After Russia’s annexation of Crimea in 2014, Western sanctions dried up existing capital and technology pools for Russian energy projects in the Arctic. The sanctions targeted Western companies cooperating with Russian energy firms and investing in Russian Arctic projects, paving the way for Chinese state firms to engage. The Kremlin’s need for foreign capital places Beijing in a position of power in the Arctic, but Russia is wary of Chinese investment. Moscow is attuned to both the potential and pitfalls of doing business with Beijing: Overreliance on China to fulfill Russia’s economic security agenda in the Arctic could increase Beijing’s regional footprint.
Russia and China’s Arctic partnership is not an alliance—it is driven by business. Despite mutually beneficial interests in the region, commercial realpolitik is at the heart of their engagement. For now, the partnership in the Arctic navigates existing fault lines, such as Beijing’s failure to acknowledge Russia’s annexation of Crimea and Moscow’s nonalignment in the developing India-China conflict. Any regional cooperation is due to their shared interest in maintaining domestic stability. Long-term economic development ventures and the viability of non-Western multilateral bodies, such as the Shanghai Cooperation Organisation, are critical for their shared vision of world order.
Both Russia and China have a strategic interest in the resource bounty of the Arctic, but most known oil and natural gas deposits fall within the delineated exclusive economic zones (EEZ) of the Arctic-rim states, according to the United States Geological Survey. In this sense, Beijing is constrained by international law. But China has set its sights on the international waters of the Arctic Ocean, which it sees as global commons. This understanding underpins Beijing’s Arctic identity project: On this basis, China considers itself a “near-Arctic” state.
By virtue of its geography, Russia is the largest Arctic stakeholder, accounting for most of the region’s natural gas and oil reserves. As stated, these resources fall well within Moscow’s EEZ—with access and exploitation reserved under international law for Russia. As a result, suggestions of so-called resource great games in the Arctic are inaccurate. The Arctic cannot host a race for resources because the winners are largely already determined. The vast resource potential of the Russian Arctic EEZ is the nation’s future economic base, and Moscow will protect its energy ventures as national security assets.
China and Russia do have a natural affinity in terms of energy security. Beijing’s energy appetite is insatiable, and it is committed to an import diversification strategy from Africa to the Arctic. Climate change is making Russia’s Northern Sea Route easier to navigate year-round, offering Beijing access to Russian Arctic resources—primarily liquefied natural gas—that is quicker and cheaper than other transport corridors. In 2012, Vladimir Putin, then Russia’s prime minister, said, “I am convinced that China’s economic growth is by no means a threat, but a challenge that carries colossal potential for business cooperation—a chance to catch the Chinese wind in the sails of our economy.” Russia has certainly caught the wind in the Arctic, welcoming capital injections from Beijing for developing the Northern Sea Route and building infrastructure such as icebreakers, and accepting Chinese stakes in Arctic energy ventures.
Polling shows that Russians are increasingly wary of China.
Such commercial deals suggest warming ties, but the Arctic partnership should be seen in terms of the Russian proverb, “Trust, but verify.” Putin and Chinese President Xi Jinping are cautious, as evidenced by the protracted amount of time it takes to ink bilateral deals. Russia and China’s relationship is fraught with historical resentment and some mutual suspicion—and not just among the political elites. This is more apparent on the Russian side than on the Chinese side: For Beijing, the relationship is more or less colored by indifference. But polling shows that Russians are increasingly wary of China, with their favorable view of Beijing falling from 72 percent in 2019 to 65 percent in 2020.
The Russian Arctic gas giant Novatek has limited Beijing’s influence: China’s state entities are unable to hold controlling stakes in joint Arctic ventures such as its Yamal LNG project, which will inject 16.5 million metric tons of liquefied natural gas into the global market. The China National Petroleum Corporation holds a 20 percent stake, China’s Silk Road Fund has 9.9 percent, France’s Total holds 20 percent, and the 50.1 percent balance remains with Novatek. There is no indication that Moscow will deviate from this approach: In Novatek’s second joint venture, it holds a 60 percent stake, Total has 10 percent, a consortium of Japanese firms holds 10 percent, and Chinese firms collectively hold 20 percent.
Frictions over their respective positions in a multipolar system are reflected in Russia and China’s Arctic engagement. The region’s sole governance institution, the Arctic Council, put China’s Arctic observer application on the back burner for years, as both Russia and Canada were wary of the internationalization of the Arctic. In 2013, China became a formal observer under new detailed criteria: Observer states must “recognize Arctic States’ sovereignty” and the “extensive legal framework” that applies to the Arctic Ocean, “including, notably, the Law of the Sea.” Beijing signed up to an international agreement that in effect requires acceptance of Arctic-state sovereignty, including delineated maritime zones.
Moreover, some disconnect remains in Russia and China’s Arctic coordination. Beijing’s 2018 Arctic Policy contrasts with its obligations as an Arctic Council observer. China appears to adhere to the management of Arctic shipping routes according to the United Nations Convention on the Law of the Sea, but the 2018 policy raises tension with Russia over Article 234, known as the ice rule, which grants coastal states special authority to regulate ice-covered areas within their national jurisdiction. As climate change decreases year-round ice coverage, Beijing is likely to push back against Moscow’s use of Article 234 and seek free transit of the parts of the Northern Sea Route within international waters.
In June, Moscow accused one of its leading Arctic scientists, Valery Mitko, of spying for Beijing. Mitko is charged with treason for handing over classified information on Arctic research and submarine sensor technology to China. But perhaps more telling is the way that both countries have hushed up the incident, with neither formally commenting on the arrest. For now, Beijing and Moscow appear to agree to disagree—so long as the Arctic natural-gas business is booming.
Beijing and Moscow appear to agree to disagree—so long as the Arctic natural-gas business is booming.
Beyond the Arctic, the coronavirus pandemic has exacerbated existing fault lines in the Russia-China relationship. Bilateral competition to secure influence in Southeast Asian nations has stepped up. Moscow’s recent coronavirus response management effort involved health care assistance and the push to shore up support in the region for a multilateral approach to future pandemics. Further soft-power competition has emerged as both Beijing and Moscow have raced to provide European nations with masks and ventilators.
On balance, China engaging in the Arctic in a mutually beneficial partnership with Russia is probably in Western interests, as long as Beijing is somewhat constrained by its own agreements with Moscow. It is doubtful that Western stakeholders could muster the resources to address two assertive states in the Arctic. The past decade has emboldened Moscow, and it may be difficult to coax it toward engagement with the West.
Should Russia stay its course, any deeper engagement with Beijing will ultimately be driven by commercial interests. It is hard to foresee an alliance of equals emerging from this period of strategic coordination in the Arctic.
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