silk  Road  risks  un-
dermining  environmental  and  social  standards 
upheld  by  the  EU.  When  Chinese  investments 
in  natural  resources  and  in  industrial  projects 
are planned with partners eager to speed up de-
velopment, environmental and social standards 
may be jeopardised. Oil spills, deep-sea mining, 
air and land contamination have important and 
lasting  transnational  impact.  Since  prevention 
will  always  be  more  effective  than  clean-up,  it 
is  important  that  the  legislation  that  applies  in 
the  EU,  and  the  EEA  countries,  is  kept  up  to 
European  and  international  standards,  in  par-
ticular with regard to transparency and sustain-
ability. In the EEZ of Greenland, the government 
of Greenland has not taken responsibility for the 
environment, and Denmark’s implementation of 
the  relevant  EU  directives  does  not  cover  the 
Arctic area.26 This blind spot in the legal cover-
ing of Greenland marine areas is clearly a weak-
ness.  The  value  of  ecosystem  services  that  are 
essential to the ecosystem balance and to the liv-
ing conditions of indigenous peoples in north-
ern Europe and in Greenland needs to be taken 
into consideration. 

Cécile Pelaudeix is research associate at 
PACTE-Sciences Po Grenoble.

Endnotes

1) Senator for Economic Affairs, Labour and Ports of Bremen, 
Template for the Senate Meeting on January 10, 2017, 
“Participation of bremenports as a founding member of a 
development company for the Icelandic harbour project 
Finnafjord”, https://bremenports.de/bremenports-wird-
gruendungsmitglied-der-finnafjord-entwicklungsgesellschaft-ffpd/.

2) Atle Staalesen. “Finland Says New Arctic Railway Should Lead 
to Kirkenes”, The Barents Observer, March 9, 2018, https://
thebarentsobserver.com/en/arctic/2018/03/finland-says-new-arctic-
railway-should-lead-kirkenes.

3) Angus McNeice, “Finland touts ‘Arctic corridor’ tunnel”, 
China Daily, March 2, 2018, http://europe.chinadaily.com.
cn/a/201803/02/WS5a984a41a3106e7dcc13efe8.html.

7

European Union Institute for Security Studies (EUISS)European Union Institute for Security Studies (EUISS)December 20184) Government of Denmark and Naalakkersuisut, “Aftale 
mellem regeringen og Naalakkersuisut om dansk engagement 
i lufthavnsprojektet i Grønland og styrket erhvervssamarbejde 
mellem Danmark og Grønland” [“Agreement between the 
Government of Denmark and Naalakkersuisut about Danish 
involvement in the airport project in Greenland and strengthened 
business cooperation between Denmark and Greenland”], Nuuk, 
September 10, 2018, http://stm.dk/multimedia/10-09-2018_
Aftale_mellem_regeringen_og_Naalakkersuisut.pdf.

5) Kenneth J. Bird et al, Circum-Arctic Resource Appraisal: 
Estimates of Undiscovered Oil and Gas North of the Arctic Circle, 
US Geological Survey Fact Sheet 2008−3049 (Reston, Virginia: US 
Geological Survey, 2008), http://www.usgs.gov.

6) LNG World News, “Novatek Inks Arctic LNG2 Deals with 
Chinese Partners”, 2017, https://www.lngworldnews.com/novatek-
inks-arctic-lng-2-deals-with-chinese-partners/.

7) European Commission, “Greenland’s Raw Materials Potential 
and the EU Strategic Needs,” Memo 12–428, Brussels, June 
13, 2012; European Commission, “Communication from The 
Commission to the European Parliament, the Council, the 
European Economic and Social Committee and the Committee of 
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COM(2017) 490 final, Brussels, 2017.

8) Charles Tuduri et al, “Rare Earth Elements in Europe and 
Greenland: A Geological Potential? An Overview”, 12th meeting of 
the Society of Geology Applied to Mineral Deposits (SGA), 2013: 
12-15.

9) Government of China and Government of Iceland, Joint 
Statement between the Government of the People’s Republic 
of China and the Government of Iceland on Comprehensively 
Deepening Bilateral Cooperation, Beijing, April 15, 2013.

