"Shifting Ice" - New Strider Report Reveals Russia's Increasing Reliance on the People's Republic of China to Develop and Control the Future of the Arctic

News provided by

Feb 07, 2024, 09:00 ET

New data shows Russia and China working hand-in-hand to establish security partnerships and expand infrastructure development and energy trade along the Northern Sea Route – with enormous implications for Arctic nations and private-sector companies

SALT LAKE CITY, Feb. 7, 2024 /PRNewswire/ -- Strider Technologies, Inc. the leading provider of strategic intelligence, today released a new report, which details unprecedented levels of cooperation between the Russian Federation and the People's Republic of China (PRC) in the Arctic region since Russia's invasion of Ukraine in 2022.

The report demonstrates how the war in Ukraine and continued geopolitical isolation are forcing Moscow to adjust its strategy to develop and control the Arctic. Specifically, the report highlights Moscow's increased reliance on PRC-owned companies and private investment to help develop the Northern Sea Route (NSR) and infrastructure for energy exploration, processing, and transportation.

"While previous research has predominantly focused on Russia's military presence in the Arctic, our findings reveal a strategic pivot by Russia, marked by decreased government spending and a remarkable policy shift to include the People's Republic of China (PRC) and private sector investment to maintain its Arctic dominance," said Eric Levesque, COO and Co-founder of Strider. "For years, Russia has sought to limit the PRC's involvement in the Arctic. This pivot underscores the diplomatic and economic isolation Moscow is experiencing in the wake of its invasion of Ukraine and growing reliance on the PRC for its economic development and security goals. However, Russia's adept use of cross-border partnerships and private sector engagement in Arctic development demonstrates a more effective approach than that of its Western counterparts, staying true to its historical reliance on private enterprises to bolster state initiatives."

Using proprietary data, Strider's Global Intelligence team shares how Sino-Russian cooperation in the Arctic cuts across commercial and security lines, the latest example of the whole-of-society approach both nations are taking in this new era of geopolitical conflict.

China Seizes A Golden Opportunity in The Arctic
The Arctic is a clear example of the "no limits'' partnership announced by Moscow and Beijing just before the Ukraine invasion. In response to international sanctions and geopolitical isolation, Russia opened up the Arctic to the PRC like never before. In return, the PRC has established a major foothold in the region by providing the investment and support Russia needs to further develop the Arctic while waging war in Ukraine.

Key findings from the report include:

The Arctic Is Open for (PRC) Business - Strider found that during the 18 months from January 2022 to June 2023, 234 PRC-owned companies registered to operate in Russian-controlled Arctic territory, an 87 percent increase in registrations compared to the two full years prior from 2020-2021. The escalation in activity is a stark departure from Russia's previous efforts to limit PRC involvement in the region.

The PRC Is Filling Technology Void Left By the West - As Western companies pulled out of projects following Russia's invasion of Ukraine, PRC-owned companies stepped in to provide key technologies. Strider highlights a key example: the Arctic LNG2 Project. When Western companies left, companies like the China National Petroleum Corporation (CNPC) and China National Offshore Oil Corporation (CNOOC) provided investment while other PRC entities supplied key technologies including gas turbines to keep the project alive. Today, as a result of PRC funding and technology, this project is still alive and could become one of Russia's primary LNG shipment locations, despite Western efforts to kill the project.

A Major Shift in Russia's Arctic Defense Funding - Strider analyzed spending by five major Russian defense bodies in the Arctic since 2015 and discovered that aggregate expenditures dropped sharply in the lead-in to the Ukraine invasion. From peak spending in 2019, the cumulative spending of the five organizations declined by approximately 90% by 2021. By comparison, overall defense spending increased by 4% in that period.

Russia Pivots to the Private Sector in the Arctic - As Russia's spending at Arctic defense organizations plummeted, efforts to attract private investment increased sharply. The Kremlin's budget for the Ministry for the Development of the Russian Far East and Arctic (MDRFEA), the government body responsible for the socioeconomic development of the region, has increased almost 300% since 2016, according to Strider's data.

Over that same period, private-sector company and individual entrepreneur participation in Kremlin-backed special economic zones in the region increased from approximately 230 in 2016 to more than 4,000 in 2023.

The Northern Sea Route - A Growing Source of Trade

Russia-PRC trade via the Northern Sea Route (NSR) is growing quickly. In 2023, at least 11 ships transported Russian crude oil to the PRC via the NSR. For comparison, only one "trial" voyage to the PRC was made in 2022.

Unprecedented Security Activities - The Russian Federal Security Service and the PRC Coast Guard signed a memorandum of understanding in April of 2023 covering cooperation on maritime law enforcement in the region, including counterterrorism, arms and drug smuggling, illegal migration, illegal fishing, and rescue operations. In August 2023, Russian and Chinese ships participated in Naval exercises in the Bering Sea off the coast of Alaska.

To read the full report visit https://striderintel.com/resources/shifting-ice-russias-increasing-reliance-on-the-private-sector-and-the-prc-in-the-arctic/.

About Strider
Strider is revolutionizing the way companies, government agencies, universities, and research institutions secure their IP and technology and compete in a new era of global strategic competition. Our trailblazing technology and strategic intelligence solutions enable clients to proactively identify, manage, and respond to state-sponsored IP theft and supply chain vulnerabilities. Strider has operations in Salt Lake City, UT, Washington, D.C., and London, U.K.

Strider Media Contact: Dan Palumbo, [email protected], 3018752356

SOURCE Strider Technologies, Inc.