Arctic Economic Security: Recommendations for Safeguarding Arctic Nations against China’s Economic Statecraft

This report is part of a series that CNA produced to fulfill requirements outlined in the fiscal year (FY) 2020 National Defense Authorization Act (NDAA), Sec. 1260E. The FY 2020 NDAA mandates that a federally funded research and development center “complete an independent study of PRC foreign direct investment [FDI] in countries of the Arctic region, with a focus on the effects of such foreign direct investment on United States national security and near-peer competition in the Arctic region.”1 The Department of Defense (DOD) selected CNA to execute this analysis, for which CNA produced four reports addressing the following research questions:

1. What is the nature and scope of current FDI in the Arctic?

The research paper answering this question addresses NDAA tasking related to quantifying Arctic FDI, including providing a survey of Arctic projects that are funded by People’s Republic of China (PRC)-based investors in critical industries such as public infrastructure; minerals, oil, and gas; shipping; and telecommunications.

2. What are the legal conditions that govern FDI in the Arctic?

The research paper answering this question addresses NDAA tasking mandating an analysis of the regulatory environment for FDI in the United States, Russia, Canada, Greenland, Norway, and Iceland. That analysis includes discussion of the efficacy of mechanisms for screening FDI, transparency measures in FDI, and FDI evaluation criteria.

3. How does PRC Arctic FDI relate to the PRC’s strategic regional objectives?

The research paper answering this question addresses NDAA tasking requiring a review of PRC Arctic policy documents. This analysis describes China’s strategic objectives in the Arctic from military, economic, territorial, and political perspectives, as well as whether any active or planned infrastructure investments are likely to result in a regular PRC Arctic military presence.