China heads to the Arctic

Lyudmila Morozova Sep 27, 2011 16:37 Moscow Time

China is joining the scramble for Arctic territory. Chinese billionaire Huang Hubo is ready to invest 200 million dollars for the purchase of 300 square kilometers of land in north-Eastern Iceland, for the construction of a tourist center. The forthcoming deal  has triggered a lot of  speculations in Iceland  as  well as in other countries of the Arctic region. Most experts see the plan not as another successful business project, but as a desire by China to establish a  foothold in the Arctic. The acquisition of a large piece of land in Iceland points to a hidden agenda.

Iceland’s economic situation cannot be described as stable. The country has not recovered from the 2008 economic crisisyet, and the deal with  Huang Hubo could solve part of the problems. Hence Iceland’s leaders originally quickly agreed to the deal, but backtracked after the noise in the press.  China is buying land all over the world, and “we should be aware of the international implications of the process”, one newspaper quotes Ogmundur Jonasson, the  Interior Minister of Iceland as having said. China has no other road to the Arctic, and the land deal can create such a path, wrote experts of the British Financial Times. However, the situation should not be blown out of proportion, says Andrei Ostrovsky, an expert at the Russian Institute for the Far East:

"China is indeed interested in studying the resources of the Arctic and Antarctic, but at the same time, the desire of a billionaire to buy part of the territory of Iceland  is not a  sufficiently strong ground to support China’s application to participate in the solution of political problems in the Arctic. I am not sure that anybody in Iceland would allow the deal to go through since the country remains a member of NATO. Besides, apart from economic issues, there are political ones, which are more important than China’s billions", Andrei Ostrovsky said.

It should be remembered also that there is the Arctic Council, comprising 8 members, which have a direct connection to the Arctic, as well as the Arctic five, which can contain China’s appetite, Ostrovsky added.

The struggle for the Arctic escalated in 2007, after Arthur Chilingarov, a  well known polar explorer and a Russian State Duma deputy planted a Russian flag on the seabed of the Arctic ocean in the region of the North Pole. If Russia can prove that the  ridges are a geological continuation of its continental shelf, it  can add 1.2 million square kilometers of the Arctic territory to its  land mass, thus gaining the possibility of prospecting vast oil and gas deposits. The Russian Defense Ministry has spoken about plans to create two military brigades to protect the country’s interests in the Arctic.

Canada is also claiming huge territories in the Arctic. In the summer it announced the holding of military exercises in the region. The government of Denmark has prepared an Arctic strategy document which  talks  about the need for a formal statement about the country’s rights to Arctic territories. There are already many claimants to the Arctic, and therefore, China’s participation in the Arctic scramble is hardly possible, Andrei Ostrovsky said.