KIRKENES, Norway — Four hundred kilometers north of the Arctic circle, a tiny Norwegian town is playing big-league politics.

Kirkenes, situated just 14 kilometers from NATO’s northern land border with Russia, is no stranger to geopolitical games. But while the world’s superpowers bicker over the rules, Kirkenes’ approximately 3,500 residents pride themselves on keeping the ball in play. Norwegians drive to Russia for cheap gas; Russians come to Norway for high-quality diapers; some end up married. Daily life on this far-flung peninsula has settled into a fragile equilibrium.

But with a new player threatening to enter the fray, this sense of balance might be short-lived. China is pulling no punches when it comes to the Arctic, and its recent polar push has put the United States — a major player in Arctic politics — on high alert.

Rune Rafaelsen, Kirkenes’ charismatic Labor Party mayor, doesn’t share Washington’s concern. In fact, he sees nothing but opportunity. “I don’t believe in trade wars,” he told POLITICO, pouring coffee from a large camping flask in his office at the town’s northern edge, a piece of traditional Chinese art hanging on the wall behind him.

“I will do everything I can to stimulate more trade and better connection, also with China,” he said.

“There is no alternative for the Chinese" — Rune Rafaelsen, Kirkenes’ Labor Party mayor

China published its first Arctic white paper in January 2018, despite not actually owning any Arctic territory. In an icy twist to its Belt and Road Initiative, the rising superpower outlined the economic importance of the region and called on Chinese businesses to participate in the development of Arctic shipping routes.

Kirkenes happens to sit at the western edge of one such shipping route. The Northern Sea Route stretches from far-East Siberia along the Russian coastline to the Barents Sea, and has long been touted as a desirable alternative to current Asia-to-Europe passages. For one, it shaves about 40 percent off the distance. It also avoids the geopolitically tense Suez Canal. And in a special bonus for China, it dodges the heavy U.S. Navy presence in the Straits of Malacca. The catch? Thick sea ice has made the route historically unnavigable, except by specially equipped vessels during certain intervals during the summer.

But as climate change ravages the Arctic, the Northern Sea Route is becoming slushier year-on-year. In 2018, the first container ship cruised the Northern Sea Route, and this year, transit volumes increased by 40 percent, reported the Barents Observer (although most were related to the Yamal LNG plant, a China-Russia natural gas joint venture on the Russian coast, rather than regular cargo).

Some experts argue that the complexities of far-North transit — including increasingly unpredictable ice floes and severe winter storms — make even a warmer Arctic inhospitable to commercial interests. Maersk, the global shipping giant that tested the waters in 2018, insists it doesn’t see the Northern Sea Route as a viable alternative to existing routes for its own vessels.

Still, a more crowded Northern Sea Route is likely a question of “when,” not “if.” And China, less constrained by budget and electoral cycles than its global rivals, has the luxury of the long view.

Chinese state-owned shipping company COSCO has made no secret of its intention to ramp up its activity along the Northern Sea Route. At a conference in March this year, it flagged Kirkenes as a location of strategic interest, according to the Barents Observer. And in May, the town hosted a delegation from state-owned China Communications Construction Company Ltd. (CCCC), the world’s largest port infrastructure developer.

For Kirkenes, whose fluctuating fortunes have long been tied to an on-again, off-again iron-ore mine on the western edge of the peninsula, Chinese interest in the thawing Arctic looks like a lifeline.

“There is no alternative for the Chinese,” Rafaelsen said, pointing to the geography of Norway’s northern archipelagos. “It’s not Tromsø, it’s not Narvik, it’s not Bergen.” Kirkenes’ unique position as the first ice-free port on the European side of the Northern Sea Route, he claims, makes it the ideal place for an Arctic shipping hub.

* * *

To fulfill that vision, Kirkenes will need much more than a port. Goods landing in the European Arctic are still far from the hungry markets of the major cities further south, and currently, there’s no way to get them there.

To solve this problem, the Norwegian, Finnish and Estonian governments have explored building various sections of a so-called Arctic Corridor, including a railway linking Kirkenes to Rovaniemi, in Finnish Lapland, and an undersea tunnel connecting Helsinki to Tallinn, Estonia.

