Sergei N. Leonov
Economic Research Institute
Far Eastern Branch of the Russian Academy of Sciences, Khabarovsk
Elena A. Zaostrovskikh
Economic Research Institute
Far Eastern Branch of the Russian Academy of Sciences, Khabarovsk
Abstract: The article considers the prerequisites for the activation of cooperation between China and Russia in the Arctic. The bilateral interest of countries in integrating their efforts in the region is shown: China seeks to gain access to the minerals of the Russian Arctic zone in order to maintain stable high rates of industrial growth, and Russia, in the context of the “sanctions war” with Western countries, focuses on China as the main partner in development of the Arctic. The paper shows that the growth of China’s activity in the Arctic, superimposed on China’s objective to optimize logistics ties with Western Europe, can stimulate the formation of the Northern Transit international transport corridor, passing through the territory of the Russian Far East (FER), which can ensure the growth of Russian-Chinese cargo traffic by 700 thousand tons, attract up to 180 billion rubles of investments in the Far East as part of infrastructure projects, contribute to economic growth and strengthening of the transport frame of the Far East. The risks facing Russia are identified in terms of pursuing a unified coordinated state policy on the territory of its Arctic zone and improving the transport accessibility of the Arctic region.
Keywords: Arctic, China, Russia, Arctic policy
Introduction
The Arctic is considered one of the last frontiers of oil, gas and mineral resources extraction, therefore it attracts close attention. Prospects for the development of energy and mineral resources on the shelf of the Arctic seas, the expansion of shipping and fishing after the expected climate change are being discussed at international platforms [16]. Great interest in these issues is demonstrated not only by the Arctic states, having coasts bordering the Arctic Ocean, their own internal sea waters, continental shelf, and exclusive economic zones (Russia, Canada, USA, Norway and Denmark), but also by the countries of East Asia, especially China, positioning itself a “near-Arctic” country [2]. It is important for China to gain access to the Arctic deposits of hydrocarbons and ore minerals in order to maintain a consistently high rate of industrial growth.
Since 88–95% of the predicted Arctic resources are located in the exclusive economic zones of the five Arctic states [3], China is trying to actively cooperate with the Arctic countries in mineral extraction, focusing on Russia as the main partner.
Russia, which has the largest Arctic shelf in the world and controls the Northern Sea Route (NSR), the shortest transport artery from Asia to Europe, is forced to orient towards China as the main partner in the development of the Arctic, in the context of the sanctions and the upfolding “cold war” with Western countries.
In such conditions, it is necessary to analyze the prerequisites and assess the potential risks for the Russian Federation of intensifying partnerships with the PRC in the Arctic region.
Methods and statistics
To substantiate the results of the study, the authors used the ideas expressed in the scientific works of domestic and foreign scholars in the field of territorial growth and regional development management. The methodological basis of the study was general scientific methods, such as formalization, grouping, analysis, synthesis and comparison. The information base of the research is represented by data of Rosstat and industry scientific reports.
Results
According to experts, the prerequisites for cooperation between Russia and China in the Arctic are based on five main interest groups [5; 6; 7]:
- Geopolitical interests explain the convergence of the positions of the two countries in relation to the Arctic due to increased trade tensions between Moscow, Europe and the United States as part of the “sanctions war”. Against the backdrop of the Ukrainian crisis, Russian-Chinese cooperation in the economic sphere (especially in the oil and gas sector) has gained a new powerful impetus. Given the fact that Russia will chair the Arctic Council from 2021 to 2023, common interests can be realized.
- The prerequisites for the formation of new transport communications for China are conditioned by climate change and the creation of alternative transport routes, which resulted, among other things, from the redistribution of costs and benefits between shipping companies and seaports due to the increase in the size of ships and the formation of mega-alliances. Difficult climatic conditions and a shortage of Arctic ships (China currently has 2 icebreakers) make it possible to navigate in the Arctic only in three summer months, which does not meet the requirements of China’s ambitious plan. Therefore, in order to solve emerging problems, China is interested in Russia’s assistance.
