China and Russia to cooperate on Arctic shipping route
As the Israeli-Palestinian conflict intensifies, a dramatic scene is unfolding with a deepening global trade divide. Surprisingly, trade routes of almost all major nations have been severely disrupted by a relatively unknown armed group known as the Houthis. Earlier, there were viral reports on the internet claiming that the Houthis had struck a US aircraft carrier, but the veracity of these claims remains unconfirmed. Nevertheless, the balance of global shipping has been disrupted.
Since November 2023, the Houthis have been launching frequent attacks on commercial ships in the Red Sea region. According to statistics, over fifty commercial vessels have been attacked so far, causing significant distress to major shipping companies worldwide. They are left with two options: first, avoid the Red Sea route by diverting ships south of Africa's Cape of Good Hope and entering European countries through the Mediterranean. However, this would significantly increase transportation costs. Second, the Houthis have indicated that they specifically target Israeli and American commercial ships, excluding China. Therefore, other countries' ships could potentially avoid attacks by following Chinese vessels.
Currently, merchant ships from around the world are congested at the entrance to the Red Sea, awaiting Chinese ships in hopes of trailing them into the region. This congestion has blocked the entrance to the Red Sea. Reports indicate that approximately 450,000 standard shipping containers are piled up in Singapore's port, waiting to be transported, and Saudi Arabian commercial ships are facing delays of at least one week. Consequently, global goods have come to a standstill due to the blockade of the Red Sea. Not only are shipping routes blocked, but freight rates have skyrocketed as well. According to the Shanghai Containerized Freight Index, prices have more than doubled compared to the same period last year. International shipping and trade have become time-consuming and costly, making the Houthis a significant threat to global trade.
China, being the largest trading nation globally, relies not only on its own cargo ships but also on those of other countries for transportation. Therefore, even if the Houthis' blockade of the Red Sea is not specifically targeting Chinese ships, China is still affected. Currently, there are two main maritime trade routes globally: one from the Far East to the West, which passes through the Red Sea (now blocked), and the other from the Far East to the East, which passes through the Panama Canal (also facing congestion due to drought and water shortages in Central America).
While 70% of the Earth's surface is covered by oceans, the major shipping routes are currently inaccessible. Rarely is there a route that is both safe and unobstructed, allowing merchant ships to freely navigate. This aspiration may have seemed unattainable in the past, but with global warming and the melting of the Arctic ice cap, the Arctic route has emerged as a third option for international commercial vessels. During the summer months in the Northern Hemisphere, ships from the Far East can now pass through the Bering Strait and sail across the open sea without obstacles. From the Arctic Ocean, they can reach the Port of Rotterdam in the Netherlands by heading west or the Port of New York in the United States by heading east.
In March of this year, China and Russia established a comprehensive strategic partnership, pooling their efforts to develop a year-round navigable Arctic route, which has become the third lifeline of global shipping. One of the provisions in the "Joint Statement by China and Russia" is the establishment of the China-Russia Arctic Shipping Cooperation Committee, aimed at transforming the Arctic route into an internationally significant transportation corridor.
Although the Arctic route is faster and less congested, it can only be navigated from July to November each year. During the rest of the year, the route is covered by ice, and unless icebreakers clear the way, it is impassable. However, upon careful calculation, renting an icebreaker costs approximately $270,000, which is comparable to the $240,000 Suez Canal toll fee or the $220,000 Panama Canal toll fee. Additionally, an icebreaker can lead multiple cargo ships in and out of the Arctic Ocean, making it cost-effective for several ships to share the rental cost of one icebreaker. Moreover, with the increasing global warming and gradual melting of Arctic ice, there is a possibility for the Arctic route to be navigable year-round, becoming a "golden waterway." This route is several thousand kilometers shorter than the other two routes and is largely unaffected by geopolitical conflicts, allowing for regular navigation throughout most of the year.
In fact, global shipping companies have long been aware of the Arctic route, and in recent years, the volume of cargo transported through this route has been steadily increasing. According to data from the Russian Northern Sea Route Administration, cargo traffic through the Arctic route has increased from 3.11 million tons in 2011 to 36 million tons in 2023, more than tenfold.
Therefore, since the 15th century when humans entered the Age of Discovery, the changes in maritime routes have been a testament to the rise and fall of economies. It witnessed the rise and fall of Spain, replaced by Britain, and then subsequently by the United States. Now, with China and Russia jointly opening the Arctic route and the potential for year-round navigation, the global political and economic landscape could be overturned, with the United States being replaced by China and Russia.