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March 1, 2010 5:43 pm

China looks to Arctic shipping route

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A ship in a sea of ice

Breaking the ice: China is warming to the idea of the Arctic being navigable during the summer months and is allocating more funds to polar research

China has started paying attention to the strategic implications of the melting of Arctic ice and could seek a more active role in regulating use of the region, a new report said on Monday.

The findings of the Stockholm International Peace Research Institute’s paper indicate that the Arctic could emerge as another area in which China starts defining global strategic interests, following its increasing investments in Africa and its moves to build a presence in the Indian Ocean.

Sipri said the prospect of the Arctic being navigable during summer months had driven Beijing to allocate more funds for polar research, and scholars were increasingly pushing the government to develop an Arctic strategy.

“Because China’s economy is reliant on foreign trade, there are substantial commercial implications if shipping routes are shortened during the summer months each year,” the report said. It added that taking the northern route through an ice-free Arctic could shorten the trip from Shanghai to Hamburg by 6,400km compared with the Strait of Malacca and the Suez Canal. In addition, the high insurance costs stemming from the risk of piracy could be avoided.

The report said another potential strategic interest of China could be in the extraction of natural resources of the Arctic.

Linda Jakobson, author of the report, said that although China had one of the strongest polar research programmes in the world, Beijing had yet to research the economic and security implications of an ice-free Arctic as it was “wary that active overtures would cause alarm in other countries due to China’s size and status as a rising global power”.

The report comes as Russia prepares to sail a large oil tanker the entire length of its Arctic sea coast for the first time, opening a strategic energy trading bridge between European Russia and the far east.

Sovcomflot, Russia’s state shipping company, will sail an oil tanker accompanied by nuclear-powered ice breakers from Vitino on the White Sea to Japan this July, in a pilot voyage marking the start of oil exports along the northern route.

Sergei Frank, the chief executive of Sovcomflot, said the Arctic route would be a “floating pipeline,” gradually helping Russia re-orientate its oil and gas exports away from Europe towards more dynamic eastern markets, including China.

Mr Frank ruled out the possibility of Chinese container vessels using the northern route, citing unpredictable Arctic navigation conditions and high insurance rates. “It’s nonsense,” he said.

Ms Jakobson told the Financial Times: “China is particularly wary of Russia and whether it might demand high passage fees, which could erase some or most of the potential efficiency gains.”

Sovcomflot, already the world’s biggest owner of ice-class vessels, expects to corner the market in Arctic energy shipping as huge new oil and gas reserves are developed in polar regions..

Mr Frank said Russia’s northern route would not be closed to foreign shipping companies, but users would need to comply with Russian environmental and navigation rules.

Ms Jakobson added that the strategic situation in the Arctic was “much more complicated” than the Antarctic. “Although I don’t subscribe to scenarios of conflict, I do believe disputes are likely,” she said.

Despite Beijing’s low-key official attitude, Ms Jakobson believes that the government has a clear agenda in the Arctic, including the adjustment of international laws including the United Nations Convention on the Law of the Sea to the new circumstances and the hope for permanent observership in the Arctic Council, a regional governmental organisation.

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