The Dragon Covets the Arctic...
by Dr. A. Adityanjee
China's lust for oil, minerals, rare earths, fish and
desire for an alternative northern sea route boils the Arctic
Geopolitics!
Introduction:
Iceland is a small, sparsely populated island nation with
a population of only 320,000 and area of 40,000 square miles. It is the only
member of the NATO that does not have an army of its own. Icelandic banks were
part of the 2008 global financial crisis and meltdown when they exposed the
Icelandic government of huge financial risks by indulging in risky loans and
speculative foreign currency transactions without having enough liquidity and
capital reserves. The fiscal crisis led to a former Icelandic prime minister
losing his job and being hauled to court of law for not supervising the banks
enough.
In an international capitalistic, mercantile system, if
Iceland were a company, it was "sitting duck" for outright purchase and
acquisition. Fortunately, foreigners are not allowed to buy any property or real
estate in Iceland and need a special permit.
And here comes the Peoples' Republic of China, rich with $
3.4 trillion in foreign exchange reserves in its kitty. It has built a palatial
embassy in Reykjavik, Iceland worth $250 million with only 7 accredited
diplomats. China is negotiating a free trade area with Iceland, the first with
any European nation. Former Chinese Prime Minister Wen Jiabao even paid a state
visit to Iceland for two full days in 2012. Other Chinese ministers and
officials have also been very active in Iceland with bilateral visits and
cultural events.
In 2010, Huang Nubo, a "poetry loving" Chinese billionaire
and former communist party official visited Iceland to meet his former classmate
Hjorleifur Sveinbjornsson, a Chinese translator with whom he had shared a room
in 1970s in the Peking University. He expressed his intense love for poetry and
put up $ one million to finance Iceland-China Cultural Fund and organized two
poetry summits, the first one in Reykjavik in 2010 and the second one in Beijing
in 2011.
Last year (2012), Huang Nubo and his Beijing based
company, the Zhongkun group offered to buy 300 sq km of Icelandic land
ostensibly to develop a holiday resort with a golf course. This Chinese
billionaire wanted to pay $7million to an Icelandic sheep farmer to take over
the land and build a $100 million 100-room five star resort hotel, luxury
villas, an eco-golf course and an airstrip with 10 aircrafts. A state owned
Chinese bank reportedly offered the Zhongkun group a soft loan of $ 800 million
for this project.
The deal was blocked by the Icelandic Interior Minister
who asked many pertinent questions but reportedly got no answers. Huang would
not take no for an answer and has submitted a revised bid for leasing the land
for $ one million instead of outright purchase. He makes an unbelievable
assertion that there is a market demand for peace and solitude: "Rich Chinese
people are so fed up of pollution that they would like to enjoy the fresh air
and solitude of the snowy Iceland".
The current Icelandic government, a left-of-center
coalition has given this proposal a cold shoulder. But, with elections due in
April 2013 in Iceland, China is hoping for a more sympathetic government to
approve the project. Iceland looks like an easy bird of prey for the wily red
Dragon with insatiable appetite.
China is showing generosity to another poor and sparsely
populated, self-governing island of Greenland by offering investments in mining
industry with proposal to import Chinese crews for construction and mining
operations. Greenland is rich in mineral deposits and rare earth metals. China
wants Greenland to provide exclusive rights to its rare earth metals in lieu of
the fiscal investments. Under one such proposal, China would invest $2.5 billion
in an iron mine and would bring 5000 Chinese construction and mining workers
whereas the population of the capital of Greenland, Nuuk is only
15000.
Arctic Council Membership:
There are eight members of the Arctic Council that
includes Canada, Denmark (including Greenland), Finland, Iceland, Norway,
Russia, Sweden and the USA. All these eight countries have geographic
territories within the Arctic Circle. It was constituted in 1996 as an
intergovernmental body but has evolved gradually from a dialogue forum to a
geo-political club and a decision making body. There are continuing territorial
disputes in Arctic Circle. Ownership of the Arctic is governed by the United
Nations Convention of the Law of the Sea, which gives the Arctic nations an
exclusive economic zone that extends 200 nautical miles from the land. Member
countries signed their first treaty on joint search and rescue missions in 2011.
A second treaty on cleaning up oil spills is being negotiated. The group
established its permanent secretariat at Tromso, Norway in January
2013.
Arctic Melting and Opening of Newer Sea
Lanes:
With global warming becoming a reality, the Arctic ice has
started to melt rapidly opening the northern sea-lanes that were frozen earlier.
In summer of 2012, 46 ships sailed through the Arctic Waters carrying 1.2
million tonnes of cargo. There are legal questions about the international
status of the northern sea lanes.
