On 15 March 2013, China and Iceland signed a bilateral free trade agreement (Ministry for foreign affairs, Iceland). This agreement was signed three months before the Republic of China became a “permanent observer”of the Arctic Stephen Blank, “China’s Arctic strategy“, The Diplomat, 20 June 2013), while the “Snow Dragon”, the first Chinese icebreaker, has already made five trips in the Arctic, in 1999, 2003, 2008, 2010 and 2012, at which occasion it sailed the Northern Sea Route.

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This political and economic move by Beijing reveals a deep evolution of the grand strategy of the People’s Republic of China, as well as the shifting balance of power in the north-Atlantic region and in the Arctic.

Over the last twenty-five years, with a high rate of industrial development, combined with the emergence of a consumerist middle-class, a rapid urbanization, and a very high growth rate, China has become a major attractor for commodities and food (Michael Klare, The Race for what’s left, 2012).

This growth rate and the related national effort of extraction from the clutches of extreme poverty, under-development, and deep insecurity inherited from more than a century of civil and international warfare and violent politics, has become the new basis of the Chinese national cohesion and of the legitimacy of the political authorities, mainly the Communist party and the government (Loretta Napoleoni, Maonomics, 2011).

The Chinese foreign policy is supporting the domestic policy of development and material enrichment of the population, by finding abroad means to support the Chinese national project. This includes creating zones of influence, which help to sustain the economy, while projecting the Chinese influence in order to protect the “Middle Kingdom’s”global interests (Quynh Delaunay, Naissance de la Chine moderne, L’empire du milieu dans la mondialisation, 2014).

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The continuum established between the “Long March” of contemporary China from poverty and insecurity towards wealth and power is what we call here the “Chinese grand strategy” (Orville Schell and John Delury, Wealth and power, China’s long march to the twenty-first century, 2013).

It would be easy to understand the Arctic strategy of China, and the related free trade agreement with Iceland, solely through this point of view. However, the political, economic, strategic and infrastructural projection of China in the Arctic also reveals a shift in Beijing’s grand strategy, as it combines the drastic changes known by the geophysics, with the geopolitics and strategies of the Arctic.

Chinese Arctic pivot or Icelandic Asian pivot?

The signature of the free trade agreement between Iceland and China did not make the headlines, despite the fact that it is a major strategic shift of the North Atlantic balance of power. In effect, Iceland is not only the first European country to sign a free trade agreement with China (Forbes, “The four drivers of Beijing’s Arctic play and what the world needs to do“, 4 March 2014) but also the first NATO country to do so. This must be added to the fact that Iceland is a member of the Arctic council, alongside Denmark and Greenland, Finland, Norway, the Russian Federation, the USA and Canada and the Faroe islands.

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By signing this free trade agreement, the Icelandic government is de facto supporting the emergence of China as an Arctic power, thus acknowledging and supporting the diversification of the major players in the North Atlantic and Arctic power games (Charles Emmerson, The Future history of the Arctic, 2010).

In other terms, China appears as a partner and a strategic one as valid and Isnet93legitimate as the United States, NATO, the Arctic Council and the European Union, which combined influence had been defining the international distribution of power in the area (Emmerson, ibid) until the signature of the Iceland-China agreement.

One could say that the Icelandic government, which is under tight popular scrutiny since the economic choices of previous governments have almost led the country to bankruptcy with the onset of the financial crisis in 2008 (Simon Bowers, “Iceland rises from the ashes of banking collapse“, The Guardian, 6 October 2013), is looking for a strong ally, outside its “natural” sphere of influence.

It is striking to see that these new economic and political relations between the People’s Republic of China and the Republic of Iceland take place at a moment of such disarray for Iceland, when the population felt such a degree of economy insecurity it triggered the most important wave of emigration since the end of the 19th century (Bowers, ibid). China, its growth rate and its worldwide influence thus appear as a legitimate, and, probably, more secure actor and partner than others.

