00:00China has opened a new route to Europe, but this route is neither the Suez Canal nor the Cape of
00:04Good Hope. It's the Arctic. China has begun opening up the Arctic Shipping Route. Now,
00:08ships are regularly traveling back and forth on this route. The Wall Street Journal reported
00:11on August 14 that the Chinese container shipping company Xiyi Legend is launching the Arctic
00:15Express, which connects Ningbozushan Port in China and Felixstowe Port in the UK. Also,
00:19China's state-run media Global Times reported that the first ship, Dubai Tower, departed as
00:23scheduled. As a result, a new Arctic shipping route is expected to be established. Xiyi Legend
00:27plans to deploy seven container ships once a week. Unlike the Danish shipping company Maersk,
00:31which conducted a trial run with just one container ship in 2018, Xiyi Legend will repeatedly deploy
00:36multiple ships on a fixed schedule. To be completely honest, the Arctic's shipping route is not
00:40economically viable at all right now. The current routes are simply cheaper. Currently, in terms of
00:44cost alone, it's less favorable than the Cape of Good Hope route, but if conditions are created for
00:47the Arctic route to operate reliably, the situation could change. In particular, as the shipping distance
00:52becomes shorter, it's important that ships can reduce the amount of fuel needed for a single
00:55voyage and also increase the number of voyages they can make in a year. For logistics companies,
00:59the shorter the voyage period, the more cargo they can transport with the same ship.
01:03Another important aspect is the risk associated with the existing maritime routes connecting
01:06Europe and Asia. The Cape of Good Hope route has a long shipping distance, and the route using
01:10the Suez Canal can also be greatly affected by international circumstances. For China, this means
01:14reducing dependence on specific routes and securing a new maritime logistics network to Europe.
01:18However, there are many issues that need to be resolved for the Arctic route to be commercially
01:22expanded. The period during which navigation is possible is limited, and sailing plans can change
01:26depending on weather and sea ice conditions. Ships also need to be designed to withstand Arctic
01:30conditions, and if problems occur on the route, additional costs for icebreaker support may be
01:33required. Insurance premiums and ship operating costs are also likely to be higher than those of
01:37regular routes. The figures in the COPAS report show this reality. Even in the basic scenario where
01:41icebreakers are not used and the Brent crude oil price is set at $65 per barrel, the shipping cost
01:46via the Arctic route from Shanghai to Rotterdam was calculated at $277.73 per container.
01:51On the other hand, the Cape of Good Hope route was $200.77. Under current conditions, the Arctic
01:56route is about 38% more expensive, therefore it's difficult to judge China's current investment in
02:01the Arctic route based solely on current shipping costs. China appears to be trying to secure a new
02:05long-term European logistics network while factoring in possible changes in Arctic ice conditions and
02:09route infrastructure. In fact, if you look into it a bit, you can easily see why China is already
02:13stepping into the Arctic route even though the commercial scale is still small. Strangely enough,
02:16China even refers to itself as a near-Arctic state. In its 2018 Arctic policy, White Paper China
02:21defined itself as a near-Arctic state and expressed its intention to participate in Arctic routes and
02:25resource development. In 2026, it also deployed four research vessels, including three icebreakers,
02:29for scientific exploration in the Arctic Ocean. At the same time, China is continuing to expand its
02:33influence in the Arctic Ocean. For this reason, Colorado Pass estimates that within the next five
02:36years, the potential trade volume that could shift to the Arctic route could reach up to $64 billion
02:39or about $90 trillion won. This amounts to about 3.5% of the total trade volume among East Asia,
02:46North America, and Northern Europe. China seems to believe that if it is the first to use the Arctic
02:50route, it will be able to dominate it. And global warming is also becoming much more serious.
02:55NASA reports that the area of Arctic sea ice in September has been decreasing by 12.2% every decade
03:01since 1979. So before long, all the ice in the Arctic Ocean could really melt away. There's one more
03:06important variable to consider when understanding the Arctic route, that is Russia's icebreaker
03:10capabilities. Because the Arctic route passes through areas with sea ice, not all ships can
03:15navigate it on their own. In sections where the ice is thick, icebreakers need to move ahead first to
03:20secure the route and support the safe navigation of the merchant ships following behind. Therefore,
03:24as the commercial use of the Arctic route expands, the influence of countries with the capability to
03:28operate icebreakers will inevitably grow. Russia is currently the country operating a large fleet of
03:32icebreakers in the Arctic region. Since Russia manages the Arctic route, controls the operating
03:36conditions of ships and provides icebreaking support. Cooperation with Russia becomes an
03:40important condition even if Chinese shipping companies use the Arctic route. In order for
03:44China to expand its operational experience and logistics network on the Arctic route,
03:47it needs to utilize Russia's ports and icebreaking support system. In this structure, it is also
03:51necessary to look at the relationship between China and Russia from an economic perspective.
