As the ice melts, the Arctic's strategic importance sharpens into focus

When Russian president Vladimir Putin visited India earlier this month two announcements regarding the Arctic must have raised eyebrows in China.

First, Putin suggested that Moscow would allow India to have access to Russia’s Arctic shipping lanes, known as the Northern Sea Route, to improve Russian-Indian bilateral relations.

Secondly, Putin announced that Russia would pursue joint development of natural gas fields in the Arctic with India.

Not only were both announcements unusual, they showed that Russia is starting to take China’s newly found interest in the Arctic seriously, and that Moscow sees China’s geopolitical competitor, India, as a potential counter balance in the region.  

Even though China’s closest point to the Arctic Circle is more than 1,600km away, Beijing recently referred to itself as a “near Arctic State” in its recently published white paper on the Arctic.

For the most part China wants to increase access and influence in the Arctic region for economic reasons. It wants to establish a “polar silk road” that will complement its Belt and Road Initiative (BRI) across the Eurasian landmass.  

China has taken great interest in the Northern Sea Route. In 2012, the Chinese icebreaker Xue Long (Snow Dragon in English) became the first Chinese vessel to sail across the North Sea Route to the Barents Sea and has since carried out nine Arctic expeditions.

China also sees India as a competitor to the BRI, so Putin’s recent announcements in New Delhi were probably viewed with concern and suspicion in Beijing.  

The anchor of China’s influence in the Arctic is Iceland—the western terminus of the Northern Sea Route. In 2013, Iceland became the first European country to sign a free trade agreement (FTA) with China.

Underscoring the importance that China places on its presence in Iceland, the Chinese embassy in Reykjavik can accommodate a staff of up to 500 people. The US embassy by comparison has about 70 people. Joint Chinese-Icelandic programs are regularly announced. For example, next week the China-Iceland Joint Aurora Observatory will open, increasing scientific cooperation between the two countries.

Russia has a huge stake in the Arctic and is suspicious of Chinese influence in the region. Half of the world's Arctic territory and half of the Arctic region's population is located in Russia. It is well-known that the Arctic is home to large stockpiles of proven, yet unexploited, oil and gas reserves. The majority of these reserves is thought to be located in Russia.

While Russia has economic interests in the Arctic, especially as it pertains to energy exploration and transit fees from the Northern Sea Route, Moscow’s main focus in the Arctic is security.

While the Arctic region remains peaceful, Russia’s recent steps to militarise the region, coupled with its bellicose behavior toward its neighbors, makes the Arctic a security concern.

Moscow has invested billions in increasing its military capability in the High North. The Arctic-based Northern Fleet accounts for two-thirds of the Russian Navy. An Arctic command was established in 2015 to coordinate all Russian military activities in the Arctic region as Russia has increased the numbers of troops it has permanently based in the region.

Moscow has also opened new, or re-opened old, military bases in the Arctic. Over the past decade, Russian investment in Arctic bases has resulted in 14 operational airfields in the Arctic along with 16 deep-water ports.

As long as Russia’s troops remain on Russian territory it is Moscow’s prerogative to place its military assets where it sees fit. However, considering Russia’s military adventurism in places like Georgia, Ukraine and Syria the international community should keep a close eye on Russian activities in the Arctic.

While there is potential for more shipping, energy exploration and economic activity in the Arctic, China and Russia need a dose of realism about the Northern Sea Route.

The shipping lanes are a considerable distance from search and rescue facilities so safety is a major concern. When ships use the Northern Sea Route, they often rely on support from Russia, especially in the form of icebreakers, which increases shipping costs.

Ice is not melting as fast as expected and this has had an impact on shipping. Last year only 5.5 million tons of goods were shipped using the route. By comparison more than 91 million tons of goods transited the Suez Canal.

Furthermore, it is often forgotten just how large Asia is reality. Using the Northern Sea Route certainly makes a trip between Rotterdam, Netherlands, and Yokohama, Japan, 30 percent shorter than using the Suez Canal route. However, a journey between Rotterdam and Shanghai is only 8 percent shorter.

Considering all of the risks and costs associated with using the Northern Sea Route, it remains to be seen if such a small difference in distance is really worth it. Right now the numbers suggest it is not.

As for the other Arctic actors, the US, Europe and NATO are not ready to deal with Chinese and Russian activity in the Arctic.

NATO has no agreed strategy and because of a dispute between Canada and Norway refused to even use the word “Arctic” in official documents. The Arctic barely features on the policy radar in Washington DC.

The whole US government has only two icebreakers. Russia has more than 40, six of which are nuclear powered. The EU is divided internally among its members as to the role of Brussels in the Arctic region.

The Arctic will increasingly become a strategically important region for many of the world’s major powers. The possibility of decreasing ice coverage during the summer months, and advances in technology, mean that shipping, natural resource exploration, and tourism could increase economic activity.

As Russia and China compete over economic and security influence across Eurasia, the Arctic is a region for global policymakers to watch.