Xi seeks to extend B&R initiative in Finland

By Jeremy Garlick Source:Global Times Published: 2017/4/4 20:58:39

While it may seem surprising that Chinese President Xi Jinping has chosen to visit Finland's northern climes right now, there is sound logic in terms of China's interests. There is also a connection with the One Belt and One Road initiative, which aims to link Asia with Europe through Russia by land and by sea.

In 2016, Chinese companies began to intensify their activity in the Arctic, which contains about 20 percent of the Earth's reserves of natural resources. For instance, Greenland (which is administered by Denmark) attracted bids from Chinese mining consortiums with an interest in lead, zinc and rare-earth metals.

With ice continuing to melt, the Northern Sea Route reportedly saw a 35 percent year-on-year increase in trade between Asia and Europe in 2016. Since approximately 90 percent of global trade takes place in the Northern hemisphere, there is good reason to develop the shorter route around Russia even further, and this represents an opportunity for Chinese shipping firms.

Chinese scientists have also established a research station in the Norwegian Svalbard archipelago. The Yellow River Station in the Arctic conducts research on glacier monitoring and the atmosphere, aiding understanding of the effects of climate change in the frozen north.

China National Petroleum Corporation owns 20 percent of the $27 billion Arctic Yamal liquid natural gas project, while 9.9 per cent is held by China's $40 billion Silk Road Fund. These funds have been invested as part of the Belt and Road initiative, marking the northernmost point of China's grand plan to improve Eurasian connectivity.

The Yamal project aims to supply liquid natural gas to China via the Northern Sea Route, with full capacity to be achieved by 2021. Novatek, Russia's largest independent natural gas producer, owns a majority 50.1 percent stake in the budding operation. This means that win-win synergies are emerging without any notion of China impinging on Russia's sovereignty over its territory.

As for Finland, the country is perceived as a tech and innovation hub and borders China's close Belt and Road partner, Russia. In addition, the country is already familiar to Xi, since he visited as Vice President in 2010, when he took a trip to a reindeer farm and Father Christmas' hometown of Rovaniemi.

Finland was among the first Western countries to recognize the People's Republic of China in 1950 and signed a bilateral trade agreement in 1953. Beginning in the early 1990s, there has been at least one ministerial visit from Finland to China each year.

One area of potentially synergistic collaboration is in environmental protection. Finland is seen as a leader in this area, while Chinese companies are actively investing in what is seen as a long-term growth industry.

China, with its rapid development and equally rapid increase in pollution in recent decades, is keen to develop green solutions to environmental problems. Working hand in hand with Finnish innovators, perhaps with the investment of Chinese capital, would help in China's current drive to tackle problems such as climate change head on.

Thus, on all fronts, it is natural that Xi should seek to enhance ties with Finland to promote China's long-term interests while also finding ways to benefit Finnish partners. This is likely to be the main incentive for the visit this week.

Furthermore, enabling Chinese engagement in the Arctic as an offshoot of the Belt and Road initiative means making sure that China presents an image as a powerful business partner rather than a potential menace. The Chinese president needs to ensure that regional media convey as positive an impression of his visit as possible as he seeks to build ties.

It is on this task of economic diplomacy and soft power enhancement that President Xi and his team have turned their attention in Finland in the first week of April. Xi's whirlwind Finnish jaunt should thus be perceived as something rather more substantial and significant than merely a casual stopover on the long road to Mar-a-Lago.

The author is a lecturer in international relations with the Jan Masaryk Centre for International Studies at the University of Economics in Prague. bizopinion@globaltimes.com.cn


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