sources rather than Arctic shipping, even recently.[①] The government and Chinese shipping firms thus seem more interested in access to Arctic natural resources, an access the Arctic shipping routes may provide, rather than transit shipping. From this point of view, Chinese shipping and chartering firms reason on a very similar way as other globalized shipping firms from Europe, North America or Asia, as attested to by Lasserre and Pelletier.[②] This survey, focusinSince about 1995, climate change has begun to mark the Arctic region. The first and strongest signs of global-scale climate change exist in the high latitudes of the planet. The observed warming in the Arctic in the last decades of the 20th century appears to be without precedent since the early Holocene. Also, changes in northern climate are expected to continue throughout the 21st century and persist for many centuries to come, bringing with them major physical, ecological, sociological and economic transformations. The Arctic transformations have aroused increasing international interest. There has been much written in recent years about existing and potential disputes in the Arctic. This interest has predominantly been reflected in extensive media coverage bringing attention to the area’s abundant resources, border-related disputes, and the possible opening of new maritime routes.[③] Located north of the polar circle, the Arctic comprises eight littoral countries and is centered on the Arctic Ocean that is witnessing dramatic climate changes. Among Arctic countries, five are bordering the Arctic Ocean – Canada, Russia, the United States, Norway, and Denmark (via Greenland).[④] The commercial and strategic implication of climate change and the melting of the sea ice in the Arctic have drawn attention not only to Arctic states, but also to some other countries that have no territorial access to the region, such as China, South Korea and Japan. Reasoning on the new climatological conditions that accelerate the summer melting of the sea ice and of multiyear ice, several observers pinpointed promising geostrategic opportunities for countries bordering the region[⑤], anticipating that the creation of a new trade route from north to east could lead to significant commercial profits and increase access to natural resources for economic growth purposes, because such a route would be much shorter between the Atlantic and the Pacific, and would facilitate trade flows compared to existing alternatives via the Suez or Panama Canals.[⑥]

Yet, interest in the region does not stop at circumpolar states. Other countries see a number of geostrategic opportunities and stakes involved in accessing the Arctic. China, which lacks a legal basis to articulate claims over sea zones in the region, has nonetheless been increasingly present on the diplomatic and economic scenes.[⑦] In recent years, Beijing has succeeded in setting up a vast scientific Arctic research program in the fields of climatology, geology, and biology, among others. Moreover, Beijing has mobilised considerable efforts towards the building of political and economic ties with smaller Arctic countries such as Norway and Iceland, and has brought Arctic-related questions into its diplomatic agenda with Russia and Canada.[⑧]

These efforts on the part of China since 2009 have engendered negative reactions on the part of the Western media, which portray China as ambitious, greedy, and ready to conquer and threaten the territorial sovereignty of countries in the Arctic region. Examples commonly cited of such attempts include the sudden appearance of China’s research icebreaker Xuelong in Tuktoyaktuk (Northwest Territories, Canada) in 1999, and the attempts by a Chinese businessman to purchase vast tracts of land in Iceland in 2011. Claims that the icebreaker’s presence was unexpected served as a pretext to accuse China of suspicious motivations in the area.[⑨] Yet in reality the Chinese government had submitted to the Canadian Embassy in Beijing a formal request to enter the area.[⑩] Chinese rear admiral Yin Zhuo’s assertion that Arctic resources are a world heritage[11] are commonly cited by Western analysts as evidence of long-term goals of Chinese government, whose ambitions in the Arctic would threaten the interests of riparian countries bordering the ocean.[12]

Discussions over potential natural resource reserves in the area and the opening of new trade routes have led to speculation over the intentions of regional and world powers, increasingly concerned about their economies’ dependence on energy security. China is often described as being very interested in both Arctic mineral resources and the opening of Arctic shipping routes, but in this characterization there is a hint of a perceived threat, as commentators are often stressing that China’s appetite may lead Beijing into considering the Northwest Passage an international strait and resources as open up for grabs.[13]