But these projects are expensive, and with the future of the Northern Sea Route still uncertain, governments have been reluctant to put money on the table. In February, the Norwegian-Finnish working group scoping the Arctic railway declared the project commercially unviable under current cargo estimates. The Finnish and Estonian governments have been sitting on a feasibility study of the Helsinki-Tallinn tunnel since early 2018. Frustrated by government inaction, some northern entrepreneurs have taken matters into their own hands.

“This is the center of Norway … This is the closest Norway comes to something that is important regarding foreign policy. Nothing is happening in Oslo" — Rune Rafaelsen

In March this year, Finnish entrepreneur Peter Vesterbacka, best known as a creator of the hit game Angry Birds, signed a €15 billion deal with Beijing-backed investment firm Touchstone Capital Partners — as well as three Chinese construction firms — to build the Helsinki-Tallinn tunnel, which he says will be operational in 2024. If the agreement bears fruit, it will be the largest Chinese investment in Northern Europe.

Since then, Kirkenes-based public development company Sør-Varanger Utvikling has inked a preliminary deal with Vesterbacka’s company, FinEstBayArea Development, to build the Arctic railway.

Sør-Varanger Utvikling Chief Executive Kenneth Stålsett insisted it was too early to talk about funding sources, but acknowledged that China’s interest in the region certainly presented “an opportunity,” as well as some uncertainty about whether the Norwegian government would approve large amounts of foreign funding for this kind of project.

But Rafaelsen says drawing attention to the question of foreign investment is part of his strategy. He is using the specter of Chinese development to show Oslo that “we should own our own infrastructure.”

“This is the center of Norway … This is the closest Norway comes to something that is important regarding foreign policy. Nothing is happening in Oslo,” Rafaelsen said. “They don’t understand what’s going on up here. They don’t have a clue.”

At Norway’s foreign ministry, State Secretary Audun Halvorsen said the increase in shipping activity in the Arctic region was mainly related to “petroleum projects in Russia, fishing activity and cruise tourism,” adding: “The commercial use of the Northern Sea Route as a transit route between Europe and Asia remains limited. A number of factors can explain this, such as demanding weather and ice conditions.”

The Norwegian official said China had “so far played a constructive role” as an observer in the Arctic Council.

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For a week in February this year, Kirkenes’ pedestrian thoroughfare gleamed red under the glow of decorative Chinese lanterns. As part of an annual cultural festival, the town transformed itself into “The World’s Northernmost Chinatown.” A special Chinese-style gate popped up in the town center, and visitors from China’s Harbin Theater Arts College performed a traditional dance for the residents of Kirkenes. The Chinese ambassador to Norway, Wang Min, opened the festivities alongside Rafaelsen.

Michael Miller, one of the festival organizers, said the idea behind this year’s theme was “to see what Kirkenes’ possible future would be with ... indications from China that they are really interested in this part of the world.”

Chinese tourism in Kirkenes has exploded over the last five years, according to Miller. (It’s not a phenomenon unique to Kirkenes — the Arctic has become a hotspot for Asian visitors.) This, combined with talk of China’s commercial interest in Kirkenes, inspired Miller and his colleagues to involve locals in the conversation about what the future of their town should look like.

When POLITICO visited months later, opinions on the ground ran the gamut from unaware to cautiously optimistic to fearful.

Pål Riise, a Kirkenes resident who lives on a disability pension, called himself “a little bit paranoid.”

“If you let the Chinese buy one rock … they will be here forever,” he said.

Others seemed less phased. Kåre Tannvik, who runs the Kirkenes Snowhotel, a major tourist attraction, thinks China could bring stability as well as opportunity.

“I like it, because [right now] there are two boys quarreling. If there are three — Russia, America and if we have China here — it is a chance for peace, to take down the tension,” he said. He’s a supporter of the Arctic railway, and believes China will be involved.

Jostein H. Maehla, a student in his final year at high school in Kirkenes, said the railway “definitely should happen.” The China question will be difficult, he said, but “if the big boys come and they give you cash for something, you better accept it.”

The town may never reach consensus on the question of Chinese investment. But it’s clear that many of its inhabitants are excited by the prospect of a more connected Arctic. Stålsett, who is spearheading the Kirkenes-Rovaniemi railway project, put it this way: “People live here, we have our jobs here, our families … We want something to say in the development, we don’t want to be looked at like a zoo.”

