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24 Apr, 2012 12:35

China seeking piece of Arctic pie

It’s a long way from China to the arctic, but the country’s Premier Wen Jiabao has been in Sweden signing a number of energy deals during his European tour.

"We hope to work together with relevant countries, including Iceland and Sweden, to contribute to peace, stability and sustainable development in the arctic," Vice Foreign Minister Song Tao told journalists ahead of the visit.Though Wen Jiabao promotes industrial and scientific cooperation, many believe, getting access to the energy resources of the region are top of the agenda. As the world’s biggest energy consumer China is always seeking new sources. Wen Jiabao has already got a piece of energy pie as he inked some agreements in Iceland.Experts say, the task is challenging, “In a key question whether the Nordic countries and especially the Arctic states will give China some backup in fighting for resources in the Arctic Ocean, I think China will find it’s going to be tough, because the Arctic powers like Russia, Canada, US, Norway, Denmark don’t want other countries to come in, especially China,” Francis Lun, Managing Director at Lyncean holdings Ltd told RT.The arctic may contain 20 percent of the world's oil and gas reserves, though the reserves are notoriously hard to reach and present huge environmental challenges.During his visit to Iceland Mr Jiabao signed projects on geothermal sciences; marine and polar sciences; geothermal research; and a solar project. While Iceland's Orka Energy signed a deal with China Petrochemical Corporation of the Sinopec Group on using geothermal energy in China.Other trade deals are expected to be signed during Wen's visit to Sweden including those with telecom equipment maker Ericsson, auto maker Volvo and ball bearing producer SKF, thefinancial daily Dagens Industri (DI) reports.The deal between Volvo and the China Development Bank will provide the Swedish brand with a 75-billion-kronor ($11 billion) investment program until 2015.But it’s not only resources that attract China to the arctic. The country is also interested in a shorter way to deliver goods to China, Europe and Americas through the Arctic Ocean. “But China has interest in maintaining the internationalization of Arctic Ocean and also in right for passage for Chinese ships,” Mr Lun said. “China doesn’t want to pay Canada or US for the right to use it. But the problem is in established powers that protect their own interests”. Indeed, China’s overtures to Scandinavian countries hasn’t always been an easy ride. Last year, the Iceland Government rejected a plan by a multi-millionaire Chinese developer Huang Nubo to build a tourist resort in the northeast corner of the island.Currently Huang is in the midst of negotiations on a new plan with Icelandic municipalities in which he would instead lease the property. But now he is likely to get a green light according to sources.China’s investment is becoming more lucrative for Iceland which has been struggling with financial problems for several years.“China will overcome Europe economically sooner or later, maybe sooner. So it will be better for the global community to accept the emergence of China as an economic superpower and accept the world with China, rather than oppose it” Mr Lun explained.