How the Pentagon Countered China’s Designs on Greenland

Washington urged Denmark to finance airports that Chinese aimed to build on North America’s doorstep
By Drew Hinshaw and Jeremy Page

Apartment buildings in Greenland’s capital, Nuuk, population 17,500. Greenland's population, though small, is becoming more and more urbanized. 

NUUK, Greenland––The Pentagon raised an alarm last year over what it deemed a troubling development in this ice-cloaked territory: China was looking to bankroll and build three airports that could give it a military foothold off Canada’s coast.
Greenland’s prime minister had flown to Beijing in 2017 and asked Chinese state-run banks to finance the new commercial airports, including a big one for one of the smallest capitals on earth, Nuuk, which can now be served only by propeller planes.
The bankers were interested, people at the meetings said, so long as a Chinese company constructed the airports.
When word of the incipient offer reached then-U.S. Defense Secretary Jim Mattis early last year, he called on Denmark—whose kingdom includes Greenland as a self-governing territory but whose government had been reluctant to fund the airports.
Beijing must not be allowed to militarize this stretch of the Arctic, Mr. Mattis told his Danish counterpart Claus Frederiksen at a meeting in Washington in May, according to officials close to the discussion.

People boarding an Air Greenland jet bound for Copenhagen at Kangerlussuaq airport, the only air strip in Greenland that can accommodate large jet aircraft.

For years, the U.S. and Europe had generally been spectators to a global Chinese building spree.
To forge new global trade and infrastructure links, Chinese banks have been financing hundreds of projects, mostly built by Chinese companies, including roads, railways, pipelines and power plants.
Western governments have been less willing to lend taxpayers’ money for risky infrastructure in distant lands.
But that reluctance is ebbing as the geopolitical fallout emerges from the financial difficulties several countries face from Chinese infrastructure loans.
In one notable case, Sri Lanka, unable to service a Chinese loan, granted a Chinese company a 99-year lease on a port close to key Indian Ocean shipping lanes.
Alarmed, the U.S. is joining with allies to offer alternative sources of infrastructure financing.
The sums involved are still dwarfed by China’s plans, but in July, the U.S., Japan and Australia announced a partnership to invest in infrastructure in the Indo-Pacific region.
The European Union unveiled similar plans in October.
Pentagon officials expressed worry that Greenland’s aid-dependent government could struggle to repay a loan for the $555 million project, and after a few missed payments, China’s government could take control of runways that could potentially be used by warplanes on an island where the U.S. has a missile-tracking air force base.
A presence in Greenland could also help China access new shipping lanes and resources under the Arctic’s retreating ice.
Months later, after the airports question precipitated a collapse of this polar island’s government and serial visits by U.S. and Danish officials, Greenland announced that its new capital airport would be built with loans backed by the Danish government, as would another 400 miles up the coast. Greenland will finance the third facility, and no role for China is foreseen.

Oqaatsut, a small village of about 30 inhabitants, faces an existential question of survival as the younger generation leaves for larger towns in Greenland.

In an unusual step, the U.S. Defense Department has offered to chip in with airport infrastructure that would help both civilian and military or surveillance planes land on the country’s coast.
Greenlandic officials say they hope the airports will open up one of the world’s most inaccessible places, allowing in affordable flights bearing tourists, repatriates and immigrants.
U.S. officials see the episode as demonstrating one model for countering China’s global ambitions: calling on old allies to engage in places where Beijing’s ascent is challenging American power.
“When you have an issue like this arise, you see the strength of those alliance relationships,” a senior Defense Department official said.
The Chinese foreign ministry didn’t respond to requests for comment on the airport project but in a statement said China had good relations with Greenland and Denmark, adding that it encouraged Chinese companies to help Arctic development.
A former colony of Denmark, which granted it limited self-rule in 2009, Greenland doesn’t have roads between its cities. 
Residents move around using a network of domestic airstrips and helipads that stretches back to World War II.
Danish Prime Minister Lars Lokke Rasmussen repeatedly turned down requests to lend money for international airports on the island, Greenlandic officials say.
After last year’s meeting between Mr. Mattis and Denmark’s defense minister, however, Mr. Rasmussen’s government rapidly pulled together a funding package that Greenlanders found surprisingly favorable.

