Trump, Greenland, China, and the unenviable predicament of the minor imperialist powers

US President Donald Trump’s public bid to purchase Greenland from its present ‘owner’, the Kingdom of Denmark, has been universally derided as a bad joke. In the words of the Washington Post, “Trump goes full parody”. His response to Denmark’s rebuff has been described as a tantrum. The Danish Prime Minister Mette Frederiksen, posing as the defender of Greenlandic sovereignty, had described the bid as “absurd.” Other Danish politicians said Trump was behaving like “a spoiled child.”

Danish Prime Minister Mette Frederiksen Photo: Clemens Bilan, EPA-EFE

But Trump’s interest, and his snub to Denmark in response to the Prime Minister’s comment, are no joke. Anyone who thinks that the idea of such a huge ‘real estate deal’ is bizarre and impossible is forgetting US history: The United States acquired its present continental extent partly through two such huge ‘purchases’ – the purchase of the French colony of Louisiana in 1803, and the purchase of Alaska from the Russian empire in 1867.

Napoleon Bonaparte sold the French colony of Louisiana to the United States in 1803, doubling the size of US territory. (This portrait of Napoleon by Paul Delaroche was painted in 1814)

What induced the owners of these invaluable colonial possessions to sell? In both cases, the military relationship of forces was the key: in 1803 France had been unable to defeat a slave revolt in its  Caribbean sugar-producing colony of Saint-Domingue; it also faced the prospect of war with Britain. Napoleon calculated that if he refused to agree to the sale, the Louisiana colony might be seized by force anyway, without payment, and France would be unable to prevent it. Similar considerations convinced the Russian emperor, recently defeated by Britain in the Crimea, to part with Alaska. (In more recent times, the United States also purchased what is today the US Virgin Islands from Denmark in 1917: as it entered the Great War, the United States feared that a German invasion of Denmark could give Germany a naval outpost in the Caribbean. As part of the deal, the US relinquished all claims to Greenland.)

Is there the slightest doubt that the military relationship of forces between Denmark and the United States would favour a US takeover of Greenland in some form, should it ever decide to make that move?  The chief thing that makes such a takeover appear ‘absurd’ is lingering faith in the stability of the post-World-War-2 order in Europe, whose alliances and military pacts politically excluded such a grab. But if Brexit teaches us anything, it is that such faith is increasingly out of step with reality: the stability of the European order is vanishing fast. On this question at least, Trump is more closely aligned to the current reality and prerogatives of the class that he represents than are his liberal critics.

Trump’s bid for Greenland is a real reflection of the growing inter-imperialist rivalries that are erupting as the post-World-War-2 order breaks down. It is also closely related to the deepening trade wars between the United States and China. As the melting of the Arctic ice cap opens up new shipping routes between Asia and the North Atlantic, the strategic importance of Greenland grows; so also does the accessibility of its mineral resources.

The renewed US interest in Greenland is in large part due to its reserves of rare-earth metal ores, which are used in the production of new and emerging technologies such as cellphones, lasers, superconductors, re-chargeable batteries, wind turbines and electric vehicles. They are also used in military applications, including night-vision goggles and precision-guided weapons, and the very hard alloys used on armoured vehicles.

Rare-earth metals are the 15 Lanthanide elements on the periodic table, plus Scandium and Yttrium. They are not especially rare – even the rarest of them is more abundant than gold – but economically viable concentrations are distributed very unevenly across the globe, and they are often difficult and hazardous to extract. The production, refining and export of rare-earth metals are massively dominated by China at present, which also has about one-third of known reserves of these ores. US reserves of these minerals are relatively low.

The Rare Earth Elements are the 15 lanthanide series elements, plus yttrium. Scandium is found in most rare earth element deposits and is sometimes classified as a rare earth element. Image by Geology.com.

Before 1970 there was little demand for these metals. One of the first major uses was in colour television sets; to meet this need the US became the biggest producer. China became one of the chief producers by the 1990s, both to supply its own burgeoning electronics industries and for export. By the 2000s, China dominated the world market, accounting for 95% of world production in 2010. China began to restrict exports, while the range of uses, and thus demand, continued to skyrocket, driving the price up. The search then began in earnest for sources outside of China – including searching by Chinese investors seeking to maintain their market dominance. The possibility of China using its position of dominance and further restricting exports of rare-earth metals to the US has been one aspect of the tariff dispute between China and the US.

Rare earth mine at Mountain Pass, California, now owned by a consortium that includes Chengdu-based Shenghe Resources Holding. Photo: Reuters

The biggest estimated reserves of rare-earth metals outside of China (which has 44 million metric tons) are in Brazil and Vietnam, with 22 million tons each, and Russia with 18 million tons. According to an August 20 article in the Financial Times by Harry Dempsey, US enticed by Greenland’s rare earth resources, Greenland may have 38.5 million tons. (This is a much higher estimate than I have read elsewhere, but that may reflect recent explorations.)