I. Chinese Academics Underline the Potential for Arctic Shipping
Chinese scientific research has long been very active in the Arctic. The China Arctic and Antarctic Administration (CAA) was founded in 1981 as the Office of the National Antarctic Expedition Committee. The Chinese official research program in the Arctic formally began in 1989 when the Polar Research Institute of China was founded and the CAA adopted its present name. Most articles that were published in a dozen Chinese journals between 1988 and 2008 focused on the Arctic glaciology, climatology, oceanographic science, upper atmospheric physics, as well as on the Arctic biological and environmental studies, confirming the above-mentioned statement by Chinese officials that China’s interest in the region was at first largely motivated by scientific concerns. A quick survey of the China’s largest database search engine in August 2012, Wanfang Data (万方数据库)[14], retrieved 680 articles that included the word “Arctic” (北极) in their title and that were published before 2008. Most of these articles (49% of the total number) are related to all kinds of climatologic issues, others treat biodiversity (23%), environment (10%), technology (10%), linguistics and history of Arctic’s indigenous peoples (8%). No major Chinese scientific paper ever considered political issues in the Arctic before 2007. However, between 2007 and 2012 appeared several publications related to Arctic politics, legal issues and strategic interests, including shipping.[15]

Among the recent articles, thus, has emerged the idea, often repeated among Western and Chinese analyses, that the shorter Arctic sea routes are strategic and will witness the development of a strong traffic. Let us quote work by scholars like Guo[16], Guo and Guan[17], Li[18], Li and Tian[19], Liu and Lin[20], that flourish the year following China’s application as an observer at the Arctic Council; but also Ge and Jiang[21], Shi[22], Li and Sun[23], Xu et al[24] or Xiao[25]. This list is certainly not complete, as many articles now appear on the topic of Arctic resources or Arctic shipping. A striking feature, however, of these articles is that while discussing China’s interests in potential Arctic routes and policy implications of the development of Arctic seaways for China, no critical analysis of the feasibility or economic profitability of such routes is considered: it is as if most researchers assumed Arctic routes, because they are shorter, are necessarily much more interesting for shipping.

A different view began to emerge in 2013, with articles from Zhang et al[26], Wang and Shou[27] or Xu[28], echoing the research project launched by Zhang and the Polar Research Institute of China in 2012 on the development of Arctic shipping[29]: these papers underline the need to assess the feasibility of Arctic shipping and to undertake empiric research to develop Arctic transport.

However, in the Chinese literature, most articles still focus on the potential of the route, underlining its being much shorter than classical routes is in itself a decisive advantage. With the exception of Xu et al[30] or Wang and Shou[31], no article or project up to 2013 deals with the idea that Arctic shipping remains difficult, costly and not necessarily profitable, depending on the cost structure and the market, an idea now largely present in the scientific debate among Western scholars. Chinese publications barely deal with an analysis of costs or difficulties linked with Arctic shipping, whereas this analytical approach is already common in the scientific literature.[32]

II. From Research to Action: Agreements and Developments
To what extent is this scholar interested in Arctic shipping shared by the Chinese government and business circles?

2.1. Government actions and thinking

In 1992 China started its first five-year scientific research program in the Arctic Ocean in cooperation with German universities in Kiel and Bremen. In ten years from a country that had no Arctic research whatsoever, China became a country that has established, in 2004, its own research station, Yellow River, in the Arctic (in Ny-Alesund, on the island of Spitsbergen, Norway) and has conducted four independent Arctic missions (1999, 2003, 2008 and 2010). For these purposes, in 1993, Beijing purchased a Russian-made icebreaker from Ukraine, the Xuelong [雪龙] - Snow Dragon. The 167-meter-long vessel has an icebreaking capacity of 1.2 meter and is equipped with advanced systems of self-contained navigation and weather observation. There are a data processing center and seven laboratories as well as three operating boats and a helicopter. In 2010, the Xuelong helped a Chinese research team build a floating ice station in order to conduct a 15-days research mission in the Arctic Ocean[33], in the frame of its long-term research interest in the sea ice evolution, in particular in the Beaufort and Chukchi Seas, north of the Bering Strait. But China also boasts three permanent research stations in Antarctica, and from 1985 to 2013, the Chinese Arctic and Antarctic Administration organized 5 Arctic and 30 Antarctic science missions: in China, it is the Antarctic, not the Arctic that gets the lion’s share in polar research budgets. Indeed, the Antarctic is more accessible to China than the Arctic, because, under the terms of the Antarctic Treaty (1959), China does not need any country’s permission or specific authorisation to build up stations, launch expeditions and do polar research there.[34] So, in a way, the Antarctic was and still is a test-platform for the Chinese research activities in the Arctic because of similar environmental conditions. However, it would be delusive to think China, as of 1981, thought of the Antarctic with a view to developing Arctic research: nothing in the literature attest to this idea.

