China & Russia Plan To Strengthen New Arctic Shipping & Logistics Hubs

China and Russia have decided to strengthen their ties in the Arctic by building new shipping and logistics hubs, Russian President Vladimir Putin said during a meeting with Chinese President Xi Jinping in Moscow.

During a joint press conference, Putin said that major progress had been made in developing and commercially using the Northern Sea Route (NSR), a key Arctic shipping route.

He stated that cargo and passenger traffic between the two countries has continued to grow every year, supported by expanding border crossings, some of which now operate 24/7. He added that new logistics hubs are now in development to support this growth.

Since Russia invaded Ukraine, trade between Moscow and Beijing has become the main source of traffic on the NSR. Last year, 95 percent of all cargo on the route was between China and Russia.

Putin said that Arctic logistics has been a long-term personal project for him, with ongoing support for the launch of nuclear icebreakers, military bases in polar regions, and major oil and gas developments in the far north.

The Russian leader emphasised that the Russian-Chinese partnership, especially in Arctic and transport-related cooperation, would continue to be under his direct oversight. He added that both countries highly value building international transport routes across Eurasia.

Trade between the two countries has seen a major boost in recent years. Since 2020, it has doubled and reached a record $245 billion in 2024. China has now become Russia’s top trading partner.

Much of this trade involves crude oil and liquefied natural gas (LNG) shipped through Arctic routes.

Putin pointed out that LNG shipments from Russia to China have also increased. However, growth in this sector has recently slowed. Despite the launch of Russia’s Arctic LNG 2 project in August 2024, there have been no recorded deliveries from it so far.

One of the reasons for the slowdown is Western sanctions, especially those from the United States. Chinese buyers are cautious about purchasing LNG from the sanctioned project due to the risk of violating US restrictions.

Russia has been trying to create a so-called “shadow fleet” to secretly deliver LNG and bypass sanctions, but these attempts have not succeeded so far.

During the Moscow meetings, Russian and Chinese ministers discussed ways to overcome these hurdles. Russian Energy Minister Sergei Tsivilev confirmed that talks are underway about the possibility of Chinese companies entering new Russian LNG projects.

He told Russian media outlet Interfax that the topic is actively being discussed at the summit level.

After the meeting with Xi, Putin once again repeated that “new logistical hubs are in the making,” and that trade volumes on the Northern Sea Route are going up each year. He also said that the improved capacity at border points is supporting this growth.

Xi Jinping is visiting Moscow ahead of Russia’s annual May 9 Victory Day celebrations, where foreign leaders are expected to attend a military parade in Red Square.

Many of the soldiers marching in the parade are returning from the frontlines in Ukraine. Chinese troops from the People’s Liberation Army are also expected to take part in the parade.

This is the eleventh meeting between Putin and Xi, showing how close the two leaders have become. Their partnership now includes Arctic cooperation as a major focus.

Both countries said they want to keep the Arctic peaceful and stable and avoid any political or military tensions in the region.

Their Arctic cooperation began more formally in March 2023 when Xi visited Moscow and the two sides decided to create a joint working group for the Northern Sea Route.

Later that year, in October 2023, Putin visited Beijing and Arctic logistics was once again a key agenda item. In October 2024, their foreign ministries agreed to increase dialogue on Arctic matters.

By December 2024, high-ranking officials from both countries held the first meeting of their newly formed joint cooperation body focused on the NSR.

Reference: arctictoday

Source: Maritime Shipping News