Last week’s announcement that the China Communications Construction Company (CCCC) would be withdrawing its bid for a contract to refurbish and expand airports in Greenland, specifically at the capital, Nuuk and at Ilulissat, has seemingly brought an end to an especially thorny political saga in the Arctic. The Chinese firm cited problems in obtaining visas and potential work and residence permits for their staff to enter and operate in Greenland, as well as concerns about not being given the same treatment as the five other bidding companies, (two Canadian, two Danish and one Dutch), as the rationale for pulling itself out of the running for the airport contracts. Despite this setback, the unsuccessful application by the CCCC is very unlikely to be the last word in China’s ongoing interests in Greenland. However, this affair also underscores that Greenland is fast becoming a focal point in the steadily growing strategic rivalry between Beijing and Western governments in the Arctic.
When it was first reported early last year that the CCCC was seeking to bid on the airport projects, the response from the government of Denmark was especially wary, not only reflecting worries about Greenland becoming economically dependent on Chinese investment, but also the potential pushback from the United States, a NATO ally, given that the U.S. Air Force operates a base at Thule in northern Greenland, a facility which is growing in importance given American concerns about the expansion of Russian military activities in the European Arctic region. Under the terms of the Denmark-Greenland Self-Rule Agreement, which observes its tenth anniversary this month, Greenland remains under the aegis of the Kingdom of Denmark, with Copenhagen retaining oversight of foreign and defense areas. However, the airport question has underscored how Chinese economic diplomacy in Greenland has stretched the definition of “defense” in Danish eyes, and has led to strains between Copenhagen and Nuuk over the latter’s economic sovereignty.
In September last year, the Danish government made an abrupt announcement that it would offer to provide 700 million kroner ($106 million) to finance the upgrading of the Nuuk and Ilulissat airports, as well as underwrite a potential new civilian air facility at Qaqortoq. Denmark would then participate more directly in the choosing of a firm to initiate the construction. Although Greenland agreed to the deal, one of the partners within the island’s four-party coalition government in Nuuk withdrew its support in protest of what it saw was unjustified overreach by Denmark. Shortly after that announcement, the American Embassy in Denmark released a brief statement indicating that Washington was also interested in Greenland investment, without giving specifics.
It was also reported in the Wall Street Journal in February this year that the U.S. Department of Defense, nervous about the possibility of China making use of Greenland air facilities, was actively pressuring the Danish government to cut off the CCCC airport bid by having Copenhagen agree to underwrite the project itself. Concerns about creating a rift in the Denmark-U.S. relationship was also a factor in the decision made by Copenhagen in 2016 to block the potential purchase of an abandoned Danish naval facility in Greenland by a Hong Kong mining company.
Since the start of the year, signs were mounting that the U.S. government was not only taking a more critical view of China’s Arctic policies, but was also pointing to Greenland as a potential trouble spot given Beijing’s growing interests there. A report on Arctic strategy released by the United States Coast Guard in April this year noted China’s interest in regional infrastructure projects, including airports. A subsequent U.S. Department of Defense paper on Chinese military activities cited Beijing as being interested in building a research station in Greenland, adding that civilian research could be used as a platform for future Chinese military interests in the Arctic Ocean.
U.S. Secretary of State Mike Pompeo, in a blustery speech at the May 2019 Arctic Council Ministerial meeting in Rovaniemi, Finland, sought to elevate China alongside Russia as a critical challenge to Arctic security. Pompeo was supposed to travel to Nuuk after the Arctic Council meeting, but cancelled the visit at the last minute while confirming that the U.S. was going to restore its diplomatic presence in Greenland, after the American consulate on the island was closed down in 1953 after Greenland was incorporated into the Danish Kingdom. Last month, Sung Choi was confirmed as the new U.S. representative to Greenland.
In addition to this new political arrangement, Washington has been strengthening its scientific diplomacy in Greenland. This month, a new memorandum of understanding (MoU) was signed by both governments concerning cooperation to further improve Greenland’s mining sector. The U.S. has articulated its interests in potential mineral extraction on the island, and the memorandum included calls for joint data collection via an aerial hyperspectral survey for future mining endeavors, reflecting American concerns about Greenlandic economic development. These surveys would center on southern Greenland, a region with an abundance of mineral wealth, including rare earth elements (REEs), a resource which recently became caught up in the expanding Sino-American trade war, given Chinese dominance in REE exports.
It is well known that the Chinese firm Shenghe Ziyuan has interests in REEs mining in Greenland, primarily through a share stake of 12.5 percent, since 2013 in an Australian company, Greenland Minerals. The latter firm commenced exploration operations at Kvanefjeld, the site of rich REE and uranium deposits in southwest Greenland, since 2007. However, the project did not appear to spark a reaction from Washington until recent years, when China demonstrated its interest in Greenland mining joint ventures and other economic activities.
Early in 2003-4, the Huanghe (Yellow River) Station, China’s first research center in the Arctic, was opened in Svalbard by the Polar Research Institute of China (PRIC), specializing in glacier studies, atmospheric research and related areas. At the 2017 Arctic Circle conference in Reykjavík, Beijing expressed interest in establishing a similar facility in Greenland. At the event, PRIC representative Yu Yong conveyed a vision of the station which would be two thousand square meters and be open throughout the year, expressing hopes that the station would open “as quick as possible”. However, discussions about the facility appear to have gone into abeyance since then. Furthermore, in a U.S. Department of Defense Report to Congress on Arctic strategy published this month, a document which was also critical of Beijing’s Arctic policies, the significance of the American Air Base at Thule, Greenland was reconfirmed, which may also be a impediment for any future Chinese research facilities on the island.
The June 5 parliamentary elections in Denmark, which saw the Social Democratic Party under Mette Frederiksen emerge victorious and set to form the next government, may add another wrinkle. Compared with the outgoing leader, Lars Lokke Rasmussen, Frederiksen has shown signs of being more willing to grant Greenland greater elbow room regarding its foreign policy. Moreover, a comprehensive strategic partnership between Denmark and China was formed in 2013, which enabled further bilateral cooperation in numerous ways, including in Arctic affairs. However, the attitude of Frederiksen’s fledgling cabinet towards China’s developing economic presence in Greenland remains uncertain.
Despite the unsuccessful airport bid, Chinese firms remain engaged in Kvanefjeld and other Greenland mining endeavors, and Beijing remains an emerging economic partner for Nuuk. The question now is whether China will continue to be able to maintain its delicate balancing act between Greenland and Denmark, in light of a new Danish government and a brighter spotlight on Greenland from the United States.