China will seek to exploit ice-free Arctic, study says

Mar 1, 2010, 11:42 GMT

Stockholm - China is eyeing up the potential for new shipping routes and the opening of areas for oil and gas exploration as the Arctic polar ice cap melts, a Swedish-based research institute said Monday.

If the Arctic Ocean becomes ice-free during the summer it could result in 'shortened trade routes to European and North American markets,' Beijing-based researcher Linda Jakobson of the Stockholm International Peace Research Institute (SIPRI) said.

Jakobson's study, China prepares for an ice-free Arctic, drew on interviews with Chinese researchers and officials as well as other reports.

Moving goods over the polar cap along the north coast of Russia would, for instance, shorten the shipping route from Shanghai to the German port of Hamburg by 6,400 kilometres, the study said.

Insurance costs were likely to be less than those for transports via the Suez Canal where fees have surged in recent years due to increased piracy off Somalia.

It was probable that economic powerhouse China would also be interested in the potential to exploit oil, gas and other minerals believed to be in the Arctic region.

But the country lacked the technology to extract deep-sea oil, the study observed, while 'Russia, which controls many of the resources in Arctic waters, lacks both the technology and the capital needed to extract them.'

This could pave the way for joint ventures 'using Chinese capital and Western or Brazilian technology,' the study suggested.

The report also pointed to the potential of more cooperation between China, Japan, North Korea and South Korea since they all could 'benefit enormously from shorter commercial shipping routes and possible access to new fishing grounds and other natural resources.'

The Swedish parliament created SIPRI as an independent foundation in 1966.