Feeding and empowering the Chinese people

This Icelandic need for economic security meets the political, strategic and economic needs of China. Beijing started asserting that China was a “near Arctic country” a few years ago. This remarkable expression is supported by a strategy aimed at legitimizing the presence of China in the Arctic, especially in the Atlantic area (Arthur Guschin, “Understanding China’s Arctic policy“, The Diplomat, November 14, 2013). As rear Admiral Yin Zhuo, quoted by Elisabeth Economy (ibid), states:

“Arctic belongs to all the people around the world, as no nation has sovereignty over it …China must play an indispensable role in Arctic exploration, as we have one fifth of the world’s population.”

2008_Summer_Olympics_torch_relay,_ShenzenThis “demographic-democratic” demonstration goes with the fact that one billion and three hundred million people, among which has emerged a middle and consumerist class of 256 million of people, need more and more commodities, food and energy (Klare, ibid) to maintain its domestic dynamics of successful economic development.

The global “Chinese power of need”

This creates what we co call here the global “Chinese power of need”, which determines the necessity for Chinese political authority to find resources on the global scale (Michael Klare, Rising powers, shrinking planet, 2008).

This quest for resources, richness and influence is now combined with the way international and strategic relations currently interact with climate change and the global resources competition, these main contemporary drivers of change.

The Arctic attractor

These strategic shifts are being driven by the way global warming is impacting the whole Arctic region. “The summer melting of the ice is lengthening and the whole process is sustained by what some climatologists and glaciologists call the “Arctic death spiral”. If in 1978 the ice sea surface at the end of summer was covering 7.2 millions km2, it sharply declined since then. Its surface was of only 5.3 millions of km2 in 2005, 4.9 in 2007, and 3.6 in 2012. The process is not linear, and shows ups and downs, but the trend is clear: in summer, arctic sea ice melts quickly, on a massive scale, and the phenomenon (Valantin, “The Arctic power race: the new great game“, Red (Team) Analysis,  2013).

Indeed, the current climate warming of the Arctic region, which could make new energy and mineral resources exploitable, combined with the Icelandic 640px-20090415Reykjavik6106fishing and energy industry, turns the small Atlantic/Arctic country into a powerful attractor for China (Linda Jakobson, “China prepares for an ice-free Arctic”, SIPRI Insights, 2010). Reciprocally, signing the economic equivalent of a strategic alliance with the new Asian world power helps Iceland to establish itself as a real player in the Arctic, after having gone through a “near economic collapse”collective experience.

In other terms, Iceland identifies China as a possible support for its economic security and its development, while China is starting to implement its grand strategy in the Arctic. This strategy is designed with a deep understanding of the changing spatial nature of the Arctic, rooted in the sense of space developed by the Chinese civilization (Marcel Granet, La Pensée Chinoise, 1934). For China, the Arctic was not, until the last ten years and the accelerating warming, a portion of geographic space that could neither be used nor reached because of its extreme character defined by the intense cold, the quasi-impossibility to cross the icecap, and very violent weather, until the first years of the twenty-first century saw the accelerating rate of warming and melting of this huge area.

The warming of the Arctic opens new sea roads for China, through the Northern Sea road between the Bering Strait and Europe, which is 16000 kilometers shorter than the current ones (Guschin, ibid), along the Siberian Archipelago, or through the Northwest Passage. It could turn Reykjavik into a major harbor between Atlantic countries and Asian ones, at least during the summer. So, global warming changes the nature and the political and strategic status of the region, making it a potential “near China” space, where the Chinese influence/attraction can unfold itself.

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Furthermore, the Arctic could contain more than 13% of the world’s undiscovered oil and 30% of the undiscovered gas reserves, other important mineral deposits and fishing potential (Guschin, ibid). The warming and melting of the region could turn these deposits into extractable resources. Given the needs of China, being able to intervene in this space and develop it could become a major strategic issue in the next five to ten years, especially because of the international competition that unfolds in the area, and because of the effects of climate change on mainland China.

How China develops its spatial grand strategy on the whole Arctic area in a time of climate change and of a multilateral militarization of the region (Valantin, ibid), remains to be seen.

To be (soon) continued.

Dr Jean-Michel Valantin leads the environment and security division at The Red (Team) Analysis Society.

Featured image: Researchers studying snowpack on the drift ice of the Arctic Ocean during Chinese CHINARE expedition, 30 September 2011, by By Timo Palo (Own work) [CC-BY-SA-3.0], via Wikimedia Commons.