03:55Russia sees trade and investment with China as even more important as Western sanctions continue,
03:59and China, while securing Russian energy and raw materials, can also gain access to Russia's
04:03Arctic infrastructure. As the interests of both countries align, there are also analyses suggesting
04:07that China's economic influence in Russia is growing. The problem is that this kind of
04:11economic relationship could also affect the operation of the Arctic route. If Russia becomes more
04:15dependent on China as a major economic partner, it may become difficult for Russia to ignore China's
04:19demands. In particular, from China's perspective, what may be more important than Russia itself is the
04:23geographical location and infrastructure that Russia possesses in the Arctic region. In the Russian Arctic
04:27region, there are ports, energy facilities, and an icebreaker support system in place, and a significant
04:31portion of the Arctic route passes through waters under Russian jurisdiction. For China to expand
04:35its logistics activities in this region in a stable manner, it is very important to maintain its
04:39relationship with Russia. Therefore, it is necessary to view China's approach to Russia in connection
04:43with the Arctic route. Through economic cooperation with Russia, China can secure energy and raw materials,
04:48while also gaining the operational experience and infrastructure access needed in the Arctic region.
04:52Russia can also promote the development of the Arctic region by utilizing China's capital and
04:56logistics demand. The point where the interests of the two countries intersect is the Arctic route.
04:59However, it is important to note that China's pioneering of the Arctic route can also be an
05:02opportunity for Korea. If the use of the Arctic route expands, the role of Busan port is likely to
05:06become greater than it is now. This is because Busan port holds an important position in the major
05:10maritime logistics network connecting Asia and Europe, and it is one of the large ports in Northeast
05:14Asia where ships using the Arctic route can handle cargo. In particular, if a transshipment structure is
05:18formed where cargo from China, Japan, and other countries is gathered at Busan port and then transported to
05:23Europe via the Arctic route, it could lead to an increase in cargo volume at Busan port. Experts are paying
05:27attention to the fact that Busan port is the world's second largest container transshipment port,
05:31as well as the last major port that can be used before entering the Arctic route.
05:34If ships using the Arctic route can load or transfer additional cargo at Busan port,
05:38there is a possibility that Korea could serve as a logistics hub for the Arctic route.
05:42In particular, if Korean ships operate on the Arctic route, the position of Busan port is important
05:46because it allows us to secure enough cargo before departure. There are also opinions that the role of
05:50Busan port should not be limited to just a place for transferring cargo. If the Arctic route expands,
05:54demand for ships capable of operating in polar environments may increase, opening up a new
05:57market for the Korean shipbuilding industry. In addition, related industries such as ship
06:01insurance, maritime finance, ship repair and maintenance needed for polar operations,
06:05and fuel supply also have the potential to grow together. If these industries are connected around
06:09Busan port, the expansion of logistics on the Arctic route could lead to growth across the domestic
06:13shipping and shipbuilding industries. The government is also looking for ways to utilize the Arctic
06:16route in the mid to long term. They are continuing preparations to achieve the goal of opening a
06:21regular service route by 2030. Although everything is still in the planning stage,
06:24they are steadily working through the challenges one by one. What we need to pay attention to here is
06:28that the United States and Western countries do not see the expansion of the Arctic route as simply
06:32a change in maritime transportation. If the Arctic route actually becomes a commercial route,
06:36China and Russia will be able to expand their economic cooperation in the Arctic region.
06:39Especially if Chinese ships regularly travel through the Arctic waters managed by Russia,
06:43China's access to the Arctic region will improve, and Russia will also be able to utilize China's
06:46capital and logistics demand. For the United States as well, the Arctic is an important strategic
06:50region. The United States has direct access to the Arctic region through Alaska, and Canada also has
06:55extensive Arctic territory. In addition, Norway and Denmark also have important interests in the
06:59Arctic region. These countries have no choice but to closely watch how the expansion of maritime
07:02traffic in the Arctic will affect their own security and economies. Honestly, if China's and Russia's
07:07influence grows in the Arctic, the United States will inevitably see this as a security threat.
07:11If you look at it from across the sea, it's right next to the US mainland, as areas that were
07:15previously inaccessible are gradually opening up, the United States can't help but feel threatened.
07:19The reason why the United States wants to take control of Greenland right now is also because
07:22of these reasons. Also, as the importance of the Arctic sea route grows, Arctic countries may present
07:26different views regarding new maritime traffic rules and navigation standards. In the Arctic region,
07:31it also becomes an important issue to determine how far a country can exert its influence and how to
07:35apply regulations on ship operations and environmental protection. Therefore, the development of the
07:39Arctic shipping route can provide economic opportunities for China and Russia, while at the same time
07:43creating new strategic challenges for the United States and Western countries. In the future,
07:47competition surrounding the Arctic sea route is likely to involve not only ports and transportation costs,
07:51but also issues related to maritime traffic, resources, security, and international norms.
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