“Europe needs to define its own narrative. What our ambitions are economically and security wise, and what kind of role we want for China there in the Arctic" — Jari Vilén, Finnish diplomat

On the other hand, the indigenous Sámi people have been protesting against the railway for years. They believe it would cause massive disruption to local ecosystems, particularly reindeer migration patterns, and open up their land to exploitation by large corporations. In May this year, after Vesterbacka signed the letter of intent with Sør-Varanger, Sámi youth groups protested outside Finnish parliament.

Jari Vilén, a Finnish diplomat and Arctic adviser at the EU Commission’s in-house think tank, the European Political Strategy Centre, says Europe has a role to play in the discussion about Arctic development.

“Europe needs to define its own narrative,” he said. “What our ambitions are economically and security wise, and what kind of role we want for China there in the Arctic.”

“We don’t have time to wait because other places are acting now,” he said, echoing the Arctic strategy paper released by the Commission think tank in July.

“[U.S. President Donald] Trump, in his own style, made clear his own interest in the Arctic,” Vilén said. “And they [China] have it on paper, they have it in black and white, but we haven’t really been able to define what we have to do.”

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In an October meeting with Finnish President Sauli Niinistö, Trump said, in a thinly veiled reference to Beijing, “as you know, there are other people coming into the Arctic, and we don’t like it. And we can’t let it happen, and we won’t let it happen.”

This comment came off the back of his August attempt to purchase Greenland from Denmark, a widely-ridiculed maneuver that nevertheless demonstrated Washington’s real fear of losing its strategic foothold in the Arctic.

Last year, the U.S. Department of Defense reportedly pressured the Danish government to fund two new airports in Greenland, in a move apparently driven by concern that aid-dependent Greenland could fall victim to China’s so-called “debt-trap diplomacy.” (Hypothetically, were Beijing to put up the money for the construction, it could seize control of some strategically-located Arctic runways should Greenland fail to repay its loans.)

Greenland later announced that Denmark would be backing the new airports, and in June this year, the CCCC — China’s state-owned infrastructure behemoth — withdrew its construction bid, citing concerns around worker visas and receiving equal treatment in the selection process.

Rafaelsen is essentially betting on a similar dynamic playing out in Kirkenes: Attract enough attention to the China question, and Europe might just decide to take matters into its own hands.

Philippe Le Corre, a non-resident senior fellow with the Carnegie Endowment for International Peace who specializes in Sino-European relations, says European attitudes toward China have certainly hardened over the last year. “There is a big backlash against China in Europe,” he said.

But whether fear of Chinese influence is enough to compel European governments to funnel cash to their Arctic frontiers remains to be seen, partly because they have other tools at their disposal.

“China has been slightly overambitious. They’re trying to have stakes everywhere. It’s not very logical" — Philippe Le Corre, analyst

Both Norway and the European Union have introduced foreign investment screening regimes. Oslo passed legislation last year empowering the government to block foreign investment on national security grounds, and in April the EU launched a non-binding mechanism for foreign investment screening across the Union. The system aims for the gradual convergence of domestic screening regimes, and empowers the European Commission to make decisions on deals that affect multiple member states or the EU’s broader interests.

Additionally, China’s credibility as a prospective investor is diminishing. The Belt and Road initiative, for all its initial fanfare, is starting to look less like a highly-coordinated strategic enterprise and more like a haphazard, loose attempt at global influence.

“China has been slightly overambitious,” said Le Corre. “They’re trying to have stakes everywhere. It’s not very logical.”

“There’s a debate internally in China — why are we giving all this money to foreigners?” he said.

* * *

In summer, absent the throngs of wrapped up, snow-seeking tourists, Kirkenes is a quiet place. Once a day, the Hurtigruten cruise ship deposits several dozen visitors on the peninsula. But the bustle is short-lived, and once the tourists have done their rounds, the streets lie silent in the shadows of the town’s dreary post-war architecture.

Heading toward the water’s edge, it’s hard to imagine rows of container ships docked in the port. But Kirkenes, like other industrial outposts, has always been susceptible to forces beyond its control. The question will be whether this time, it can wrangle two big ones — climate change and Chinese ambition — to work in its favor.

Rafaelsen, who was reelected as mayor in September, is hopeful. “This has been my life. I like the sound of a train during wintertime when it’s minus 30 degrees,” he says, staring out to sea.

In Kirkenes, winter is coming. But the sound of a train? That’s still an open question.

CORRECTION: This article has been amended to clarify Norway's status as NATO’s northern land border with Russia.