Greenland on Monday picked Denmark as partner in a planned upgrade of two airports as it sought to defuse a diplomatic row over how the infrastructure projects, of strategic interest to both Washington and Beijing, should be financed.

The Arctic island is a self-ruling part of Denmark, which is concerned that Chinese investment — on the agenda since Greenland Prime Minister Kim Kielsen visited Beijing last year — could upset the United States.

Kielsen on Monday agreed to let Denmark pay 700 million Danish crowns ($109 million) for a 33 percent stake in Kalaallit Airports, a state-owned company set up to build, own and operate the airports in the capital Nuuk and the tourist hub in Ilulissat.