A White Paper just released has declared it official Chinese policy to develop a ‘Polar Silk Road’, and seeks international cooperation to open up Arctic sea lanes. Furthermore, in a clear statement of national overarching transportation strategy, China is ready to join with interested parties to “advance Arctic-related cooperation under the Belt and Road Initiative.”

A leading industry academic believes any development of Arctic shipping does not bode well for the long-term economic interests of two main competitor shipping lanes – the Suez Canal and the recently upgraded Panama Canal.

The White Paper, entitled ‘China’s Arctic Policy, The State Council Information Office of the People’s Republic of China, January 2018’, outlines the national government’s policy position on a whole range of matters. These issues include protecting the environment, utilising Arctic resources, governance issues, promoting peace and stability, and ‘China’s participation in the development of Arctic shipping routes’.

The paper acknowledges that with the onset of global warming, the waters around the Arctic are likely to grow in importance for commercial considerations and trade lanes. Any development should be conducted under international treaties, especially the freedom of navigation, which is established under United Nations Convention on the Law of the Sea (UNCLOS).

Source: www.imo.org

ARCTIC OCEAN – SHIPPING LANES OF THE FUTURE?

One section of the paper is most revealing. China is keen to build a “Polar Silk Road” and actively encourages investment in infrastructure to “pave the way for their commercial and regularised operation”. Furthermore, China desires “international cooperation” on the development of Arctic routes. The paper calls on the international community “to seize the historic opportunity” in Arctic commercial development.

According to Dr Yip, Associate Professor, Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University, the development of the ‘Polar Silk Road’ is a realistic policy aspiration.

He commented, “The aspiration of a ‘Polar Silk Road’ is realistic – under the assumption that the temperature is increasing, and the polar waterway becomes more navigable. Following the trend of global warming, the polar routes should be viable within a 50-year timescale.”

However, Yip cautioned that much still needs to be done. At present, the ‘Polar Silk Road’ is not safe, and that navigation along the polar silk road needs substantial and expensive technical supporting infrastructure, he warned. He highlighted a range of challenges: the weather is uncertain; that ships need to be ice class with few ice-breakers available; and the critical shortage of pilots.

He added, “But the benefits of developing this route are obvious from a logistics and transportation perspective, as it is always better if more shipping lanes are available. Indeed, I foresee a situation where canal incomes from the Panama and Suez Canal toll charges would be adversely affected were this project to succeed.”

The present financial equation is stacked against Arctic sea lanes. According to Yip, the cost of navigating via the polar routes is at least double of that via existing routes. By way of example, he cited the enormous outlay on insurance to plough these harsh sea lanes.

Yip added, “If the polar silk road becomes more navigable, some ports will undoubtedly be developed in polar waters. Russian and Canadian ports will be competing for business.”

Talk of developing the Arctic sea lanes has been ongoing for some time in shipping, governmental and academic circles. The International Maritime Organization (IMO) stated that the adoption of the International Code for Ships Operating in Polar Waters (Polar Code) came in response to increased shipping traffic in the Polar regions and the anticipated further increase due to global warming and more routes opening up. The code deals mainly with safety matters and protecting the environment. Two videos explain the code:

A spokesperson from IMO commented, “If there are specific implications of any developments in Arctic sea lanes, then the relevant Member States would need to put forward a proposal to IMO. This could perhaps involve the need for ship traffic separation schemes to be established or areas to be avoided to protect ecologically sensitive areas.”

During a presentation to launch the Polar Code, Brendan Kelly, Chief Scientist, Monterey Bay Aquarium, former Assistant Director for Polar Sciences, The White House, stated that natural resource development was driving interest in Arctic shipping.

According to Irvin Studin, editor-in-chief of Global Brief Magazine and President of the Institute for 21st Century Questions, one of the key issues related to China’s Arctic document is the legal ownership of the Northwest Passage and Northern Sea Route respectively, as reported in the South China Morning Post.  China considers both waterways international straits, which is at odds with territorial claims of both Canada and Russia.  Indeed, Studin believes Canada should reassess its geopolitical strategic interests in the light of this Arctic policy document, and that greater engagement with China is inevitable in the longer term.