No region so rich in resources, both real and man-made, can avoid attracting the attention of China for long. Indeed, right on cue, Beijing has begun a concerted effort to make inroads in the Arctic—especially in Iceland and its semiautonomous neighbor, Greenland—with far- reaching geopolitical implications. In May, the Arctic Council granted observer status to China, along with India, Italy, Japan, Singapore, and South Korea.

China sees Iceland as a strategic gateway to the region, which is why Premier Wen Jiabao made an official visit there last year (before heading to Copenhagen to discuss Greenland). China’s state-owned shipping company is eyeing a long-term lease in Reykjavik, and the Chinese billionaire Huang Nubo has been trying for years to develop a 100-square-mile plot of land on the north of the island. In April, Iceland signed a free-trade deal with China, making it the first European country to do so. Whereas the United States closed its Cold War–era military base in Iceland in 2006, China is expanding its presence there, con- structing the largest embassy by far in the country, sending in a constant stream of businesspeople, and dispatching its official icebreaker, the Xue Long, or “Snow Dragon,” to dock in Reykjavik last August.