As the Belt and Road Initiative (BRI) completes its first five years, not much is known about its forays into previously inaccessible parts of the Arctic region. Surprisingly, having made some headway there and actually made some sea- routes operational, China’s exploration and development of the Arctic may also be another indicator of progress. Much less publicized than other aspects of the BRI, it is a good time for an update about the Arctic territory and its difficult shipping routes, which used to remain under ice for the better part of the year. Known as the Polar Silk Road, this part is usually perceived as an “extension” of the BRI, and development plans for this route were first referred to in the BRI papers as the “Vision for Maritime Co-operation.”
Catching people’s attention, this unusual project came at a time when the world started experiencing climate change, and global warming melted the ice in the polar regions. It has been these modified temperatures that made the arctic zone more approachable. Nowadays, it is possible to sail through the northern seas in the summer using three traditional trade routes. Firstly, the Arctic region has the Northwest Passage running along the Canadian and Alaskan coastlines. Secondly, the Northern Sea Route runs down the Russian coastline and lastly, the Central Arctic Route runs from Iceland to the Bering Strait, which is still thickly covered with ice caps.
Providing a safe and secure alternate route, these icy sea lanes reduce the time required for shipping between Europe and China by 20 days
Investing in these Arctic routes comes down to saving money and time while transporting goods, so it may turn out to be a viable commercial trade opportunity. Providing a safe and secure alternate route, these icy sea lanes reduce the time required for shipping between Europe and China by 20 days. Travel time is shorter along the Polar Silk Road, which runs along the Russian coastline to link East Asia to Europe. Testing the waters, COSCO shipping has already sailed its vessels through this northeast Arctic passage. In comparison, the traditional route running through the South China Sea to the Indian Ocean and the Suez Canal is longer viable because ships are often attacked by pirates.
In recognition of these new possibilities, the Polar Silk Road was officially included in the BRI and details were shared in the Arctic Policy White Paper, which described it as one of its most important components. Oil and gas development has already been taking place in the Arctic regions, and the Polar Silk Road has greater relevance now as it provides a short supply route as well as improved energy security. However, there are some tough challenges as the arctic zone is harsh and remote, and special equipment, sophisticated technology and highly skilled experts are required to ensure smooth operation. Not only that, ships can sail through these channels only in the summer months, although some transpolar shipping with specialized tankers sometimes takes place in the winter.
Ultimately, as much as 5-15% of China’s trade in value could be plied along Arctic routes by 2020. Basically, due to weather constraints, these routes are more feasible for transporting oil, gas and dry cargo, which have more flexible delivery schedules. Up till now, not more than 2% of global shipping uses these routes and it is projected to rise to 5% by 2030. Nevertheless, Russian cargo traffic has already increased considerably in the past year and Moscow predicts a 10-fold increase by 2030. Having a major stake in the Yamal liquefied natural gas project in Russia, which would supply nearly four million tonnes of LNG per annum, development of these regions makes sense for China as well, and its interests converge with Russia’s.
Once the Arctic route is fully operational, the Yamal project can double Russia’s share of the global LNG market. The Arctic thawing has also given Russia greater access to minerals and other valuable resources in this region. Planning to invest in navigational aids and ports, Russian President Vladimir Putin announced his intention to make it a “truly global and competitive transport route.” Meanwhile, the Polar Silk Road’s Northwest Passage, located on Canada’s northernmost fringes, requires more time before it becomes a regular trade route.
Up until now, this part of the Arctic has been used mostly for “destination shipping,” which mainly involves picking up and dropping off cargo. Supporting China’s role, Global Affairs Canada spokesperson Adam Austen said, “We welcome China’s objective to work constructively and make positive contributions to the Arctic region, and appreciate their stated commitment to international norms and laws.”
By developing these northern shipping lanes, China has tapped the remotest Arctic regions and taken initiative in their development as a pioneer. In the long run, these remote regions can benefit from investment and better facilities as exports used to be adversely affected by logistical issues, shipping delays and closures, particularly in places like Churchill, Manitoba.
Once the region is more accessible, construction of infrastructure and the development of commercial opportunities could take place along the Arctic routes.