Ililissat, Greenland, in the Greenland summer.

The melting of Greenland’s ice caps may be a catastrophic environmental disaster for most of the world’s population, but for the wealthy few, it represents an opportunity for windfall profits. But over and above the profits of the mining operations themselves, imperialist governments will go to war, if necessary, to secure access to the raw materials they need to feed their industries and equip their military forces. In 1941 Japan launched a war against a far more economically and militarily powerful rival, the United States – when it was deprived of oil and scrap iron by a United States embargo.

 

Thule Air Force base, northern Greenland, 2005. Photo: public domain

Greenland became a Danish colony in 1775. Denmark’s sovereignty over the island has always been tenuous, given the island’s large extent, its forbidding climate, and the low level of human occupation. Historically, there were challenges to Denmark’s control by the British and Dutch interests.  There were also splits and re-divisions of possessions among the Scandinavian powers themselves – Norway attempted unsuccessfully to renew its claim to Greenland in 1931. The US first considered purchasing Greenland at the time of the Alaska purchase in 1867; a report was commissioned by Secretary of State William Seward, however an offer was never made at that time. A second proposal was discussed in 1910. In 1946 the United States made a concrete offer to Denmark to purchase Greenland, as part of its military strategic of encirclement of the Soviet Union. The offer was rejected by Denmark; however the US was permitted to build Thule Air Force Base in the far north, which was sufficient for its purposes at the time.

None of these proposals – nor President Trump – took into account the opinions of the population which inhabits Greenland. There are at present about 58,000 people living in coastal settlements of Greenland, about 80-90% of whom are indigenous Inuit. Fishing and fish-related products account for 95% of exports. There is also some sheep-farming and vegetable-growing, and mining. Some Inuit communities in the far north live mostly by subsistence hunting and fishing.

A Greenlandic movement for political self-determination took shape in 1979, when a referendum supported autonomous government for the territory. Since that time Greenland has been a self-governing overseas administrative division of Denmark, with two representatives in the Danish Parliament, along with its own 31-member parliament and its own Prime Minister. Denmark controls foreign relations, currency, and defence.  Political parties include the Inuit Ataqatigiit (Inuit Brotherhood), which wants complete independence from Denmark, as well as other parties that favour closer ties with Denmark.

Greenland’s political autonomy was put to the test when, faced with the devastation of its fish stocks by overfishing, it sought to develop mining. Among those interested in developing its rare-earth mineral deposits was… China. That caused some consternation in both Copenhagen and Washington.  When Greenland announced plans to build three international airports capable of tasking the big commercial planes, China was one of the countries bidding for the job – until pressure from both Copenhagen and the Pentagon scuttled the bid. (A BBC reporter, surveying opinion in the Greenlandic capital Nuuk, found that opinion divided along ethnic lines – Inuit generally favoured the Chinese investment, Danes opposed it.)

Denmark thus finds itself stuck in a vise as the economic and military frictions between the United States and China ramp up. On the one hand, Chinese investment is undermining the very basis of its ‘ownership’ of Greenland. On the other, its indispensable military ally is also the one that wants to gobble up what is possibly its greatest economic asset.

 

Across on the other side of the globe, a very similar predicament faces the minor imperialist powers of Australia and New Zealand.

Australia’s economy has enjoyed a virtually uninterrupted boom since 1991 – albeit somewhat slowed recently – riding on the back of the industrial transformation of China. Australia’s mineral exports to China, including coal and ores, have grown to the point where China is now by far the largest  destination of Australian exports (about 34%, compared to 4% to the US and 1% to the UK – 2018 figures). It is also the largest source of imports to Australia (25%, compared to 10% from the US and 2% from the UK).

New Zealand’s recent economic growth, although far more patchy, has also depended heavily on closer integration with China. As the urbanisation of China’s population proceeds, and with it the integration of women into the workforce, the demand for milk powder, especially infant formula, has consequently risen dramatically. The dairy industry has massively expanded in New Zealand over this period. China also imports meat and pine logs from New Zealand.

Yashili New Zealand Dairy, a unit of Chinese-owned Yashili International Holdings, invested $220m in a dairy plant at Pokeno, south of Auckland, which is capable of producing 52,000 tonnes a year of infant formula.

In 2018 21% of New Zealand’s exports went China, compared to 14% to Australia, 10% to the US and 4% to the UK. The integration of New Zealand’s economy with China’s goes a lot further than trade: for example, Chinese capitalists have invested in dairy processing factories in New Zealand and farms. Several former New Zealand capitalist political figures, including former Prime Minister Jenny Shipley, have joined the boards of Chinese banks.

