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‘Polar Silk Road’: Greenland’s courting of China for airport projects worries Denmark

Reuters

Greenland is courting Chinese investors and construction firms to help expand three airports, causing concerns in the Danish government that Chinese involvement on the Arctic island could upset the United States, a close ally.

Chinese interest in Greenland, a self-ruling part of the Kingdom of Denmark, comes after Beijing in January laid out ambitions to form a “Polar Silk Road” by developing shipping lanes that have been opened up by global warming and by encouraging enterprises to build infrastructure in the Arctic.

Greenland, also keen to benefit from rising Arctic activity, plans to expand the airports in the capital, Nuuk, the tourist hub in Ilulissat and at Qaqortoq in southern Greenland to allow direct flights from Europe and North America.

China’s official Xinhua News Agency reported Saturday that China has begun building its first polar expedition cruise ship. Construction of the 104-meter (342-foot) vessel, equipped with an advanced electric propulsion and control system for navigating sea ice, is expected to be completed by August 2019.

Greenland lacks simple infrastructure for its tiny population of only 56,000. It has no roads between its 17 towns and, for now, only one commercial international airport, at Kangerlussuaq, western Greenland.

During a visit headed by Greenland Prime Minister Kim Kielsen to Beijing late last year, the delegation met representatives of the engineering and construction company China Communications Construction Co. and of Beijing Construction Engineering Group.

Now Chinese construction companies have appeared on a list of 11 companies or consortia that have shown interest in the projects, which have an estimated cost of 3.6 billion Danish crowns ($595 million), according to Kalaallit Airports, a state-owned company set up to build, own and operate the airports.

Other interested companies are from Denmark, Iceland, Canada, the Netherlands and the Faroe Islands, said the company’s chairman, Johannus Egholm Hansen.

The company expects to short-list five or six of them this month or next and begin construction in October, he said.

Greenland’s government declined to comment on the Chinese interest.

Greenland says it can finance 2.1 billion crowns but will need external funding for the remaining 1.5 billion.

“Our visit to China should be viewed in the context of seeking funding to these future investments,” Kielsen said during the visit to Beijing, following meetings with the Export-Import Bank of China.

Chinese activity in Greenland is met with strong opposition in Copenhagen. A defense treaty between Denmark and the United States dating back to 1951 gives the U.S. military almost unlimited rights in Greenland, where it has the Thule air base.

“We are deeply concerned. China has no business in Greenland,” a high-ranking Danish government official in Copenhagen said on condition of anonymity.

“Denmark has a big responsibility to live up to with regards to our closest ally, the United States,” the person said.

Greenland, with vast mineral resources including uranium and rare earths, is strategically important for the U.S. military because the shortest route from North America to Europe goes via the island.

The Thule air base, located 1,200 km (750 miles) north of the Arctic Circle, hosts a radar station that is part of a U.S. ballistic missile early warning system.

While Greenland’s self-rule authority decides on most domestic matters, foreign and security policy is handled by Copenhagen. Foreign investment in infrastructure projects is a gray zone, but if China is involved, Copenhagen holds the right to say no, the government source said.

Danish Prime Minister Lars Lokke Rasmussen, Defense Minister Claus Hjort Frederiksen and Foreign Minister Anders Samuelsen all declined to comment.

The U.S. Embassy in Copenhagen also declined immediate comment.

“It’s obvious that the United States doesn’t want a superpower like China to have such large-scale access to Greenland,” said Soren Espersen, spokesman for foreign and security affairs of the Danish People’s Party, a key ally of the minority government.

“Denmark cannot play on two horses. The government in Copenhagen has to stop the Chinese plans, because if it doesn’t, the United States will,” he said.

In 2016, the Danish government on direct orders from Washington prevented a Chinese investor from buying a former marine station in southern Greenland, according to sources.

Trade tensions between the United States and China have been rising, and Beijing on Thursday was hit by U.S. President Donald Trump with tens of billions of dollars in tariffs on Chinese imports.

“In Greenland we don’t suffer from China anxiety, like they obviously do in the government in Copenhagen,” said Aaja Chemnitz Larsen, member of the Danish parliament for Greenland and head of Greenland’s foreign affairs committee.

“They lack an understanding for Greenland’s need for investments, and we can sense a big interest in China for our projects,” she said.

China’s foreign ministry said in a faxed statement it has “no understanding of the situation” mentioned.

“At present, China and Denmark’s all-round strategic partnership relationship is developing thoroughly, and China has a good cooperative relationship with Denmark’s autonomous territory Greenland,” the ministry said.

“The Chinese government encourages and supports relevant companies to participate in the development and use of the Arctic in accordance with lawful, green, cooperative and market principles,” it said.