Greenland

Greenland

Bilateral relations between Greenland and China began to develop after 2009, when the Government of Greenland took sole responsibility for the territory’s natural resources.

Greenland

Written by Patrik Andersson.

Background

As part of the Kingdom of Denmark, Greenland’s foreign relations are managed in cooperation with Denmark. With the adoption of the Self-Government Act of 2009, the Government of Greenland (GoG) took sole responsibility for Greenland’s natural resources and earned the right to act independently in international affairs on matters pertaining to these and other areas for which it took over responsibility. While several policy areas remain under Danish jurisdiction—such as justice, defence, and national security—Greenlandic influence reaches beyond what the formal division of labour suggests.

Bilateral relations between Greenland and China began to develop after the adoption of the Self-Government Act. The GoG has sought to attract Chinese investment in Greenland’s economy—in particular, its mining industry. Most of Greenland’s political elite regard a mining boom fuelled by Chinese investment as the most feasible path towards achieving a self-sustaining economy and a prerequisite for realising formal independence from Denmark, which is the stated long-term aspiration of most Greenlandic political parties, individuals, and interest groups (today, an annual block grant from Denmark of 3.9 billion DKK, or roughly 585 million USD, accounts for about one-fifth of GDP and half of government revenue). In November 2011, Greenland’s Minister for Industry and Natural Resources, Ove Karl Berthelsen, visited the China Mining Conference and Expo, an annual international mining conference in Tianjin, where he met with China’s then Vice-Minister for Land and Resources Wang Min as well as several Chinese companies. Berthelsen also visited Beijing, where he was received by China’s then vice-premier and now Premier, Li Keqiang. In April 2012, China’s then Minister for Land and Resources Xu Shaoshi visited Nuuk, which was followed by a visit in the summer of 2013 by a large Chinese investor delegation to Greenland. Greenlandic leaders have since made several trips to China to promote Greenland to potential Chinese investors, including to the China Mining Conference and Expo.

Although China does not have a diplomatic mission in Greenland, it is diplomatically represented through the Embassy of Denmark. In November 2021, the GoG established a representative office in Beijing with the goal of promoting trade and fostering economic and cultural relations with China and other East Asian countries.

BRI Status

While Chinese officials have been careful about expressing any views on Greenland’s strategic importance to China, some Chinese academics have argued that Greenland could play a key role in the emerging ‘Polar Silk Road’, with some even claiming the country could provide a ‘foothold’ for China to access the Arctic. However, Greenland has not joined the Belt and Road Initiative (BRI) and is unlikely to do so under the current political circumstances. Since Greenland is not a sovereign state but a constituent country of the Danish Realm, China is more likely to invite Denmark to join the BRI than to invite Greenland separately (for more details on this, see the country profile for Denmark). And any unilateral move by Greenland towards signing a BRI agreement with China would likely be challenged by Copenhagen for violating its security concerns.

Considering Denmark’s close military cooperation with the United States in Greenland (which includes the United States operating the Thule Air Base in the north of the country) and given US efforts to push back against the BRI in the Arctic and elsewhere, it is unlikely Greenland (or Denmark) would join the BRI. The United States has long regarded Greenland as part of its sphere of influence and is currently stepping up its engagement in the country with the explicit aim of countering what it considers to be encroaching Chinese influence. In 2020, the United States reopened its consulate in Greenland, which had been closed since 1953. It has also extended two economic aid packages to Greenland and sought to cooperate with the GoG on rare earths minerals governance and exploration. While it remains to be seen how Chinese investors respond to these actions, signs point to China taking a more cautious approach in Greenland and the Arctic more broadly and perhaps even withdrawing plans for investment in the country.

Current Economic Relations

Trade: Due to Greenland’s tiny population (around 56,000), trade between China and Greenland is miniscule from the Chinese perspective, but significant for Greenland. In 2019, Greenland exported goods worth 270 million USD to China, about 98% of which was frozen fish, making China Greenland’s second-largest export destination after Denmark. By comparison, Chinese exports to Greenland reached 663,000 USD in 2019, making it one of China’s smallest export markets. The main Chinese exports to Greenland were stuffed animals, office machine parts, and light fixtures.

Investment: Chinese foreign direct investment (FDI) in Greenland has been very limited. One of the notable deals, Chengdu-based rare-earth miner Shenghe Resource’s investment in the planned Kuannersuit (Kvanefjeld) rare-earth mine in south Greenland, was in fact FDI in Australia, not Greenland. In 2016, Shenghe acquired 12.5% of the shares of Greenland Minerals and Energy Limited (GME), the Australian licence-holder for the project. The engagement of China Nonferrous Metal Industry’s Foreign Engineering and Construction (NFC) in the Citronen Fjord project—an advanced zinc and lead exploration project in northern Greenland owned by the Australian Ironbark Proprietary Limited exploration group—does not seem to have moved past the signing of a non-binding memorandum of understanding (MoU) between Ironbark and NFC in 2014. According to the MoU, NFC would provide a turnkey fixed-price engineering, procurement, and construction solution for developing the project. However, while NFC was involved in the 2017 feasibility study, it seems to have lost interest in the project and Ironbark has since moved on to other investors. In terms of Chinese FDI, this seemingly only leaves General Nice’s acquisition of the Isua iron ore project in 2015—a proposed large-scale iron ore mine 150 kilometres northeast of Nuuk (for more details, see below).

