Red Waves in the Blue Arctic: Expansion of Chinese Trade Footprint in the High North: By Delna Rajesh

Updated: Jun 30

Guided by Commodore R S Vasan IN (Retd), Director General, C3S

Image Courtesy: MIT

Article 23/2025

Introduction

China, a global economic power, has shown keen interest in the Arctic region and has defined its well thought out objectives in the white paper. The Polar Regions are very significant to them as an emerging superpower with economic and strategic interests that extend beyond the Asian-Pacific area. It has also strengthened their relationship with Arctic states such as Iceland and Greenland to achieve their ambitions. China’s investment in icebreakers and submarines reflects its strategic intent to control the maritime routes of great significance in the coming decades. The melting of ice sheets in the Arctic due to climate change has a significant contribution to the growing interests of China in the Arctic. This will create an easily accessible sea route and huge savings for them. The Transpolar Sea Route is a breakthrough for its maritime trade. China is paying close attention to the strategic implications of this future waterway more than any other country on the globe. The White Paper released by China in early 2018 prioritizes “Polar Silk Road” that connects China with the West which is planned to integrate with the ‘Belt and Road Initiative’ (BRI). China calls itself a “Near Arctic State”( though not endorsed by other members of the Arctic Council) and the observer status in the Arctic Council to support its ambitions in the region. This research aims to explore China’s trade/strategic ambitions and its challenges in the Arctic region. This research argues that China’s strategic and diplomatic engagement in the Arctic region reflects to expand its global economic footprint, to reshape traditional sea routes and to influence in Arctic governance.

China’s 2018 Arctic Policy White Paper highlights its interest in the Arctic and describes itself as a “Near Arctic State”. It agrees to follow international laws of UNCLOS, supports peaceful use of the region and promotes scientific research, safety and environmental protection in the Arctic region. This policy integrates Arctic development as part of the Belt and Road Initiative (BRI) and China’s intent to stay active in the Arctic region. The Brookings Institution report (2021) “Northern Expedition: China’s Arctic Activities and Ambitions” by Rush Doshi, Alexis Dale-Huang and Gaoqi Zhang (2021) focusing on China’s activities and ambitions across the region. The report also conveys the seriousness of China’s aspirations to become a “Polar Great Power”. China supports existing Arctic governance like the Arctic Council publicly but complains about them privately. It also discusses China’s increased military profile in the region and the resistance it faces from the U.S allied Arctic states.

There are some limitations in empirical data which is needed to evaluate the real world impacts of these projects. Tiago Tecelão Martins (2023) in “Arctic Ambitions: China’s Engagement with the Northern Sea Route” from The Diplomat explores China’s strategic involvement in the Arctic in collaboration with Russia to develop the “Northern Sea Route” as an alternative maritime route to Suez Canal and Strait of Malacca. Although China and Russia have formed a partnership by shared concerns about US global dominance, their ambitions could eventually clash. This agrees with the idea that China is motivated by the availability of resources and faster and stable maritime routes, but it seems to have not much support except for the casue of promoting trade and alternate routes.

Camilla T.N Sorensen (2024) article, “The Polar Regions as New Strategic Frontiers for China”, discusses China's expanding trade ambitions in Polar Regions. China views this Arctic and Antarctic as “new strategic frontiers” because of its future geopolitical vulnerability. This article also discusses China's self-identification as “Near Arctic State” that is still controversial and also touches upon China’s cooperation with Russia. China’s approach to securing resources is a long term vision, they won’t get immediate result. This article paid little attention to the socio environmental impact and the response of Arctic States on China’s activities. Sylvie Zhuang(2025) in "Warming US-Russia ties could put China’s Arctic ambitions on ice, experts warn“ from the South China Morning Post explores China’s Arctic Policy articulated in White Paper 2018 which mentions them as a Near Arctic State. China has become less aggressive and now focuses more on science and Polar research. Some experts think China’s interest is shrinking but others believe it has long term goals because of its inclusion in the 14th Five Year Plan (2021-25). Russia can’t completely avoid China, as Russia is stuck in a war in Ukraine its dependence on China is more. The cooperation with Russia is essential for them to fulfill their Arctic ambitions. This literature is not mentioning the legal challenges to China. The return of Mr.Trump to the White House may introduce some uncertainties for Arctic strategy.

Shift from Traditional Sea Route to Arctic Sea Route

China’s interest in the Arctic sea route is evolved by a combination of economic and strategic factors. China’s maritime trade with Europe was completely depending upon traditional routes like the Suez Canal, Strait of Malacca and Panama Canal. These routes are always vulnerable to geopolitical tensions, control from rival powers and blockades. The Strait of Malacca is located between Malaysia and Indonesia and has Singapore to its east. This route holds a significant position in global trade. 80% of China’s imports and exports pass through this strait. This narrow path could be easily blocked by rival nations of China. As an ally of the USA and India, Singapore can be influenced by them. It would severely affect China’s economy. This risk is known as “Malacca Dilemma”. The indirect dominance of the US over the Suez Canal has the ability to affect global trade. The USA maintains a strong military presence in the West Asia and Red Sea region. About 60% of the trade between China and Europe passes through the Suez Canal. If any blockade or disruptions occur from the part of the USA it will delay shipments and affect the energy imports from Africa and West Asia.

China can reduce its dependence on traditional sea routes by using the Arctic Sea route. The Northern Sea Route is very convenient, which offers a shorter path to Europe, reduces distance by 30-40% and reduces shipping time by 15 days. This results in less fuel consumption, cost savings and diversifying global trade corridors. The Northern Sea Route helps China to gain greater control over trade logistics and develop trade routes like Polar Silk Road under Belt and Road Initiative. The melting of ice sheets in the Arctic due to climate change opens more accessible sea routes during summer months. The Arctic not only provides an accessible sea route but also this region is rich in natural resources and minerals. China positions itself as an important actor in the region by investing in Arctic infrastructures like ports, ice breakers, research stations etc. and forming partnerships with Russia and other Arctic countries.

