As the polar ice in the Arctic begins to melt, opening new shipping channels to Europe and North America, Dalian port — China’s eighth largest and a rising trade and transit hub of northeast Asia — is gearing up for business.
“We are exploring the Arctic trade route in detail and Dalian Port Group is doing substantial groundwork,” says Zhang Hongguang, Deputy Director of the Dalian Free Trade Zone Management Committee, in a conversation with The Hindu .
Dalian, which has witnessed ebbs and flows of history, including the Russo-Japanese war of 1904-05 when a rising Asian power had humbled a European thoroughbred, is not unfamiliar in exploring the Arctic’s freezing waters.
Six years ago, China Ocean Shipping Company (COSCO) sent a ship from Dalian to Rotterdam, the Netherlands, with a plan to arrive at its destination in 30 days. The ship accomplished its mission after crossing the Bering Strait and Russia’s northern coastline. The voyage of the Yong Sheng , in turn, trickled vital first-hand data for tackling practical problems that Chinese shippers would encounter in the future. Over the past five years, COSCO has logged 22 jaw-dropping voyages, emerging as a global leader in transiting shipments through the Russian Arctic.
“Our development strategy is to serve the Polar Silk Road and international trade between the North Atlantic region and the Far East,” said Chen Feng, the head of COSCO’s marketing and sales division, earlier this year, at the Arctic Circle China Forum in Shanghai.
The Arctic is the gateway to three routes. The Northeast Passage or the Northern Sea Route is the most commercially viable of the three, which connect to the Atlantic and the Pacific oceans. The Northwest Passage, the second promising route, goes along the northern Canadian and Alaskan coasts. The third, the Transpolar Sea Route, is the shortest, but the most unviable, as it passes through the thick ice sheets of the North Pole, which are not navigable.
Distinct advantages
Despite the natural hardships and shortfalls in infrastructure along the way, the Arctic routes offer China some distinct advantages. Shippers heading from Shanghai to Hamburg in Germany are able to shave off a cost-saving distance of 5,200 km, if they choose the Northern Sea Route over the traditional sea passage via the Suez Canal.
Then there is geopolitics that is drawing the Arctic zone into the rivalry between a multipolar Eurasia, which includes Russia, China and India, with the U.S. The U.S. resents China’s forays into the Arctic passage, as this will lower Beijing’s strategic dependence on the Washington-dominated Strait of Malacca that links the Indian and the Pacific oceans.
In tune with the growing trade and technology war with the U.S., China is bonding with Moscow to develop the Arctic passage. The two have also emerged as major stakeholders in developing the Russian Far East — President Vladimir Putin’s pet project.
Encouraged by Mr. Putin, the Russian Far East, rich in oil, gas and timber, is also drawing India into the Arctic’s equation. The Russians have invited Prime Minister Narendra Modi to head the table at the Eastern Economic Forum in Vladivostok in September. New Delhi and Moscow have already hailed the Arctic region’s oil and gas as a “new area of focus”.
Positioned on the frontline of the Arctic zone, Dalian is playing a key role in the economic consolidation of western and eastern flanks of Eurasia. At the port, officials acknowledge that Russia is their biggest supplier of crude, which is channelled through a pipeline to a Petrochina refinery on the premises. “Not only is this crude used for China, but from Dalian, it can be further exported across the sea to other demand centres such as South Korea and Japan,” says Xia Ting, Business Manager, Dalian Port Container Company.
From the top of a tower at the sprawling port, a maze of intersecting rail lines also come into view, some heading in the direction of Central Europe and Russia. The rail connection allows Dalian port to lubricate Japan and South Korea’s trade with Central Asia, Russia and Central Europe. On arrival in Dalian, seaborne containers from South Korea and Japan can be transshipped by rail to destinations to the West.
Atul Aneja is The Hindu’s Beijing correspondent
