China and Finland: The Ice Road Cometh?

As China began to expand its Arctic diplomacy over the past decade, there was much speculation [pdf] as to when the Arctic Ocean might be officially added to Beijing’s ever-expanding Belt and Road (yidai yilu一带一路) trade projects. The inclusion of the Indian and Pacific Oceans, as well as Africa, Eurasia and South Asia within this initiative had begun to take form in 2013. Ultimately, it was in June 2017 that the initial connection between the Belt and Road Initiative (BRI) and the Arctic was made via a policy document, ‘Vision for Maritime Cooperation under the Belt and Road Initiative’, co-written by Beijing’s National Development and Reform Commission (NDRC) and the then-State Oceanic Administration (SOA). The Arctic Ocean was cited as a ‘blue economic passage’ (lanse jingji tongdao 蓝色经济通道) which China would help build in order to enhance maritime commerce and trade.

The importance of the Arctic to Chinese trade, and its links to the BRI, were further underscored in Beijing’s January 2018 Arctic White Paper. The document affirmed that China sought to deepen cooperation with Arctic actors ‘to advance Arctic-related cooperation under the Belt and Road Initiative, so as to build a community with a shared future for mankind and contribute to peace, stability and sustainable development in the Arctic.’ Beyond these goals, however, it remained to be seen what sorts of infrastructure projects, a cornerstone of the BRI, would be planned for the Arctic regions.

Until recently, it had been Russia which had seen the concentration of actual and prospective Chinese investment in infrastructure related to the Belt and Road, including plans announced in June of last year for as many as seventy such joint projects, including within the Russian Arctic. This degree of policy coordination between Beijing and Moscow has begun to raise concerns in the United States, with American officials starting to sound the alarm over potential security challenges to a closer Sino-Russian partnership in the Arctic, and US Secretary of State Mike Pompeo is expected to attend the upcoming Arctic Council summit in Rovaniemi, Finland in May as a counterweight to China and Russia. It was also reported this week that the Trump administration was drafting a new Arctic defence strategy which would emphasise the growing ‘China challenge’ in the region.

Other Russian infrastructure projects, including the proposed deep-water port at Arkhangelsk and accompanying Belkomur rail link connecting the White Sea with the Ural region, mooted in late 2017, (although with little follow-up news since then), may also form a more physical part of the BRI trade infrastructure in the Arctic. Beyond Russia, in December 2018 the Hålogaland suspension bridge in Norway, connecting the Narvik region with Øyjorda, near Tromsø and the northern Swedish border, was completed in partnership with the Sichuan Road and Bridge Group (Sichuan Luqiao 四川路桥 / SRBG), based in Chengdu.

However, another actor in China’s Arctic link building, Finland, is also starting to gain visibility in light of recent potential transportation and communications initiatives. This month, it was reported that a Chinese firm may be in a position to underwrite the long- discussed tunnel between Helsinki and the Estonian capital of Tallinn. China’s Touchstone Capital Partners was named [In Finnish] as expressing interest in investing €15 billion (US$17 million) for the watershed 100km tunnel’s construction. Although there has been little comment thus far from the Chinese government on the project, this link could form another element of the BRI’s far northern tier. Under the terms of a memorandum of understanding (MoU) between Touchstone and the FinEst Bay Area Development concern, Touchstone would receive a minority stake in the would-be construction project. (Even though a date for the state of construction has yet to be announced, it was reported in December of last year that tickets were already for sale for tunnel trips.)

The possibility of a rail link between Kirkenes, Norway, and Rovaniemi, possibly with Chinese support, has also not faded, despite the publication of a report last month stating the project was not commercially viable in its present form. There remains enthusiasm in both cities about the possibility of the rail link eventually hooking up with Russia and perhaps the Chinese rail systems, thus completing an additional land component to the growing maritime shipping potential of the Russian and European Arctic regions.

It was also announced in early 2018 that China and Finland were seeking to cooperate on the laying down of a fibre-optic cable to improve internet connectivity and data-sharing in the Arctic. If successful, this endeavour would further cement the ‘virtual’ aspect of the BRI in the Arctic. However, this plan may be tempered by the ongoing global debate over the Chinese firm Huawei and its attempts to set the standard for a nascent fifth generation (5G) mobile communication service, especially given that one of Huawei’s major competitors is Finland’s Nokia.

Nonetheless, cooperation in the Arctic may be developing as a significant cornerstone of Sino-Finnish relations, as demonstrated by the meeting in Beijing this January between Chinese President Xi Jinping and Finnish Prime Minister Sauli Niinistö which culminated in the release of a Joint Action Plan [pdf] including plans to deepen bilateral research partnerships in the Arctic and to increase Finnish presence in the Belt and Road. A Finnish firm, Aker Arctic Technology, had teamed with the Beijing-based China State Shipbuilding Corporation (CSSC), to design China’s second icebreaker, the Snow Dragon II (Xuelong 2), which launched in September of last year.

As well, a Finnish government report [pdf] on China and the Arctic was published in February this year, spearheaded by Timo Koivurova, professor and director of the Arctic Centre at the University of Lapland, Rovaniemi. (note: OtC editors / writers Marc Lanteigne and Mingming Shi were contributors to this report). Another opportunity for Sino-Finnish Arctic dialogue will likely also appear at the Arctic Council Ministerial meeting in May. The document detailed both Finland’s current cooperation with China as well as possible new areas of joint dialogue, including in the areas of technical cooperation, energy, data centres, tourism and transportation. Although Russia will likely continue to be the focal point of much BRI planning on China’s part, Finland is fast becoming another principal player as the Belt and Road moves from paper to reality.