Report Most Chinese Investments Arctic Have Not Fully Materialized

Outside of Russia, most recent Chinese investments in the other Arctic states have stalled or failed, according to a new report. "If we are to have a proper conversation Chinese investments in the Arctic, it is important to create a joint, evidence-based understanding of the scale and scope," says researcher Anders Edstrøm.

Researchers at Harvard University and Canada's Trent University have mapped Chinese economic activity in the Arctic region, including research stations, infrastructure construction and ownership, energy projects and mining.

The results were recently published in a policy brief by Harvard's Belfer Center , contradicting a common narrative that China is "buying up the Arctic".

According to the researchers, only a small proportion of China's ambitions and plans for investments in the Arctic have fully materialized. And o utside of Russia, most recent Chinese investments in the other Arctic states have stalled or failed.

" We do not claim that one should not be concerned Chinese investments in the Arctic, but we also find that the scale and scope of investments is less than one might think based on the public debate," says co-author Anders Edstrøm to High North News.

Edstrøm is a Visiting Researcher with the Belfer Center’s Arctic Initiative and a PhD Candidate with the High North Center for Business and Governance at Nord University.

"A main point of the report is to illuminate Chinese investments as factually as possible, without exaggerations – or understatements," Edstrøm continues.

On this note, the researchers, for instance, found that unsuccessful proposals are often taken into consideration when presenting the total amount of Chinese investment in the region.

"The difference between the number of green indicators versus stalled or failed projects is striking. Most investments were concluded several years ago," they write and add:

"Recent Chinese investment initiatives have increasingly met with headwinds in Arctic countries except for Russia."

Visiting Researcher Anders Edstrøm with the Belfer Center's Arctic Initiative.

According to the authors, Greenland, as part of the Kingdom of Denmark, is one of the best examples of this.

"There has been a lot of talk the Chinese influence on Greenland, but the narrative of China 'buying up Greenland' has not been reflected in our results," Edstrøm explains and continues:

"When it comes to Greenland, we tend to see large claims Chinese investments. In some accounts, it may seem that 'all' proposals for investments have been included, even though little has materialized."

From the policy brief: Cutting Through Narratives on Chinese Arctic Investments

"Despite Greenland receiving intensive attention in the debate Chinese investments and influence in the Arctic, it is apparent that most of this anxiety is what might be , not what has actually happened," the researchers of the policy brief emphasize.

Though Chinese companies were interested in Greenland's mineral, oil, and gas resources, most proposed investments have in fact failed.

Of eight proposed investments, seven failed or never materialized, and the future of the Citronen mine (see map below) is currently uncertain, according to the policy brief.

“Inflated claims Chinese investments have been used to justify different policies and stances, such as the Trump administration’s insistence that Denmark has failed to protect Greenland from Chinese encroachment," said co-author of the study, Guðbjörg Ríkey Th. Hauksdóttir, in a statement.

Hauksdóttir is a Predoctoral Research Fellow with the Belfer Center’s Arctic Initiative and a PhD Candidate at the University of Iceland.

"We hope this brief can facilitate informed debate and decision-making among the Arctic states when they are deciding how to engage with China,” she adds.

Regarding the rest of the North American Arctic, the researchers find limited Chinese investments in Alaska, although the United States receives more Chinese foreign direct investment than any other country in the world.

In the Canadian Arctic, all Chinese investments have either failed or have been in abeyance for many years, except for one nickel mining project on the Raglan Peninsula in northern Quebec.

The authors of the report furthermore find that the Nordic countries (Norway, Sweden, Finland, and Iceland) have been most prominently engaged with China out of all seven like-minded Arctic states.

However, they also note that even though China has been involved in investments, energy projects, and scientific research in the Nordics, many projects have stalled or failed in recent years.

"In the Nordic Arctic, it may appear that China's window of opportunity has narrowed a little. There appears to be more balancing between security and business interests in today's international climate, than before. Things that were previously possible, seem more scrutinized now," Edstrøm explains.

When explaining why only a small portion of Chinese ambitions and plans for investments in the Arctic have been realized, the researchers point to a wide range of complex reasons, including geopolitical and domestic political obstacles, security concerns, environmental concerns, as well as restrictions on the mining of ore containing uranium.

"In addition, Chinese companies will be concerned with the economics of the project, and there are examples where Chinese investments seem to have been shelved because of economic reasons," Visiting Researcher Edstrøm adds.

Co-author and professor P. Whitney Lackenbauer at Trent University says the findings also suggest that the seven like-minded Arctic states have awoken to the risks associated with various forms of foreign direct investment in the region.

"[These states] have responded more decisively and effectively than most popular commentary might lead us to believe," Lackenbauer says.

In closing, Edstøm also highlights that many Chinese investments are economically significant for their host communities, and that Arctic states must distinguish between projects that pose a security risk and those that are benign and desirable.

"We aren’t claiming that there is no cause for concern, but those debates must be rooted in reality,” Edstrøm reiterates in closing.