"China and India are already cooperating in Antarctica," Huigen Yang, director-general of the Polar Research Institute of China told Business Standard on the sidelines of the Arctic Summit, organised by The Economist in Oslo yesterday. "India has established its first research station at Svalbard in the Arctic. In Antarctica, it's close to the Chinese station. We look to regional cooperation with the Asian Forum of Polar Science, which is a network."
"We want to take advantage of climate change," Huigen told the summit. China is now spending more on Arctic sea route research than the US, as does South Korea. Last year, it organised its fifth Arctic expedition. The main advantage is the saving of distances on trade routes.
Sturla Henriksen, director- general of the Norwegian Shipowners Association, told the summit the distance between Hamburg and Shanghai could be cut by 6,400 km. He listed offshore oil and gas, and cutting the distance between European and Asian ports by 40 per cent as the main advantages of the opening of the routes.
China is holding talks with North Korea about its access to the Japan sea, Yang said.
At present, the Arctic sea routes are only available for four months. Climate change has lead to the widespread meltdown of sea ice, making these journeys more feasible. China is organising its first commercial voyage through the Arctic this summer.
China predicts that by 2030, as many as half the containers between East Asia and Northern Europe will be shipped through the Arctic. It estimates that China will double its gross domestic product by 2020, to reach $7.6 trillion. If 10 per cent of this will consist of trade through the Arctic sea route, it will amount to $683 billion.
"This explosive growth will present huge challenges," Huigen said. He called for "more open policies by coastal states for free passage and collaboration on infrastructure and capacity buildings for efficient shipping services."
Last year, the Arctic sea route accommodated three million tonnes (mt) of goods. This year, it is expected to go up to five mt.
Questions were raised at the summit about the use of nuclear ice-breaker ships, which would remain idle for possibly eight months in the year, and thus prove uneconomical.
Environmentalists also questioned the sustainability of such maritime trade. Last year, energy giant Royal Dutch Shell committed a serious blunder with its Kulluk oil rig, which floundered near Alaska's Kodiak island.
It has spent $5 billion in the Arctic without anything to show for it.
Local refiners owe about $6.5 billion to Iran, equivalent to 55% of their oil bill