China’s efforts in recent years to increase its presence in the Arctic can now be considered to have been a success. Until 2014, observers were surprised by the activities of Chinese diplomats, executives, and scientists in the region, and even debated “China’s threat” in the Arctic. These days, though, China is seen as an essential actor that provides strong links for the region and drives economic development. China’s achievement of observer status in the Arctic Council (AC) in 2013 symbolized an unspoken acceptance of Beijing’s Arctic expansion. At the same time, bilateral relationship building with each AC member has enabled China to begin its work solving economic issues in regional policy. Of strategic importance for China’s plan is Iceland.
The development and strengthening of Beijing’s ties with Reykjavik should be understood in the context of Iceland’s role as a player with influence in the region’s institutional transformation. This is demonstrated by the recent successes of Icelandic authorities. In 2007, Danish Foreign Minister Per Stig Møller came up with the idea to solve Arctic problems via the small “Arctic Five,” which included the U.S., Russia, Canada, Denmark and Norway. Iceland, which had not been invited to join, complained about the meetings and claimed that any decisions made without Reykjavik, Helsinki and Stockholm would not have validity. The protests paid off: The “Arctic Five” held only two meetings, in 2008 and 2010. After that, the decision-making process returned to the AC. Conscious of the need for more trenchant policy, in 2011 Iceland initiated discussions on cooperation agreements in aeronautical and maritime search and rescue in the Arctic. It also lobbied to create a permanent AC secretariat in Tromsø, where the experienced state official Magnús Jóhannesson, from the Icelandic Ministry for the Environment and Natural Resources, was appointed as a director.
In 2013, Iceland raised its status in Arctic policy debates by hosting the Arctic Circle international conference, during which special attention was given to Asia-Pacific actors: China, India, South Korea and Singapore. The success of the conference helped Reykjavik establish itself as a center for opinion exchange regarding essential questions about economic, social and ecological Arctic development. Moreover, Iceland increased its authority in the region by winning the right to hold the Arctic Circle conference up to 2017.
Finally, Iceland participated in a working group (Task Force to Facilitate the Circumpolar Business Forum) together with Russia, Canada and Finland in planning and establishing the Arctic Economic Council (AEC). The AEC, incidentally, could become a platform for Chinese investment in the region, changing Beijing’s status from an outside actor to a leading non-regional investor. Since China is not represented in the AEC as an equitable member, partner relations with Reykjavik could serve to facilitate the PRC’s foreign ambitions.