As Europe disappears, Asia coheres. The supercontinent is becoming one fluid, comprehensible unit of trade and conflict, as the Westphalian system of states weakens and older, imperial legacies – Russian, Chinese, Iranian, Turkish – become paramount.
Nearly three years have passed since the China-Pakistan Economic Corridor (CPEC) was formally launched. Several projects have come online, and a critical mass of electric power and infrastructure projects will be operational within the next 12 to 18 months. Now, more than halfway through the first of CPEC’s three five-year phases, is an opportune moment to assess how Beijing and Islamabad have fared so far in pushing forward the massive, fifteen-year connectivity project, valued at upwards of $62 billion.
China’s interest in the Arctic seems to be driven by potential energy, commercial, and geopolitical benefits, but each comes with a caveat. First, the region has a wealth of energy and natural resources, boasting roughly 13 percent of the world’s undiscovered crude oil and 30 percent of undiscovered natural gas. While these oil and gas deposits are locked away under the Arctic seabed by thick ice sheets and harsh weather, the steady retreat of sea ice has paved the path to viable future extraction efforts. At present, China’s most significant link to the Arctic is through the Russian Yamal Liquified Natural Gas (LNG) project, in which Chinese companies hold stakes and provide significant financing. For its participation, China has secured long-term offtake of LNG from the project amounting to approximately 195 billion cubic feet per annum (or 4 million tons per annum). However, the appeal of Arctic oil and gas to global markets is subject to the cyclical nature of global oil and gas markets, as well as the future of other supply sources, including U.S. unconventionals. Arctic resource extraction remains difficult and expensive owing to the harsh climate, limited infrastructure, distance to manufacturing centers, and environmental sensitivities. These issues, which have hindered past onshore projects in Northern Russia and Alaska, will likely present even greater challenges for future offshore energy development efforts in the Arctic given adverse maritime conditions.
CSIS Reconnecting Asia Director Jonathan Hillman testifies before the U.S.-China Economic and Security Review Commission for a hearing on “China’s Belt and Road Initiative: Five Years Later.”
Chinese contractors are receiving the lion’s share of Belt and Road opportunities reports the Financial Times, citing data from Reconnecting Asia.