Response of Arctic states to China’s interests in the region

China’s increased strategic and economic involvement in the region is shaped through the Belt and Road Initiative (BRI). The Polar Silk Road is facing mixed reactions from the Arctic states. Some countries support Chinese investments while others are increasingly aware about its long term ambitions. Russia is open to Chinese involvement, especially in energy and shipping projects. Russia’s Arctic policy aims to commercialize the region through oil and gas exploration and creation of transportation corridors. China’s wish to expand its presence in the Arctic in collaboration with Russia does face legal and political challenges.

Russia as an Arctic state retains control over its own Arctic territories and may limit China’s influence. The non- Arctic status of China and the restrictions from the UNCLOS limits its role in the Arctic decision making . Meanwhile Chinese investments in the Nordic countries increase over time. Its participation in the Arctic development in infrastructure, technology etc. gives economic benefits to Nordic states. They also face resistance from the Arctic states like Norway and Sweden which are the allies of the United States. The United States tried to limit China’s influence in the Arctic through pressuring allies to reject Chinese investments as its attempt to mine in Greenland. They denied China’s request to modernize its airport infrastructure which then turned to Denmark. This move backed by the United States had a clear political intention of President Trump to annex Greenland which is rich in numerous Earth elements.

The strategic and resource competition between China and the United States in the Arctic has opened new opportunities to Arctic states. China positioned itself as a key stakeholder in the region by investing in Arctic infrastructure like ports, icebreakers, research stations etc. The Chinese investments in the region compelled the United States to pay more attention to the Arctic. The U.S investment was purely motivated by the need for strategic competition with China and Russia. Ultimately the competition between China and the United States is giving benefits to the Arctic states. The Diplomatic value of the Arctic states like Iceland, Greenland and Norway has risen due to the competition. While they appreciate Chinese investments and scientific collaboration, they are very sensitive to issues of sovereignty, security and governance.

Obstacles China Faces in the Arctic under UNCLOS

China’s ambitions in the Arctic are shaped by its interests in accessing new shipping routes and expanding geopolitical influence. They face legal and geopolitical challenges in the Arctic from UNCLOS. Two main mechanisms followed by Arctic states complicate China’s ambitions:

1. The Sector Principle

This principle is introduced by Canada which allows Arctic states like Canada and Russia to claim Arctic sectors from their coastlines to the North Pole. Although it is not internationally recognized it represents the dominance of Arctic coastal states over shipping routes and natural resources. As a non-Arctic state, China’s ambition to use the Northern Sea Route and access natural resources can face some backlash from this.

2. Continental Shelf Mechanism

The Continental Shelf Mechanism under Part IV of the UNCLOS in Article 76 and Article 77 gives sovereign rights to coastal nations to extend their claims up to 350 nautical miles or beyond based on geological evidence. This poses challenges to China’s Arctic ambitions. China has no territorial claims in the Arctic and must operate within laws set by these countries.

China has had an observer status in the Arctic council since 2013 and it is one of the most active countries in the Arctic region. It has limited influence over important decisions and lacks voting rights. As the council members are all Arctic states, China’s non-Arctic status reinforced by UNCLOS restricts its ability to shape Arctic governance. Although China’s collaboration with Russia, allows an indirect influence China’s engagement in scientific cooperation, energy projects, infrastructure, investments in new shipping routes etc. was possible with Russia’s backing.

China considers the Arctic Ocean as part of international waters. However, Arctic states consider it as internal and limiting foreign access. This creates tensions for China in their attempts to develop the Northern Sea Route and expand their trade. China’s claim as a “Near Arctic State” also lacks legal recognition under UNCLOS and its proactive engagement raises suspicions among Arctic states. Though UNCLOS limits China’s sovereignty claims in the Arctic it supports their navigation access and participation in the Arctic trade.

India and the Arctic

India also has an observer status in the Arctic Council since 2013, which reflects its growing interest in the region’s development. India’s External Minister S. Jaishankar highlighted India’s expanding engagement in the Arctic region while addressing the Arctic Circle India Forum 2025. He also highlighted the growing geopolitical and strategic significance of the region. The opening of new shipping route is very essential for India's economic growth and global connectivity. The increased influence of the U.S and the growing collaboration between China and Russia in the Arctic has also heightened India’s need to be a player in the region. India’s Arctic policy released in 2022 aims to strengthen scientific exploration, improve economic cooperation, understand climate change impacts and the global shipping routes. India’s observer status helps them to stay involved in the Arctic affairs while promoting scientific research and sustainable development.

Conclusion

China’s growing interest in the Arctic marks a considerable change in their global trade and strategic interests. The melting of ice sheets in the Arctic due to climate change opens a new maritime route. This route offers faster and cost savings which is an alternative to traditional routes like the Suez Canal, Strait of Malacca etc. The development of the Northern Sea Route in cooperation with Russia is significant for China to reduce its dependence on U.S controlled sea lanes. The return of President Trump and increased trade tensions between both countries has heightened China’s urgency to develop the trade route and diversify global trade. As the U.S and allies try to limit Chinese influence it faces both diplomatic and illegal challenges under UNCLOS. However, weakening of the Arctic Council will support China’s ambitions from one side. Despite all these challenges China is working to expand its trade footprint in the High North and it will remain important to China’s long term goal.

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