COPENHAGEN–A Chinese state-owned company has withdrawn its bid to build two airport projects in Greenland, the Sermitsiaq newspaper reported on June 4, citing a company official.
The withdrawal of the China Communications Construction Co. (CCCC) marks the end of China’s potential participation in the infrastructure projects, which are of strategic interest to both Washington and Beijing.
Last year, Greenland picked Denmark over Beijing to finance the planned projects.
In January, Beijing laid out ambitions to form a “Polar Silk Road,” an extension to its One Belt, One Road initiative, by developing shipping lanes through the Arctic and encouraging Chinese enterprises to build infrastructure in the Arctic.
But Greenland is strategically important for the U.S. military and its ballistic missile early warning system, as the shortest route from Europe to North America goes via the Arctic island.
“We are not bidding for the two projects in Nuuk and Ilulissat,” CCCC’s deputy general manager Debin Song told the newspaper in Greenland, declining to provide further details.
CCCC in Beijing didn’t immediately comment when contacted by Reuters.
The company had been short-listed by the project operator Kalaallit Airports, together with five other companies to upgrade the airports, whose costs are estimated at 3.6 billion Danish crowns ($559 billion). The deadline for submitting a final bid is June 14.
The Arctic island is a self-ruling part of Denmark, which is concerned that Chinese investment—on the agenda since Greenland’s Prime Minister Kim Kielsen visited in 2017—could upset the United States.
Greenland, eager to benefit from growing activity in the Arctic, plans to expand the airports to cater for direct flights from Europe and North America.
Kalaallit Airports Chief Executive Officer Peter Wistoft declined to comment, due to the sensitivity of the continuing bidding process.
China’s Interests in Greenland
China has considered Greenland a strategic part of its Arctic ambitions.
A Jan. 17 editorial by state-run media Xinhua pointed out that if China didn’t look to other countries for cooperation, it would be too dependent on Russia, thus putting China in a weak position regarding the Arctic. Thus, Greenland should be critical to fulfilling China’s Arctic policy, given Greenland’s close proximity to Arctic shipping lanes, the article said.
Additionally, a closer relationship with Greenland would allow China to tap into its rich mineral resources, including uranium and rare earths, according to Xinhua.
In April, Guancha, a state-run online news site, ran an article advocating for Chinese investment into Greenland to fulfill “its desire” to become an independent nation.
In recent years, some political parties and individuals in Greenland have sought to gain independence from Denmark. However, a separation from Denmark would make Greenland the poorest European country. According to data from the World Bank, Greenland’s GDP stood at about $2.7 billion in 2016, less than the $6.75 billion registered by Moldova that year.
Chinese companies have already made inroads into Greenland’s mineral market. For example, Shenghe Resources Holding, a publicly listed company—with the state-run Chinese Academy of Geological Sciences its largest shareholder—is developing rare earth, uranium, and zinc mines at Kvanefjeld, one of the world’s biggest multi-element deposits. The project operates in cooperation with Australian firm Greenland Minerals and Energy, according to Australian financial news site Proactive Investors.
Not all Chinese investments in Greenland have gone through. For example, in April 2017, China’s plan to buy an abandoned naval base at Kangilinnguit was rejected by Denmark, because the latter didn’t want another country to gain a military foothold in Greenland, according to Reuters.
In an Aug. 2, 2018, opinion article, Canada-based publication Geopolitical Monitor warned of Greenland’s increasing economic dependence on China.
“China is skilled at and has a proven record of converting its financial investment to certain countries into political influence on multilateral institutions,” it stated.
By Jacob Gronholt-Pedersen. Epoch Times staff member Frank Fang contributed to this report.