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'Polar Silk Road' creates new opportunities for Far East cooperation

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China's vision of building a "Polar Silk Road" through developing the Arctic shipping routes will enhance regional connectivity and create new opportunities for common development.

China SCIOUpdated: September 13, 2018

Chinese and Russian leaders have on multiple occasions expressed willingness to build a "Polar Silk Road" through developing the Arctic shipping routes to enhance regional connectivity and create new development opportunities.

The fourth Eastern Economic Forum, which is running from Tuesday to Thursday in Vladivostok of Russia's Far East, again brought the plan to the spotlight.

The three-day forum, under the theme of "The Far East: Expanding the Range of Possibilities," held extensive discussions on future economic cooperation between the Russian Far East and its surrounding regions as well as on the importance of developing the Far East transport corridor in the Asia-Pacific region.

Speeding up development in the Far East

Russia's Far East is rich in oil, gas and mineral resources. As it is vast and sparsely populated, it enjoys great potential in agricultural and aquacultural development. However, due to the cold climate as well as insufficient capital, human resources and infrastructure, the region lags far behind the western part of the country in economic development.

Since he took office, Russian President Vladimir Putin has put the Far East development on the agenda and formulated relevant regional development strategy.

China is the largest trade partner and source of foreign investment for the Russian Far East. The Yamal liquefied natural gas (LNG) project in Russia's Yamal Peninsula in the Arctic opened its first production line in December 2017. As agreed between the two countries, at least 4 million tons of LNG would be shipped to China every year after the completion of more production lines. It was China's first large-scale energy cooperation project with Russia after the launch of the Belt and Road Initiative.

The Yamal Peninsula, partially located in the Arctic Circle, contains the biggest gas reserves on the planet. It is also one of the most difficult areas to exploit the resources due to geographical and climatic reasons. Through the bilateral cooperation project, China and Russia made it possible to exploit the energy resources in the region.

Experts say they believe that the key to developing the Far East is to connect the Far East resources with the needs of the neighboring areas.

The "Polar Silk Road" calls for cooperation in developing the Arctic shipping routes, which could facilitate infrastructure construction along the Arctic Ocean in the Far East and activate the economic potential of the hinterland, thus opening up a new channel of cooperation for countries in the Pacific Ocean and the Atlantic Ocean, according to experts.

Revitalization of China's northeast rustbelt

The "Polar Silk Road" development could also give a boost to the development of China's northeastern region made up of Heilongjiang, Jilin, Liaoning provinces, which historically has been the country's industrial center bordering Russia's Far East.

A study suggests that enhanced connectivity between Northeast China and Russia's Far East can increase China's trade with Japan and the Korean Peninsula to the east, and with Eastern and Northern European countries through the Arctic to the west.

The development of international transport corridors, called "Primorye-1" and "Primorye-2," is expected to link China's northeastern region with Russian ports cities and bring tangible benefits.

Some areas in Northeast China have already reported notable results. Jilin's Hunchun, a border city, has maintained double-digit economic growth for several years straight. It has become a gateway to Northeast Asia by taking advantage of abundant resources in the Russian Far East such as coal, oil, gas and lumber. Currently, the city is speeding up the construction of clean energy industrial parks, international logistics parks, and lumber trading centers.

The Primorye-1 transport corridor has also brought new momentum to Suifenhe in Heilongjiang province and its neighboring areas, connecting it with Vladivostok and Pogranichny in Russia. Directly connected with "Polar Silk Road," the ports in Liaoning province can serve as wharfs where ships can load and upload their goods.

Eurasia connectivity

Connecting the Pacific and the Atlantic, the Northern Sea Route, a strategic shipping passage between Asia and Europe that runs along Russia's Arctic coast, is the shortest passage that links Asia, Europe and North America.

It is estimated that if fully opened, the Arctic route will cut the annual costs of international maritime trade by US$53.3 billion to US$127.4 billion by 2020. Compared to other routes, it has no restrictions on the size of ships, which means it could significantly shorten the time that large container vessels take to travel from Northeast Asia to Europe by sea, thereby increasing efficiency.

The "Polar Silk Road" calls for common development of the Arctic routes that not only boosts synergetic development of China's northeastern region and Russia's Far East but also enhances interconnectivity and trade cooperation in the Eurasia continent.

Some countries have announced their respective policies and strategies concerning the Arctic development.

The Republic of Korea has introduced the "New North Policy" and the "Nine Bridges" cooperation, aiming to deepen its cooperation with Russia in such fields as natural gas, railway, ports, electricity, Arctic routes, shipbuilding, agriculture and aquaculture, hoping to increase imports from the Far East and make an early start in the Arctic development.

North European countries are planning to build an "Arctic Corridor" as Finland and Norway intend to invest at least 3 billion euros (nearly US$3.5 billion) to build a railway that runs from Helsinki, capital of Finland, to Kirkenes, a coastal city in northeastern Norway, where it would meet with the "Polar Silk Road."

Once the shipping routes are open, goods from East Asia can travel across the Arctic along the "Polar Silk Road" before arriving in Northern Europe, from where they would be shipped to countries in Europe via ports of the "Arctic Corridor" and the vast railway network of the continent.