Despite this strong polar science involvement, until now China has not yet published any official Arctic strategy. On the contrary, the Chinese government has always stipulated that it has no official strategy or any particular agenda in the Arctic region.[35] The Chinese government has long refrained from specifying what goals China was pursuing in the Arctic, an attitude that helped fuel fear from Western and Russian analysts.[36] Beijing adopted a very cautious approach and vigorously denied having any aggressive ambition and strategic intention toward Arctic shipping or natural resources opportunities. For instance, Qu Tanzhou, Director of the Chinese Arctic and Antarctic Administration, said that “China did not prospect for oil and gas resources in the Arctic area nor has the capability or capacity to mine oil and gas there”.[37]

The Chinese government explains its growing interest and presence in the Arctic mainly by the necessity of doing research on the climate changes in the region.[38] The air stream of the Arctic seems to be a major cause of the occurrence of extreme weathers in China. Therefore, this region in fact concerns China’s economic, social development and security directly.[39]

China’s vice-minister of Foreign Affairs, Hu Zhengyue, underlined that “China [did] not have an Arctic strategy” during a conference held in Svalbard in November 2009.[40] The Chinese government also let uncertainty grow about its objectives regarding Arctic natural resources: “Since there is no proven data on oil and gas deposits in the Arctic, China is only interested in climate change in this region. Before formulating a policy on this topic, we first need to gather information on mineral and hydrocarbon potential” declared Xu Shijie, Director of the Chinese Arctic and Antarctic Administration Policy division.[41] It is only in May 2013, after China’s admission as a permanent observer in the Arctic Council, that any uncertainty has been dispelled, when Hong Lei, spokesperson for the Ministry of Foreign Affairs, asserted that “China recognizes Arctic countries' sovereignty, sovereign rights and jurisdiction in the Arctic region”.[42]

However, long before this Chinese diplomatic success, several gestures and actions had underlined that, if an official Chinese Arctic policy had not been published, China was indeed interested in the Arctic, and not merely for scientific reasons – the Arctic program displaying a significant growth during the past ten years.[43]

China was reportedly interested in the Icelandic government’s project to develop a transarctic shipping route[44] as Chinese delegates participated in the founding seminar organized by the Icelandic government. This early interest, not necessarily the result of a specific policy, helped nurture suspicion about the land purchase project above mentioned, but also fueled speculation regarding the involvement of the Chinese government in shipping projects.[45] The Polar Research Institute, as mentioned above, initiated a research that involves Cosco, the largest Chinese shipping company.[46] In 2013, the Ministry of Commerce, echoing the August transit between China and Rotterdam along the NSR of the Yongsheng, a Cosco-owned multipurpose ship, and taking note of some challenges posed by Arctic shipping, published a short analysis calling for more research on Arctic shipping research.[47]

2.2. Chinese shipping companies and Arctic routes: what reasoning?

An increase in maritime activity will no doubt be one of the most important consequences of climate change in the Arctic region thanks to the unprecedented melting of sea ice. The development of commercial shipping through newly-accessible routes will, however, raise a number of difficult issues: establishing an effective response capability in the event of accidents; monitoring the exploitation of natural resources; and curbing illegal trafficking in all of its forms. An increase in maritime traffic will also bring to the fore disagreements about the legal status of the new sea lanes and the right to exercise authority over them. While all of these questions warrant careful analysis and consideration, this contribution will focus on the present situation of commercial shipping through Arctic waters, specifically the Northwest Passage (NWP) and the Northern Sea Route (NSR) through the Northeast Passage, and the potential for an increase in such activity.