10) The Royal Society, “New Frontiers in Science Diplomacy: 
Navigating the Changing Balance of Power”, Policy Document 
01/10, 2010.

11) Yi Yang, “China-Iceland Arctic Science Observatory 
Inaugurated in Northern Iceland”, Xinhua, October 19, 2018, 
http://www.xinhuanet.com/english/2018-10/19/c_137542493.htm.

12) Dorothee Thiesing and Jill Lawless, “China’s Arctic Ambitions 
Take Shape in Remote Iceland Valley”, Physorg, November 2016, 
https://phys.org/news/2016-11-china-arctic-ambitions-remote-
iceland.html.

13) Jichang Lulu, “Greenland: China Discreetly Launches Satellite 
Ground Station Project”, December 14, 2017, https://jichanglulu.
wordpress.com/2017/12/14/greenland-satellite/.

14) Yusha Zhao, “China One Step Closer to Nuke-powered 
Aircraft Carrier with Cutting-edge Icebreaker Comes On Stream”, 
Global Times, June 22, 2018, http://www.globaltimes.cn/
content/1108021.shtml.

15) People’s Republic of China, “The 13th Five-Year Plan 
For Economic And Social Development Of The People’s 
Republic Of China (2016–2020)”, 2016, http://en.ndrc.gov.cn/
newsrelease/201612/P020161207645765233498.pdf.

16) People’s Republic of China, “National Security Law of the 
People’s Republic of China”, 2015, http://eng.mod.gov.cn/
publications/2017-03/03/content_4774229.htm.

17) House of Lords, Select Committee on the Arctic, “Report 
of Session 2014-15: Responding to a Changing Arctic”, 2014, 
https://publications.parliament.uk/pa/ld201415/ldselect/
ldarctic/118/11809.html.

18) Ming Zhang, “Keynote Speech by Vice Foreign Minister Zhang 
Ming at the China Country Session of the Third Arctic Circle 
Assembly”, Arctic Circle, Reykjavik, October 17, 2015, http://www.
fmprc.gov.cn/mfa_eng/wjbxw/t1306858.shtml.

19) People’s Republic of China, The State Council Information 
Office of the People’s Republic of China, “China’s Arctic 
Policy,” January 2018, http://english.gov.cn/archive/white_
paper/2018/01/26/content_281476026660336.htm.

20) Yi Wang, “China, a Staunch Defender and Builder of 
International Rule of Law”, October 24, 2014, http://en.people.
cn/n/2014/1024/c90883-8799769-2.html.

21) Shijie Zhishi, China’s Perspective on Arctic Matters, 55, 15, 
2009. 

22) Guobin Zhang and Pai Zheng, “A New Step Forward: Review of 
China’s 2016 Legislation on International Sea Bed Area Exploration 
and Exploitation”, Marine Policy, 73, November 2016: 244-255.

23) People’s Republic of China, The State Council Information 
Office of the People’s Republic of China, ‘China’s Arctic 
Policy’, January 2018, http://english.gov.cn/archive/white_
paper/2018/01/26/content_281476026660336.htm.

24) Jennifer Jacquet et al, ‘‘‘Rational use’ in Antarctic waters”, 
Marine Policy, January 2016: 8-34.

 25) World Trade Organisation, Dispute Settlement: Dispute 
DS394. “China, Measures Related to the Exportation of Various 
Raw Materials”, Appellate Body Report circulated 30 January 2012, 
https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds394_e.
htm.

26) Ellen Margrethe Basse, “The EU’s Role as a Facilitator in the 
Development of Maritime Environmental Law in the Arctic: with 
Focus on Offshore Hydrocarbon Activities”, in C. Pelaudeix and 
E.M. Basse, eds., Governance of Arctic Offshore Oil and Gas 
Activities (New York, London: Routledge), 2017: 47-71.

8

© EU Institute for Security Studies | QN-AK-18-013-EN-N | ISBN 978-92-9198-655-2 | ISSN 2315-1110 | doi:10.2815/259764 European Union Institute for Security Studies (EUISS)European Union Institute for Security Studies (EUISS)December 2018