Street signs in Nuuk, Greenland’s capital and largest city. Residents of the world’s largest island depend on a World War II-era network of airstrips and helipads to get around.

“He was not into it at all—until the Chinese showed interest,” said Aleqa Hammon, Greenland’s former prime minister, speaking of Mr. Rasmussen.
Mr. Rasmussen’s office declined to comment.
Copenhagen’s volte-face is a measure of how China’s economic and military rise is intensifying international competition over the Arctic, especially Greenland, whose tiny government is slowly moving toward independence from Denmark.
China declared itself a “near-Arctic state” last year, outlining plans to carve new shipping routes through the region’s melting ice and exploit the natural resources underneath.
Greenland is key to China’s strategy, which it calls the “Polar Silk Road.”
“China needs to carefully consider the possibility that a small and weak Greenlandic nation could emerge in the Arctic in the next 10 years,” wrote Xiao Yang, director of the Arctic Research Center at Beijing International Studies University, in a recent paper.
“This will be the key node for the successful implementation of the Polar Silk Road.”
In 2016, a Chinese government-owned company tried to buy an abandoned naval base in Greenland; Denmark sent four sailors to live there and shoo away Chinese interest.
Chinese firms hold a stake in uranium and rare-earth mines on the island, and a state-owned university recently announced it would build a polar research antenna here.
The airport contest kicked off with a series of meetings in Beijing in November 2017 between Greenland’s government and Chinese banks.
Denmark, eager to appear supportive of Greenlandic sovereignty, had helped arrange the meetings, including with China Development Bank and the Export Import Bank of China.

Downtown Nuuk. Greenland's population is becoming more and more urbanized, as more people leave a traditional lifestyle and move to the city, which now has about 17,500 inhabitants.

The banks seemed to know little about Greenland, said Johannus Egholm Hansen, board chairman of Greenland’s state-owned Kalaallit Airports company, who attended those meetings.
“It was early days,” he said.
The banks didn’t respond to requests for comment.
After Kalaallit Airports short-listed a Chinese construction firm to build the new airports, Denmark conveyed its alarm to the Pentagon.
After Mr. Mattis got involved, Denmark’s government asked a consortium led by Danske Bank to help assemble an alternative financing package.
Officials in Greenland were pleasantly surprised by the terms.
“Even Chinese funding is not as cheap as this,” Mr. Hansen said.
Denmark undertook to buy equity and guarantee loans at a roughly 1% interest rate.
Greenland’s government expected to spend up to quadruple that in borrowing costs.
The savings will cut $130 from the price of a round-trip ticket from Europe to one of the world’s most unreachable islands, flag carrier Air Greenland estimates.
“This is an investment in national security, an investment to make sure we can stay on a good foot with the United States,“ said retired Adm. Nils Wang, a former head of the Danish navy and an expert on Arctic security affairs.
Not everyone in Greenland has been pleased about the reassertion of Western power in the Arctic.
As the terms of the new deal emerged in September, the government of Prime Minister Kim Kielsen collapsed and Parliament launched into months of arguments.
Pacifists expressed their continued mistrust of the U.S. military, which once secretly started construction on a nuclear-missile base here.
Many lawmakers said they disliked the influence Denmark would gain over the new airports, and a pilot in the legislature quarreled over the technical specifications of the runways.
Finally, in November, exhausted lawmakers approved the project.
“It’s basically going to make Greenland part of the globalized world,” said Air Greenland CEO Jacob Sorensen, “instead of being this isolated island up in the middle of the North Atlantic.”

Rogue Nation

Everyone finally agrees China can't be allowed to take over the world
By James Jay Carafano

Oh my, how times have changed.
Huawei executives doing the perp walk. 

American universities shuttering Confucius Institutes. 

Voters in the Maldives, Sri Lanka and elsewhere rejecting leaders who have cozied up to China. Malaysia and others demanding better deals from Beijing or otherwise trying to dig their way out of the Chinese debt trap.
The days when people were OK with China taking over the world are coming to an end. 