- Economic factors explain the continued demand from China as one of the world’s largest consumers of energy resources in the foreseeable future, while the extraction of energy resources in the Arctic is a fairly competitive industry in Russia. Under the conditions of the “sanctions war” and the “pivot to the East” declared by Russia, China can easily reserve for itself significant sources of Arctic energy in the Russian zone, which is not controlled by Western countries.
Many experts predict further global growth in shale gas production. According to their estimates, its global production may reach 700 billion cubic meters per year in 2030. Expert calculations show that shale gas production, for example, in China will amount to 110-140 billion cubic meters by this time. In coal equivalent, this figure is equal to 190-230 million tons per year of additional energy resource, which will significantly reduce potential coal imports to China. Additional energy resources, which can enter the world economic circulation together with shale gas by 2030, can amount to approximately 650-800 million tons per year in coal equivalent. This is quite a significant volume.
4) Investment factors are related to the Russian need for Chinese investments for the development of the Arctic transport and industrial infrastructure, financing of hydrocarbon production projects on the Arctic shelf and the implementation of support zone development programs in the Arctic zone of the Russian Federation (AZRF).
5) Technological factors in the context of reducing harmful CO2 emissions and switching to alternative fuels, put forward in 2020 by the International Maritime Organization[1], give China the opportunity to test the latest technologies, tools and materials in the region. At the same time Russia through integration with the PRC compensates for the technologies and technological solutions that are missing due to sanctions and are necessary for the implementation of its Arctic projects.
In other words, the current geopolitical and economic situation provides grounds for the development of bilateral Russian-Chinese relations in the Arctic.
However, at the same time, the factor of Russia’s traditional presence in the Arctic comes into conflict with China’s Arctic ambitions that have emerged relatively recently. Russia has every reason to fear China’s rapid entry into Arctic affairs. Thus, the program announced by China to build a fleet of its own icebreakers and vessels for operation in the Arctic [8] can be interpreted as China’s intention to establish a monopoly on the use of this transport artery and reduce the price of transportation, which will worsen Russia’s position in the transport market.
Among the significant projects for Russia and China related to the NSR, the Yamal LNG liquefied gas production project stands out as the most representative example of the collaboration of the two countries in the Arctic. The Chinese side owns almost a third in the 27 billion project implemented by the Russian gas giant NOVATEK PJSC: Silk Road Fund owns 9.9%, and China National Petroleum – 20% [13].
Chinese investors express their willingness to invest in the construction of a new deep-water port in Arkhangelsk and the Belkomur railway (White Sea – Komi – Urals), which will shorten the route from Siberia to the White Sea by 800 km. This project involves the use of the Arkhangelsk port with an annual cargo turnover of about 30 million tons as a docking point for the NSR with the Russian railway system [14].
For the Far East, a promising project for the development of the NSR infrastructure is the Northern Transit corridor, which will provide a connection between the northern provinces of China and Western Europe and strengthen the intra-regional transport links of the Far East itself. The main settlements of the Northern Transit corridor will be: Mohe – Dzhalinda – Skovorodino – Tynda – Neryungri – Yakutsk – Tiksi [15].
Involvement of the Dzhalinda river checkpoint, located near the intersection of the Trans-Siberian and Baikal-Amur railways, in the system of the Northern Sea Route implements a clear advantage of the Northern Transit transport corridor – its short distance. The Mohe (China) – Dzhalinda – Skovorodino – Tynda – Neryungri – Yakutsk section will connect China with the Northern Sea Route through the Amur Region and Yakutia. At the same time, the maximum volume of Russian-Chinese cargo traffic can exceed 700 thousand tons, and the passenger traffic can reach over 180 thousand people.
(End of introductory fragment)
[1] International Maritime Organization is responsible for the safety and environmental performance standards of international shipping.