NEW REPORT: Our friends in the North: UK strategy towards the Arctic
A Beijing to Britain briefing note
Today the Lords International Relations and Defence Committee publishes a new report examining the UK’s strategy towards the Arctic. ‘Our friends in the North: UK strategy towards the Arctic’ is the culmination of several months of witness evidence, discussions and hearings. It follows the Government’s Arctic Strategy published last year.
The report features a significant chapter on China and over 100 mentions of the country: what are its ambitions, who is Beijing working with, what assets does it have in the region, and how should the UK respond?
Today’s Beijing to Britain briefing note breaks down the main points from the report, contextualising its recommendations and adding insight you can action.
Who’s on the Committee?
The Members of the International Relations and Defence Committee are:
Lord Anderson of Swansea: long-serving Labour Peer, sits on Transatlantic Trade APPG
Lord Robertson of Port Ellen: served as the 10th Secretary General of NATO from 1999 to 2003 and was the UK's Secretary of State for Defence from 1997 to 1999, initiated Labour’s 1997/8 Strategic Defence Review
Lord Ashton of Hyde (Chair): chaired the Committee since January this year, known for his pithy answer explaining to a fellow peer what an algorithm is
Lord Soames of Fletching: Conservative grandee and grandson of former Prime Minister Winston Churchill
Lord Boateng: Chief Secretary to the Treasury in May 2002, and later served as the British High Commissioner to South Africa from 2005 to 2009
Lord Stirrup: served as the Chief of the Defence Staff from 2006 until his retirement in 2010
Lord Campbell of Pittenweem: long-serving Liberal Democrat member and Peer
Baroness Sugg: former Special Advisor with deep knowledge of foreign policy, former FCDO Minister
Baroness Coussins: an adviser on corporate responsibility, sits on United Nations APPG
Lord Teverson: previously oversaw a Committee report on the Arctic, published in 2015
Baroness Morris of Bolton: came to The Lords under Iain Duncan Smith
Lord Wood of Anfield: former advisor to Prime Minister Gordon Brown, covering foreign policy
The Committee argues the following:
The Arctic is rapidly changing thanks to global warming, which will open new trade routes, but also new potential fronts for geopolitical tension; the UK’s positioning in the region must reflect these changes
Following a costly illegal invasion of Ukraine, Russia may turn to China for investment needs, prompting China to use this as leverage to expand in the Arctic, but more study is needed of the bilateral
The UK Government needs to update its planning to account for this, including the possibility “that China could in future seek to establish a military presence in the Arctic.”
The recurring theme that underpins this report is climate change. The observations are blunt: “we know that all climate scenarios anticipate that the central Arctic Ocean will be largely ice free in summer by 2040–45.” The disappearing ice will open new frontiers for critical minerals mining, mass fishing and tourism, all of which will need to be managed. The Committee also believes it could change the dynamic of how geopolitical powers utilise the Arctic. To this end, it recommends the UK takes a leading role in negotiating a new Polar Code, and rejoins the Agreement to Prevent Unregulated High Seas Fisheries in the Central Arctic Ocean at the first opportunity.
Moving to the UK-China bilateral, a number of experts and industry veterans gave evidence to this inquiry, and the Committee tries to reflect on their agreements and disagreements. Many of these touch on China’s role in the region and try to separate genuine regional concerns from wider vague fears. For example, how far should the Government separate Chinese political rhetoric from actual concrete action? What are the current assets China has that could end up as dual-use?
Ultimately two things are clear: the United Kingdom needs to factor in and monitor China as a player in the region, and more critically, needs to pay close attention to Sino-Russian ties.
Key mentions of China
The role of China
“The 2023 Integrated Review Refresh identified China’s deepening partnership with Russia as a development of particular concern for the UK. One of the areas in which there could be closer Sino-Russian co-operation is in the Arctic. At present, China’s involvement in the Russian Arctic has been focused primarily on joint ventures in the hydrocarbon sector. Russia’s leadership wishes to retain firm control over its sector of the Arctic. However, witnesses suggested that power dynamics could change as a weakened Russia turns East to meet its investment needs, providing China with increased leverage and influence in the region.”
On China’s interest in the region
“China’s interest in the Arctic has increased over the past decade. In 2013, along with eight other countries, it became an observer state of the Arctic Council…In January 2018, China published its first Arctic policy white paper setting out its ambitions in the region, in which it described itself as a “near Arctic state”. The paper devotes substantial attention to the opportunities created by Arctic shipping for increased maritime activity. In the same year, the country launched its first domestically built diesel-powered icebreaker. Russia and China have announced the aim of establishing a “Polar silk road” connecting China with Europe via Russia’s Northern Sea Route as part of China’s wider Belt and Road development initiative. In a speech in Hobart, Australia, in 2014, China’s President Xi Jinping stated that due to “profound changes in the international system” and China’s unprecedented economic development, China would soon be “joining the ranks of the polar great powers”
“Mads Qvist Frederiksen, the director of the Arctic Economic Council, told us that China’s current economic footprint in the Arctic is limited. He noted that in 2022, the RAND Corporation, a US think tank, sought to map out China’s economic role in the Arctic and concluded there was currently little Chinese investment in the region.”
“We heard that at present there is no evidence of China seeking to establish a hard power presence into the Arctic. Mathieu Boulègue told us that to date China is “testing the water” with soft-security operations, such as co-operation with Russia on search and rescue and joint constabulary operations.”
On China gathering potentially useful economic data
“We heard that China has been very engaged in gathering data on emerging sea routes in the Arctic.151 While noting that China’s research initiatives could serve a dual civilian-military use, the RAND Corporation told us that there are benefits to co-operation with China on economic development and climate change “where this is done on and equitable basis and with appropriate safeguards for national security.”
