China's Expansion into the Arctic

Why in news?

In a recently released white paper, China announced that it would develop a Polar Silk Road (PSR).

What is the development in the Arctic region?

• Climate Change - The unintended consequences of climate change are contributing to the transition of the arctic region.
• Rising temperatures are melting some of the thick sheets of ice of the Arctic Ocean.
• This is exposing and making usable, some of the hitherto blocked up potential.
• Navigation - That, in turn, is opening channels through which ice-breaking ships can pass.
• Once it becomes navigable, commercial ships will be able to move through the Arctic, opening shorter shipping routes.
• The ‘northeast passage’ of the region will open up towards Europe.
• The ‘northwest passage’ will head towards the U.S. and Canada.  
• Resources - It is estimated that beneath the layers of ice, highly prized reservoirs of minerals exist.
• The Arctic is said to possess 30% of the world’s undiscovered natural gas and 13% of its undiscovered oil reserves.

What is China looking for?

• Exploration - China’s 360-degree hunt for resources and new trade routes is taking new turns.
• The new development in the Arctic is reinforcing China's interests in the region.
• China’s obsession with becoming a leading, and advanced, industrial heavyweight is increasingly driving Beijing towards the Arctic.
• It has become unrelenting and undeterred by obstacles posed by geography, politics or technology.
• Projects - The Polar Silk Road (PSR) and Belt and Road Initiative (BRI) initiatives aim at industrialising Eurasia.
• This is aimed through massive infrastructural development and network of trans-continental connectivity.

• China is also focusing on cyber-connectivity.
• This is displayed by its embrace of the digital economy, demonstrated by the rise of the global e-commerce giant Alibaba, or Wechat.
• Talks are on in Chinese government to build a 10,500 km fibre-optic undersea link across the Arctic Circle.
• The enterprise, called the Northeast Passage Cable Project, will provide China a new high-speed digital traffic link.
• The proposal also involves Finland, Japan, Russia and Norway as partners in this undertaking.  
• China will get increasingly connected with European financial and data hubs.
• Long term Planning - Beijing’s forays in the Arctic are a result of its long-term planning for deeper engagement with the Arctic.
• China has invested in Iceland following the 2008 financial crisis.
• Eight years later, Chinese company Shenghe Resources purchased 12.5% of Greenland Minerals and Energy.
• China has also signalled its interest in two Iceland ports, as well as Norway’s Arctic Kirkenes port.

What is Russia’s role in this regard?

• Among its littoral countries, Russia claims the largest slice of the Arctic Ocean.
• Coupled with its massive mineral reserves in Siberia, Russia is fast becoming China’s chief natural-resource ally.  
• Russia is thus seen as a key to China’s success in the Arctic.
• The state-owned China Development Bank is set to invest in the Russian energy company Novatek.
• Novatek is heading the Arctic LNG II project.
• The deal would provide China access to the Arctic’s liquefied natural gas.
• Significantly, the agreement would open up areas within Russia’s Exclusive Economic Zone in the Arctic where the Chinese can carry out explorations.

Source: The Hindu