But both Australia and New Zealand are caught in the same vise as Denmark. Despite their huge and growing economic dependence on China, they will not and cannot walk away from their strategic military-political alliance with the United States. In July 2018 an official Strategic Defence Policy Statement released by the New Zealand Defence Minister Ron Mark labelled China a ‘threat to the international community’. By any standard, this is extraordinary language for a Minister to use to describe his country’s principal trading partner! The Statement specifically referred to China’s actions in building new bases in the South China Sea. A spokesperson for China’s Foreign Ministry “lodged stern representations with New Zealand on the wrong remarks it has made on China”.

“We urge New Zealand to view the relevant issue in an objective way, correct its wrong words and deeds and contribute more to the mutual trust and cooperation between our two countries,” she said. “China’s constructions in its own territory by the South China Sea are completely justified and legitimate. Nobody is in the position to make irresponsible remarks on that.”

The diplomatic rift widened further when a report by the Government Communications Security Bureau (GCSB), a New Zealand spying agency, said that allowing the Chinese telecommunications firm Huawei to develop New Zealand’s 5G digital network posed a ‘significant national security concerns.’ Under pressure from the United States, the government cancelled the initial proposal involving Huawei, while not ruling out the firm’s future participation. (Australia imposed a similar ban. Other US allies came under similar pressure from the US; the UK allowed Huawei to participate, while Canada equivocated.)

In response, China dumped a major tourism promotion and postponed an upcoming visit to China by Prime Minister Jacinda Ardern. “There is a sense in China that Huawei has not been treated fairly,” Massey University professor Henry Chung said. Huawei flagged the possibility that it might pull out of the New Zealand market altogether.

Australia and New Zealand also contend directly with China for domination of the Pacific Island nations, in a region they long considered to be “our patch”, and in the case of Australia, their own offshore prison facility for migrants. The foremost military force in the region has long been the US Navy, based in Guam.

At a recent meeting of the Pacific Islands Forum, a gathering of leaders of Pacific Islands nations plus Australia and New Zealand, in Tuvalu, a major issue on the table was climate change. Many Pacific islands are atolls rising only a metre or two above sea level, and are already facing major problems of inundation and contamination of fresh water supplies due to sea level rise. When the Forum discussed a statement calling for urgent action to limit carbon emissions, Australia objected, insisting that all reference to scaling down the use of coal be deleted.

Australian Prime Minister Scott Morrison at the Pacific Islands Forum in Funafuti, Tuvalu. Photo: Mick Tsikas/EPA

Faced with vociferous opposition to this, the Australian Prime Minister imposed his will in time-honoured fashion, by referring to the money Australia spends in the region. Fiji Prime Minister Voreqe Bainimarama described Morrison’s approach as “very insulting and condescending.” When Bainimarama’s government was suspended from the Forum in 2008 at the behest of Australia and New Zealand, he turned to China: Chinese aid to Fiji increased from $1 million to $161 million in two years. Bainimarama has argued that Australia and New Zealand should not have voting rights at the Forum.

Fiji Prime Minister Voreqe Bainimarama and New Zealand Prime Minister Jacinda Ardern at Pacific Islands Forum in Tuvalu. Photo: Fiji government

China has massively increased its aid and investment in the wider Pacific region, especially in Papua New Guinea, where it has built infrastructure projects such as roads, hydroelectric power, and hospitals.   Chinese oceanographic ships are mapping the seabed, planting buoys and sensors, for both seabed mining and military purposes. The seabed around the Cook Islands is rich in nodules containing manganese, cobalt and rare-earth metals. For much the same reasons as the Greenlandic Inuit, the peoples of the Pacific region welcome this Chinese aid and investment as a means of reducing their dependence on their traditional imperialist overlords.

A nuclear-powered Type 094A Jin-class ballistic missile submarine of the Chinese PLA Navy. China is increasingly challenging US naval dominance in the Pacific. Photo: Reuters

Australia expressed concerns that a Chinese-sponsored deep-water port development in Vanuatu could have military capabilities. Australia and the US are meanwhile bolstering their own military presence in the region. Manus Island in Papua New Guinea, the site of one of Australia’s notorious prison camps for migrants seeking refuge in Australia, is to be developed as a joint Australian-US military base.

The Financial Times quotes Euan Graham, executive director of the Asia department of La Trobe University in Melbourne. “This is a pre-conflict type of shadow game, a geopolitical non-war version of island-hopping. The Pacific has become strategic again for the first time since World War II.”

Like Danish imperialism, the minor imperialist powers of Australia and New Zealand find themselves between a rock and a hard place. While China’s aid and investment steadily undermines their dominance of the Pacific, the economic price they will have to pay for maintaining their political and military alliance with the United States as the US-China trade war intensifies – not excluding the loss of their largest export market – could be catastrophic.

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