Key Controversies

Despite the fact very few investments have materialised, Chinese economic engagement in Greenland has been mired in controversy. One controversy concerned the Isua iron ore project. In 2012, media reports revealed that due to the shortage of qualified labour in Greenland, then licence-holder London Mining Greenland A/S (a subsidiary of London Mining Greenland) planned to import as many as 3,000 foreign workers for the construction, most of whom would be Chinese. For the project to be economically viable, the workers would need to be paid below the minimum wage. Apart from concerns about the social impact of such a large influx of foreign workers to Nuuk, which is home to only about 17,500 inhabitants, it triggered intense debates in Greenland and Denmark about immigration regulations and labour rights. As a result of these debates, the Large-Scale Projects Act was passed in Greenland in 2012, which aimed to facilitate immigration and made it legal to pay workers on ‘large-scale projects’ (defined as projects with capital costs exceeding 5 billion DKK, or 760 million USD) below the minimum wage. In 2015, the Hong Kong–based General Nice bought the remains of London Mining Greenland after the latter went bankrupt in the wake of the iron ore price collapse of 2014. General Nice thus acquired the Isua project. However, in November 2021, London Mining Greenland A/S (now a subsidiary of General Nice) was stripped of the licence by the GoG because of a lack of activity at the mining site and missed payments.

Another controversy, which also involved General Nice, concerned the abandoned Danish Grønnedal naval base in southwestern Greenland. The property had been put up for sale but when General Nice expressed an interest in purchasing it, the Danish Government swiftly decided to take it off the market and reinvest in it, allegedly to avoid upsetting the relationship with its close ally the United States.

In 2018, the state-owned China Communications Construction Company (CCCC) was shortlisted to assist with the extension of airport runways in Greenland. In what was widely perceived as an effort to keep China out, the Danish Government stepped in and financed half of the estimated cost, which triggered a political crisis in Greenland when the populist pro-independence Partii Naleraq quit the governing coalition in protest against receiving Danish assistance. CCCC later withdrew from the bidding process, citing problems with securing visas for its employees, which it claimed made it impossible to compete with the other bidders on equal terms.

Political controversy has also followed the Kuannersuit project—mainly for environmental reasons, particularly because uranium will be an inevitable by-product. The issue of how to handle the uranium has been a source of political tension between Denmark and Greenland, and the question of whether uranium mining should be allowed is one of the most divisive political issues in Greenland today. GME finally received approval for the project’s environmental impact assessment in September 2020, but in February 2021, Greenland’s governing coalition collapsed following disagreement over the project and its environmental risks. In the snap general election that followed in April 2021, the opposition Inuit Ataqatigiit party, which campaigned against the Kuannersuit project, won in a landslide. The new government has since halted the project. In November 2021, the GoG restored and strengthened the ban on uranium mining, which had been lifted in 2013 to allow the Kuannersuit project to proceed. 

Chinese involvement in the project has been another source of controversy. Rare-earth minerals are considered a critical and strategic resource in the United States, Europe, China, Japan, and many other countries for their importance for producing advanced communication and green energy technologies, but also modern military weapons. In the past two decades, China has achieved a quasi-monopolistic position in their entire supply chain, from the mining of minerals to processing and producing the advanced materials that are in demand by the high-tech industry. The involvement of Shenghe—a Chinese publicly listed company whose largest shareholder is a subdivision of China Geological Survey—has been viewed by some analysts as a Chinese effort to stay in control of global supply chains. China has in recent years been perceived as making veiled threats of weaponising its control over rare-earth minerals, as it has been accused of doing in the past. The United States has ramped up efforts to establish supply chains independent of China—a task that will take many years.

Key Sources

Research Articles and Reports

Andersson, Patrik, Jesper Zeuthen, and Per Kalvig. 2018. ‘Chinese Mining in Greenland: Arctic Access or Access to Minerals.’ In Arctic Yearbook: Special Section on China and the Arctic, edited by Lassi Heininen and Heather Exner-Pirot, 102–17. Akureyri, Iceland: Northern Research Forum.

Kalvig, Per and Hans Lucht. 2021. Greenland’s Minerals to Consolidate China’s Rare Earth Dominance? No Green Future without China. DIIS Policy Brief, 25 February. Copenhagen: Danish Institute for International Studies. Link.

Martin, Miguel. 2018. ‘China in Greenland: Mines, Science, and Nods to Independence.’ China Brief 18(4): 14–16.

Têtu, Pierre-Louis and Frédéric Lasserre. 2017. ‘Chinese Investment in Greenland’s Mining Industry: Toward a New Framework for Foreign Direct Investment.’ The Extractive Industries and Society 4: 661–71.

Ulrik Pram Gad, Naja Dyrendom Graugaard, Anders Holgersen, Marc Jacobsen, Nina Lave, and Nikoline Schriver. 2018. ‘Imagining China on Greenland’s Way to Independence.’ In Arctic Yearbook: Special Section on China and the Arctic, edited by Lassi Heininen and Heather Exner-Pirot, 6–28. Akureyri, Iceland: Northern Research Forum.

NewspapersSermitsiaq (in Danish and Greenlandic): link.

Cover Photo: Greenland sunset. Credit: Markus Trienke (CC).

Updated on 3 March 2022.


Patrik Andersson is a soon-to-graduate industrial PhD candidate from Aalborg University and the Geological Survey of Denmark and Greenland. His PhD thesis studied Chinese interests in Arctic minerals. He is currently employed as a scientific assistant at the Danish Institute for International Studies (DIIS).