For several years, media stories have prophesied an Arctic maritime traffic boom. With no concrete economic analysis in support, such predictions have been little more than speculation.[48] Some commentators have expressed the view that the Northwest Passage, toll free, will witness an expansion in traffic greater than the NSR.[49] However, it now appears that the NSR is developing faster. Taking advantage of accelerating ice decline along the Siberian coast, the first attempt at transporting hydrocarbons from Russia to China using the NSR was undertaken in August 2010. The Baltica, escorted by a Russian icebreaker, took 27 days to deliver natural gas condensate from Murmansk to Ningbo (Zhejiang, China). This first trial was followed by a commercial agreement on long-term cooperation on Arctic shipping along the NSR between the Russian sea shipping company Sovcomflot and the China National Petroleum Corporation (CNPC), in November 2010. This agreement, declared to be part of the Russia-China energy cooperation strategy, was signed in the presence of Russian Vice-prime minister Igor Setchin, President of the Board of the oil company Rosneft, the second largest oil producer in Russia, and of Wang Qishan, Vice Premier of the People's Republic of China.[50]

In 2011 and 2012, several bulk ships transported iron ore loaded in Murmansk or in Kirkenes (Norway) to Chinese ports along the NSR, and several tankers and LNG carriers also delivered oil or gas between Vitino and China.[51]

Thus, efforts from Russian authorities to develop traffic along the NSR appear to begin to bear fruits. There were 4 transits in 2010, but then 34 in 2011, 46 in 2012, and about 71 in 2013, according to estimates from January 2014. These figures are far from those of the Suez or Panama Canals, but they point to a definite growth, fueled by the export of natural resources from the Arctic to Asian markets (China, Japan, South Korea). The major driver of the current rapid development of NSR traffic is the export of resources from the Norwegian and Russian Arctic regions and not transit shipping. The NSR appears to be a market niche that provides an opportunity for a market share increase in the bulk and tanker business, but only for innovators and risk-takers such as shipping firms partnering with big energy companies with close connections to the Russian State.[52]

However, Chinese shipping companies do not appear to rush to this new Arctic market: the traffic is in the hands of Russian or European shipping firms, a fact that seems to confirm a first assessment of the interest of Asian shipping companies, from China in particular.[53]

During a series of direct interviews conducted from September until December 2013 with 25 Chinese shipping and forwarding companies, it appeared few expressed a real interest in Arctic shipping (see Table 1).[54] Only two, including Cosco, answered they considered developing Arctic shipping. Cosco, a major shipping group, reckoned the profitability of Arctic routes was questionable, and the other firm displaying an interest rather in destinational traffic (transporting Arctic natural resources from Siberia to China).

Several firms said they thought there was a real potential for Arctic shipping since the Arctic routes were indeed shorter, both for bulk transportation of natural resources as well as for liner shipping. However, analyses remain sketchy as no firm declared to have done an extensive cost/benefit or SWOT analysis. Among the elements of explanation answering companies gave to justify their lack of interest or involvement, figured prominently the following factors:
——High investment cost required for the purchase of ice-strengthened ships
——Market constraints like just-in-time and ship size that limit economies of scale
——Arctic market too small for profitable routes that enable quick return on investment on ice-strengthened ships
——Physical risks and insurance costs

The Chinese government multiplied declarations regarding Arctic reg on shipping firms, showed that transit did not appear attractive to the vast majority of companies because of associated costs, risks, uncertainties regarding on-time delivery. Destinational traffic lured a larger share of shipping companies operating in the bulk and tanker segment, as well as companies in the general cargo segment for the servicing of local communities in Canada, Alaska and Greenland.

However, the Chinese media recently gave news of a September 2012 agreement between Cosco and Russian authorities so as to study the potential profitability of commercial transit routes along the NSR.[55] The first ship Cosco sent along for trials, the Yong Sheng, left Dalian on August 8, 2013 to reach Rotterdam, and was not a container carrier by a heavy lift multipurpose carrier. Was this the sign of an increasing number of commercial transits by Chinese shipping firms, or a government-sponsored experiment, Cosco being a State-owned corporation?

III. Conclusion
It remains to be seen to what extent Cosco’s experiment is going to be assessed as fruitful and to what extent other Chinese shipping companies will develop the view that Arctic shipping can bring them interesting market opportunities. For now, it seems this potential is barely considered as most surveyed transport firms appear not to be interested in Arctic shipping. Arctic shipping is viewed as potential, because of shorter distances and fuel savings; but when it comes to developing actual service, most Chinese shipping firms presently balk at the risks and required investment. It thus seems that either there is a wide discrepancy in analysis between shipping firms (business circles) and government circles regarding the interest of Arctic shipping; or that Arctic shipping is not at the core of the interest the Chinese government nurtures towards the Arctic: natural resources and voicing its views in diplomatic institutions like the Arctic Council would then appear to be Beijing’s priorities.

Source of documents：Global Review