China's Lust for Arctic Resources:
The Arctic has 13% of the world's undiscovered oil and 30%
of gas according to the US Geological Survey. Greenland alone contains
approximately one tenth of the world's deposits of rare earth minerals. China
which already has a monopoly on world's rare earth metal trade wants to continue
controlling this global trade. China piously claims that the Arctic resources
are the heritage of the entire mankind while insisting that the South China sea
is its exclusive sovereign territory.
In 2004, China set up its first and the only Arctic
scientific research station, curiously named "Yellow River Station" on the
Svalbard Island of Norway. China, so far, has sent 6 arctic expeditions. China
plans to build more research bases. In 2012, the 170-meters long ice-breaker
"Snow Dragon" (MV Xue Long) became the first Chinese Arctic expedition to sail
along the Northern Sea Route into the Barente Sea. Incidentally, as early as
1999, this 21000 metric ton research ice-breaker Xue Long had docked in the
Canadian North-Western territory unexpectedly. China is building another
120-meter long ice-breaker with the help of Finland while the Polar Research
institute in Shanghai trains scientists and other personnel for Arctic
expeditions.
China's Previous Use of Deception:
There is no mandarin character for word transparency.
China has been known to use duplicity and deception since the Art of War was
written by Sun Tzu. China's rhetoric of "peaceful and harmonious rise" and
hegemonic behavior are predictably diametrically opposite to each other. China's
use of deception to camouflage its intentions in geopolitical matters is not
surprising. While China joined the NPT in 1991, it provided 50 kg of highly
enriched uranium to Pakistan, provided that country with a nuclear weapon design
and supervised Pakistan's first nuclear test at the Chinese nuclear testing site
of Lop Nur. China purchased in 1998 an unfinished aircraft carrier from Ukraine
after the break-up of Soviet Union ostensibly for developing a floating casino.
The same "floating casino" is now China's first aircraft carrier projecting
Chinese naval and maritime power in the South China Sea.
China's Application in Arctic Council
Membership:
China currently has an ad hoc observer status with Arctic
Council. China's application for permanent observer-ship was denied by Norway in
2012 owing to bilateral dispute over awarding of Nobel peace prize to China's
Liu Xiabo in 2010. China still has a pending application to be decided in May
2013 Arctic Council summit in Sweden when Canada takes over the chair for the
next two years. With a permanent observer status, China would get full access to
all Arctic Council meetings. Permanent observers do not have voting rights in
the council but can participate in deliberations.
China is trying to distinguish itself from the rest of the
applicants as a "Near Arctic State" on the perniciously clever but fallacious
grounds that the northernmost part of China in the province of Manchuria (the
Amur river) is only one thousand miles south to the Arctic circle. The fallacy
is that Manchuria was a separate, independent country that was annexed by China
after the Communist take-over. Manchus had ruled over China for centuries during
the reign of Manchu dynasty and last Chinese Emperor Pu Yi was actually the last
Manchu emperor. Chinese ownership and annexation of Manchuria (Manchu-Kuo) is
still not settled. A disputed territory cannot be used by China to make a
geo-political claim for being a "Near Arctic State".
Other Pending Applications:
Other countries or non-state actors with pending
applications for permanent observer-ship status include Japan, South Korea,
India, Singapore, European Union, and non-state actors like Greenpeace and the
International Association of Oil and Gas Producers. All these applications will
be decided one way or the other in May 2013. The vote has to be unanimous for
acceptance and how the US and Russia will vote is the crucial issue. In the
past, Norway had vetoed China's membership application. Some of the Arctic
Council members may not approve European Union's application because of EU's
penchant for restrictive and narrow rulings. Whereas Sweden, Canada, Iceland and
Denmark may support China's application, there are doubts about Norway, Russia
and the US. Russia is currently the most vociferous member of Arctic Council
that has serious reservations in expanding the Arctic club.
Strategic Issues:
China has voracious appetite for new territories and has
been seeking new frontiers for the last three hundred years with Inner Mongolia,
Manchuria, Xinjiang and Tibet. China's list of "core issues" is ever-expanding,
starting with Taiwan and Tibet. China has included the whole the South China Sea
and its islands as a core issue. China is aggressively claiming sovereignty on
these islands based on historical maps and manufactured mythological evidence.
China has now a license from the UN for deep sea bed mining for minerals in the
Indian Ocean and has developed naval bases in Indian Ocean and Arabian Sea
ports. If China manages to get a toehold in Arctic Circle, its behavior will
become as belligerent in Arctic as it is in the South China Sea. It might claim
sovereignty over the whole of the Northern route sea lanes based on "historical
evidence". If in 22nd century, China decides that the Arctic Circle is its core
national issue, one would be seeing Chinese aircraft carriers in the Arctic Sea
and Chinese nuclear powered submarines in the Barente Sea along with military
bases with "Chinese characteristics" in the Iceland and
Greenland...
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