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Deepening Chinese activities in the Arctic region could also pave the way for a strengthened military presence, including the deployment of submarines to act as deterrents against nuclear attack, the Pentagon said in a report released on Thursday.

The assessment is included in the U.S. military’s annual report to Congress on China’s armed forces and follows Beijing’s publication of its first official Arctic policy white paper in June.

In that paper, China outlined plans to develop shipping lanes opened up by global warming to form a “Polar Silk Road” — building on President Xi Jinping’s signature “Belt and Road” initiative.

China, despite being a non-Arctic state, is increasingly active in the polar region and became an observer member of the Arctic Council in 2013. That has prompted concerns from Arctic states over Beijing’s long-term strategic objectives, including possible military deployments.

The Pentagon report noted that Denmark has expressed concern about China’s interest in Greenland, which has included proposals to establish a research station, establish a satellite ground station, renovate airports and expand mining.

“Civilian research could support a strengthened Chinese military presence in the Arctic Ocean, which could include deploying submarines to the region as a deterrent against nuclear attacks,” the report said.

The Pentagon report noted that China’s military has made modernizing its submarine fleet a high priority. Its navy operates four nuclear-powered ballistic missile submarines, six nuclear-powered attack submarines and 50 conventionally powered attack submarines, it said.

“The speed of growth of the submarine force has slowed and (it) will likely grow to between 65 and 70 submarines by 2020,” the report predicted.

The United States and its allies, in turn, are expanding their anti-submarine naval deployments across East Asia. This includes stepped-up patrols of America’s advanced, sub-hunting P-8 Poseidon planes out of Singapore and Japan.

The expansion of China’s submarine forces is just one element of a broad — and costly — modernization of its military, which U.S. experts say is designed largely to deter any action by America’s armed forces.

Although Beijing’s official defense budget for 2018 was $175 billion, the Pentagon estimated that China’s budget actually topped $200 billion, when including research, development and foreign weapons procurement.

It estimated that China’s official defense budget would likely grow to about $260 billion by 2022.

Much of China’s military doctrine is focused on self-ruled Taiwan, which Beijing sees as a renegade province.

On Jan. 2, Xi said in a speech that China reserved the right to use force to bring Taiwan under its control but would strive to achieve peaceful “reunification.”

The Pentagon report outlined a number of potential scenarios that China might take if Beijing decides to use military force on Taiwan, including a comprehensive campaign “designed to force Taiwan to capitulate to unification, or unification dialogue.”

But the U.S. analysis appeared to downplay prospects for a large-scale amphibious Chinese invasion, saying that could strain its armed forces and invite international intervention.

It also noted the possibility of limited missile strikes.

“China could use missile attacks and precision air strikes against air defense systems, including air bases, radar sites, missiles, space assets, and communications facilities to degrade Taiwan’s defenses, neutralize Taiwan’s leadership, or break the Taiwan people’s resolve,” the report said.

China has repeatedly sent military aircraft and ships to circle the island on drills in the past few years and worked to isolate Taiwan internationally, whittling down its few remaining diplomatic allies.

It has also strongly objected to U.S. warship passages through the Taiwan Strait, which have greatly increased in frequency in the past year.

Taiwan’s military is significantly smaller than China’s, a gap that the Pentagon noted is growing year by year.

Recognizing the disparity, the Pentagon report noted, “Taiwan has stated that it is working to develop new concepts and capabilities for asymmetric warfare.”

Separately on Thursday, a senior official said that the United States rejects attempts by countries such as China that are not members of the eight-nation Arctic Council to claim a role in crafting policies governing the polar region.

U.S. Secretary of State Mike Pompeo will attend the meeting of the eight-nation Arctic Council in Rovaniemi, Finland, starting on Monday.

The United States, Canada, Russia, Finland, Norway, Denmark, Iceland and Sweden make up the Arctic Council, while China, India, South Korea, Singapore, Italy and Japan have observer status.

“The eight Arctic states conduct governance of the Arctic region and we reject attempts by non-Arctic states to claim a role in this process,” the official told reporters to preview Pompeo’s trip, which will also include Germany, Britain and Greenland.

“Observers have interests, but we know for example that China sometimes refers to itself as a ‘near-Arctic state’ and there is no such definition in the council’s lexicon,” the official added.

The council, which coordinates Arctic policy, is gaining clout as sea ice thaws and opens up new trade routes, intensifying competition for oil and gas — estimated at 15 percent and 30 percent of undiscovered reserves.

China has become one of the biggest mining investors in the region, while Russia has been pouring money and missiles into the Arctic, and reopening and building bases there.

Tensions have emerged in the run-up to the meeting over Washington’s refusal to sign off on draft language on climate change, the Washington Post reported on Thursday. The Arctic, especially its islands, is warming far quicker than the world average as the retreat of snow and sea ice exposes darker water and ground that soaks up ever more of the sun’s heat.

President Donald Trump has stood by his 2017 decision to withdraw from the Paris climate accord signed by almost 200 governments in 2015. They agreed to limit a rise in average global temperatures to “well below” 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial times by 2100. Worldwide, temperatures are up about 1 Celsius.

The U.S. House of Representatives on Thursday passed its first climate-change bill in a decade, voting 231-190 to require that administration keep the United States as a party to the Paris accord.

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