The dragon looks north

China grows hungry for Arctic resources and shipping routes as northern ice melts.

Arctic Meltdown Tour
China has already invested $25bn to build an oil pipeline from Sibera [EPA]

Vancouver, Canada – As the Arctic sea-ice melts, the Dragon looks to the north. China has a voracious appetite for oil, natural gas and minerals – of which the Arctic has plenty. The world’s newest superpower is also the world’s largest shipping nation, and well positioned to take advantage of shorter routes across an increasingly ice-free Arctic Ocean.

There is no unclaimed land available in the Arctic, because Russia, Canada, Denmark, Norway and the United States carved up the region centuries ago. But this fact doesn’t discourage a resource-hungry China, which knows it can buy the access it needs.

Chinese state-owned companies have already invested tens of billions of dollars in Canada’s northern tar sands. Three years ago, the Chinese government lent a Russian company $25bn so that it could build an oil pipeline from Siberia to China, which now carries 300,000 barrels per day.

China is now the world’s largest trading country. The Trans-Siberian Railway has become a virtual conveyer belt carrying Russian raw materials to Chinese factories. Russian oil, natural gas and minerals are also moving eastwards to China via the Northern Sea Route along Siberia’s increasingly ice-free Arctic coastline. And soon, natural gas will be shipped to China from two new liquefaction terminals on Canada’s northwest coast.

China is fully aware of the enormous potential for offshore oil and natural gas development in the Arctic, which holds at least 20 per cent of the world’s undiscovered reserves. But it also knows that most of that oil and gas is in the sedimentary rocks of the continental shelves.


Under the law of the sea, the Arctic countries have jurisdiction over that oil and gas because coastal countries have exclusive rights to any natural resource within 200 nautical miles of their coasts. They may also have jurisdiction over seabed resources even further out – if they can demonstrate scientifically that the shape and geology of the ocean floor constitute a “natural prolongation” of the continental shelf.

China does not contest these rights, because it relies on the exact same rules to support its extensive claims in the South and East China Seas.

Nor is there any need for China to challenge the claims of the Arctic countries. Offshore oil and gas is expensive to find, extract and transport – especially in an extremely remote and often inhospitable region. To access these riches, Arctic countries will need strong markets and vast amounts of capital, both of which China is well positioned to provide.

Beyond the extensive rights of the coastal states, near the centre of the Arctic Ocean, lies an area where the deep seabed constitutes the “common heritage of mankind” and the water column constitutes “high seas”. If the central Arctic Ocean becomes the site of economic activity, China will most certainly be a player.

China was the first country to seek and receive a permit for deep seabed mining from the International Seabed Authority, the regulatory body set up under the UN Convention on the Law of the Sea. The permit concerns copper, nickel, gold and cobalt deposits around a hydrothermal vent 1,700 metres below the surface of the Indian Ocean.

At some point, China might wish to explore the deep Arctic Ocean for similar riches or, more likely, magnesium nodules or frozen gas hydrates.

China is also the world’s largest fishing nation, and the Arctic Ocean is closer than some of the places currently frequented by its distant-waters fleet.  

Coastal states can regulate fishing within 200 nautical miles of their shores, but beyond that distance, regulation only takes place through regional fisheries organisations.

The US is hoping to create such an organisation for the Arctic Ocean before commercial fishing begins there, and China might prove helpful to that effort. China already works well with several regional fisheries organisations – in return for being allotted quotas.

Too often, commentators forget that China is an integral part of our globalised economy. When a Chinese business tycoon recently sought to buy land for a luxury hotel in Iceland, pundits speculated that the Chinese government was secretly planning to build an Arctic shipping port. They never explained why China would bother acting surreptitiously, since any such venture would almost certainly receive the enthusiastic support of the Icelandic government.

Intent on Arctic shipping

Most of China’s oil imports pass through the Strait of Malacca between Malaysia and Indonesia. In Beijing, this strategic weakness is referred to as the “Malacca dilemma”.

In addition, some ships loop around Africa to avoid the pirate-infested approaches to the Suez Canal, while others loop around the bottom of South America because they cannot fit into the Panama Canal. Either way, the extra distance adds additional costs – in fuel, salaries and foregone business.

In late summer, the Northern Sea Route already enables a 10,000-km shortcut to Europe, while the Northwest Passage through Canada’s Arctic islands offers a 7,000-km shortcut to the Atlantic seaboard of the US. With time, a third route may well become available “over the top” across the central Arctic Ocean.

These developments are celebrated in China, where the media refer to the Northern Sea Route as the “Arctic Golden Waterway”. Professor Bin Yang of Shanghai Maritime University estimates that the Northern Sea Route alone could save China a staggering $60bn to $120bn annually.

China already has the world’s largest non-nuclear powered icebreaker, which it uses for scientific research, and is now building a second, smaller vessel.

China already has the world’s largest non-nuclear powered icebreaker, which it uses for scientific research, and is now building a second, smaller vessel.

Chinese companies are also building or commissioning dozens of ice-strengthened cargo ships and tankers, some of them with dual-directional technology that enables them to sail normally on open seas, then turn round and use their propellers to chew their way through sea-ice.

Nevertheless, Chinese shippers will still need the help of the Arctic countries. In the Northern Sea Route and Northwest Passage, Russia and Canada are the only countries able to provide adequate charts, navigation aids, ports of refuge, weather and ice forecasting, search-and-rescue, and a police presence for deterring and dealing with pirates, terrorists and smugglers.

In return, there is every reason to expect that the Chinese will comply with reasonable laws concerning ship safety, navigation lanes, insurance coverage and the provision of crew lists and cargo manifests to coastal authorities.

The Chinese government has so far chosen not to take sides in legal disputes between the US on the one hand, and Russia and Canada on the other, over the status of the Northern Sea Route and Northwest Passage. The US claims they are “international straits”, Russia and Canada claim they are “internal waters”, and China, it seems, just wants to make money.

Snubbed by Arctic countries

China’s laissez-faire approach to Arctic legal disputes has, however, been shaken by the recent actions of Arctic countries.

In 2009, China applied for permanent observer status at the Arctic Council, a regional organisation composed of Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the US. It was a reasonable request, since countries as distant as Poland and Spain had already been accorded that status.

However, the Chinese request came at the same time as one from the European Union, which was caught up in a dispute with Canada over restrictions on the trade of seal products. When Canada retaliated by blocking the EU’s request for permanent observer status at the Arctic Council, China’s application was collaterally suspended – and has remained so ever since.

Then, in 2011, the Arctic Council adopted new criteria for permanent observers, including the condition that they recognise “the Arctic States’ right to administer the Arctic Ocean under the Convention of the Law of the Sea”. China will likely never accept this condition, which as currently worded, implies that Arctic states have the right to administer the entire Arctic Ocean.

In actual fact, China and other non-Arctic countries are fully entitled to navigate freely beyond 12 miles from shore, to fish beyond 200 miles from shore, and to exploit seabed resources that lie beyond the continental shelf.

The Arctic states made a mistake by failing to acknowledge explicitly that their own rights, while extensive, are not unlimited. As it stands, they could hardly have devised a better strategy for stoking Chinese fears about their intentions in the North.

China is respecting international law and has legitimate interests in the Arctic. Its request for permanent observer status should be granted forthwith.

Dragons, even well behaved ones, do not appreciate being snubbed.

Michael Byers holds the Canada Research Chair in Global Politics and International Law at the University of British Columbia in Vancouver. He is the author of Who Owns the Arctic?

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.