Notes

A tough call in the Arctic. For months, Norway’s Port of Kirkenes has been negotiating with the Chinese state-owned shipping firm COSCO (not to be confused with an American big-box retailer) on a long-term lease to operate part of the port. The deal would include significant investments in Kirkenes.

COSCO is massive: Its container fleet has more capacity than any other shipping company in the world, and it holds major stakes in ports in Belgium, Germany, Greece, Italy, Spain, and the United States.

The deal looks sweet for Kirkenes—but it might fall through.

Earlier this month, Norway’s minister of justice said the government was prepared to block it; the country’s center-right opposition party has asked Prime Minister Jonas Gahr Store to intervene; and as Gahr Store visited  Beijing this week—meeting with President Xi Jinping and a delegation of Norwegian business leaders—there was no mention of Kirkenes at all. What’s going on here?

Kirkenes isn’t an ordinary European port. It’s above the Arctic Circle, only a 20-minute drive from Russia and 53 nautical miles from the Russian Port of Pechenga. And ever since Russia invaded Ukraine in 2022, Kirkenes and ports like it have become more strategically important.

At the same time, Moscow and Beijing have been working more closely together in the Arctic; and according to Norway’s security service, the Chinese Communist Party is trying to build up its position and intelligence activities there. COSCO itself, meanwhile, has links to the CCP—every COSCO ship carries a party official—and even, according to the Australian Strategic Policy Institute, links to the Chinese military.

As Martin Wolf emphasized on The Signal earlier this year, security concerns like these have become a primary focus for the U.S. and its European allies in international trade—especially trade with China.

After the fall of Soviet communism more than 30 years ago, the West’s priorities in global commerce had been opening new markets and increasing trade around the world. But as geopolitical competition with China has been heating up in recent years, the economics of deals like the Kirkenes lease—however sweet—are becoming less important than their implications for global and national security.

—Michael Bluhm