globalEDGE Blog: Melting Arctic Sparks Interest in China

Melting Arctic Sparks Interest in China

The changing global climate has become increasingly more difficult to ignore due to climbing air and water temperatures, rising sea levels, and melting of polar snow and ice. Recent reports have stated that the area of ice in the arctic has never been smaller, which has recently caught the attention of Asian economists. The opening of the Arctic north promises new trade routes, untapped reserves of oil, and an abundance of minerals to discover.

The thawing of the north has come at a beneficial time for struggling economies such as the United States and many parts of the European Union. Asia’s access to the Northern Sea Route will provide much faster trade routes, for example, cutting as many as 4,000 miles off of the trek from Shanghai to Hamburg. The voyage will become even shorter as ice continues to melt and China continues to develop non-nuclear ice-breaking vessels. The drilling of untouched oil reserves is attractive to China, considering it is the second-largest importer of crude oil, following the United States.

Yet Asia’s involvement with the north has encountered several barriers. There is already an established intergovernmental forum, the Arctic Council, which promotes environmental protection in the Arctic. They also promote cooperation among the Arctic states and are active in the indigenous communities. This council is composed of 8 Arctic states, which obviously does not include any Asian regions, so China is lobbying to become a member, but that will not be finalized until May of 2013. China needs to remain in good graces with the Arctic states considering it has no experience in drilling and mining in those types of conditions. Not to mention, the passage of the Northern Sea Route remains dangerous and uncertain. Consequently, Asia’s itch for resources in the Arctic must be delayed until China’s rights to the land are secured. Needless to say, China may benefit more greatly by focusing their attention on alternative fuels and limiting their sulfur dioxide and greenhouse gas emissions instead of investing in more coal and oil from the Arctic.

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