Fast.
For years, supporters of Chinese policies argued that a rising China would grow to accept international norms and be a net contributor to global peace and prosperity. 

Meanwhile, critics made gloomy predictions that an increasingly powerful China would exert an increasingly destabilizing influence.
That argument is over.
Chinese telecom giant Huawei has become the posterchild for what’s wrong with China – and with good reason. 

Rather than act as a responsible global company from a responsible nation, Huawei has acted like a pirate on the high seas, abiding by no laws but its own. 

Now, the chickens are coming home to roost.
Headquartered in Shenzhen, Huawei Technologies Co. Ltd. describes itself as an “employee-owned” business, claiming that its approximately 80,000 employees hold almost 99 per cent of its stocks. However, the vast majority of those shares are controlled by a small group of people who enjoy close ties with the Chinese government and the Communist Party. 

Few people doubt that Huawei operates as an arm of the government, and U.S. intelligence agencies have warned American citizens not use the company’s products and services.
Meng Wanzhou, Hauwei’s chief financial officer, is under indictment for attempting to circumvent U.S. sanctions on Iran. 

She was arrested in December in Canada, and U.S. officials have now filed for extradition.
Separately, Huawei is also under indictment for engaging in illegal trading practices – mostly stealing stuff from T-Mobile. 

Stealing intellectual property from U.S. firms is nothing new for Chinese firms. 

Indeed, intellectual property theft is the centerpiece of the U.S. trade representative’s November report on Chinese business practices.
Oh, there are other charges as well, such as the Chinese government’s highly organized attempt to subvert international trade sanctions. 

But the trade report is replete with evidence that Huawei is not really a private company gone rogue. 

Rather, it appears to be just another corporate puppet on Beijing’s string, one deeply engaged in economic warfare.
But don’t blame the growing disenchantment with China on Huawei alone. 

It began two years ago, at the19th Chinese Communist Party Conference, when Xi Jinping laid out his expansive vision for China’s role in the global economy. 

His “Belt and Road Initiative” destined to encircle the world with Beijing’s golden tentacles; together with his expansive territorial claims, he surely caused the hearts of the party faithful to quicken.
But Xi also got the rest of the world rethinking the wisdom of handing China the keys to the global car.
Since then a great deal of research has been devoted to analyzing and illuminating China’s behavior. One notable report from Sharp Power explains how China manipulates information. 

Another, from the Center of International Private Enterprise, explains how China uses “corrosive capital” to undermine the rule of law and threaten democracy.
Today, countries that used to think of China as a benevolent checkbook are starting to question whether it was wise to turn over their telecom structure to a company that does the bidding of an aggressive foreign power with only its own interest at heart.
Now that China has the world’s attention, the question is: What’s next? 

This is no time for a new Cold War, but the Trump administration has been right to let China know that corrupt business practices and expansionist territorial claims will not go unchallenged. 

The U.S. can and must defend its interests for the long term.
The dust-up over Huawei aside, there’s a good chance the U.S. and China will cut a trade deal in the next 30 days. 

That would not be a bad thing. 

Even a limited deal, for a limited time, would show that Washington has Beijing’s attention, improve some market access for the U.S., and remove uncertainties from global markets.
As for dealing with rogue companies like Huawei, the U.S. should emphasize the necessity of abiding by the rule of law. 

Washington must not trade away criminal prosecutions in exchange for trade deals or other “concessions” from Beijing. 

When people break the law, they should be prosecuted for their crimes – not be used for negotiating “leverage.”
Similarly, per the Huawei/T-Mobile case, Chinese companies that steal trade secrets should be subject to the full range of legal punishments, including sanctions as well as criminal prosecutions.
Further, companies that knowingly use stolen intellectual property should be considered traffickers in stolen goods (a federal offense). 

Once convicted, they should be punished the way any company or individual would be for trafficking in stolen physical goods.
The world is wising up to Beijing’s “good guy” act. 

It’s time for China to pay the piper.