On Chinese versus Russian views
“In other regions, China has tended to push back against international norms that it sees as constraining its interests. Defence analysts in Norway noted that while Russia had an incentive to maintain the current governance arrangements in the Arctic, which broadly favour its interests, the incentives for China to do so were less clear”
On new shipping routes
“Shipping routes through the Arctic offer a significantly shorter distance between Chinese ports and European markets. They also potentially provide a strategic alternative for Chinese ships to avoid maritime chokepoints in the Suez Canal and the Strait of Malacca…However, the operational challenges and cost of transit shipping through the Northern Sea Route, which runs along the northern coast of Russia, remain high. [One expert witness] cautioned that it was important to distinguish between “the rhetoric, the very high-level conversations between leaders, and what is actually happening, especially on a company-to-company level”. For example, the scale of transit shipping through the Northern Sea Route has been modest to date, not exceeding 25 vessels in any single year. Moreover, Chinese companies are wary of exposure to Western sanctions— in 2022 there were no transits at all through the Northern Sea Route. [The expert witness] explained: “The main shipping concern in China, COSCO, has in essence said that it is not going to be using the Northern Sea Route for the time being under current geopolitical circumstances.
On dual use technology and routes
“Arctic states are paying increased attention to the potential dual-use nature of Chinese research and scientific activity in the Arctic. Experts in Norway told us that the government had “no illusions” about the dual-use potential of Chinese polar research. However, the Norwegian government noted it had robust measures in place to ensure that research centres on Svalbard established by Parties to the Svalbard Treaty were not used for other purposes.”
“We heard that there has been a general pushback against Chinese investment by the Arctic Seven. Mr Lapsley told us that the UK’s Arctic allies are now “very attuned to” the risks posed by China’s employment of dual-use technology. Dr Lanteigne told us that of the many projects that China has put forward over the past five to seven years, “very few of those have come to fruition”. This has reflected both strategic concerns, as well as high costs and environmental risks.”
On Chinese investments in Russian assets
“China’s investment in the Russian Arctic has expanded significantly since 2014, when Western sanctions were first imposed on parts of the Russian oil and gas sector. China is the leading foreign investor in the development of major hydrocarbon projects in Russia’s Arctic. In January 2014, CNODC, a subsidiary of the China National Petroleum Corporation, became a 20% stakeholder in Yamal LNG, a giant gas field in northwest Siberia.169 In 2019, China’s CNOOC and CNODC each acquired a 10% stake in Arctic LNG 2 on the Gyda peninsula in Siberia. For the moment, Western sanctions have led the companies to suspend their involvement in the project. Nevertheless, many witnesses expected Russia’s economic isolation from the West to lead to greater Chinese involvement in the Arctic in the future.”
On the need for closer analysis of Sino-Russian ties
“The Russia-China bilateral relationship has deepened as both countries’ relations with the West have become more adversarial. In February 2022, shortly before the start of Russia’s invasion of Ukraine, Russian President Vladimir Putin and Chinese President Xi Jinping declared that the friendship between the two states had “no limits” and there were “no ‘forbidden’ areas of co-operation.”
“The Sino-Russian partnership is likely to become increasingly asymmetric. Western sanctions on Russia in response to its invasion of Ukraine have increased the country’s dependence on China as a supplier of technology and finance. Captain Bisen highlighted the strengthening of the trade relationship between Russia and China: “The trade between Russia and the share of rouble and yuan mutual commission transactions has now risen to 65% and continues to grow. The bilateral trade has grown by 30% in 2022, setting a new record of $185 billion and aiming to surpass $200 billion in 2023. This is a real cause of concern.””
“Dr Elana Wilson Rowe of the Norwegian Institute for International Affairs noted that if Russia and China’s co-operation in the Arctic moved from the economic realm into the security realm, this would be a “game-changing moment” and this is a dynamic that must be closely tracked. She observed that there was at present a “very small accumulation of datapoints” of SinoRussian security co-operation in the Arctic. For example, in September 2022 the US Coast Guard encountered Russian and Chinese military vessels in the US EEZ in the Bering Sea.”
“Many stakeholders we spoke to on our visit to Norway and Finland drew attention to the April 2023 Russia-China memorandum of understanding on strengthening maritime law enforcement co-operation between the Chinese Coast Guard and the FSB Border Guard Service (Russia’s border guards and coastguard are under the authority of the FSB, the internal security service). To date, there has not been any Chinese military or coastguard activity in the European Arctic. Any Chinese military or coastguard presence in the Barents Sea would be perceived by the European Arctic states as a serious security challenge.”
In a previous note to paid clients in July, we observed the following:
On a bilateral level, the United Kingdom could look to engage with China on various environmental and sustainable development initiatives in the region, on the understanding that doing so must take place with maximum transparency. As the critical minerals race continues to heat up, Britain could play an active role in making sure the highest standards are applied to any mining or extraction.
This report confirmed our prediction and adds further useful detail to the wider conversation about how the UK should respond to China’s plans for the region. Many of the observations made around shipping are worth noting closely - for example, if a new route is opened and scaled, tensions could be eased on the Strait of Malacca, the small narrow in the Indo-Pacific that acts as a severe chokepoint for Chinese imports. A new route could reduce Beijing’s exposure to blockade here, and therefore its strategic calculations.
Taking a wider look at the report’s recommendations, the Government will be pleased to see the inclusion of pushing for closer ties on scientific research. As readers will know, much of the ‘Engage’ pillar of the UK’s China Strategy has been approached with scrutiny and scepticism, but scientific collaboration is an area the Government has been weak to explain. This may give them the cover to start talking about specific examples more freely.
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