Chinese army think-tank says Arctic energy would help economy

BEIJING, June 18 Wed Jun 18, 2014 8:41am EDT

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BEIJING, June 18 (Reuters) - Oil and gas resources in the Arctic are an important resource to guarantee China's sustained economic growth and the country should actively look at developing it, state media on Wednesday cited a Chinese military think-tank as saying.

The Arctic Council agreed in May last year to admit emerging powers China and India as observers, reflecting growing global interest in the trade and energy potential of the planet's Far North.

The organisation, which coordinates Arctic policy, is gaining influence as sea ice thaws to open up trade routes and intensify competition for oil and gas - estimated at 15 percent and 30 percent respectively of undiscovered reserves.

The Defence Policy Research Centre of the Academy of Military Sciences of the People's Liberation Army singled out the Arctic as one of the chapters of an annual strategic assessment.

"The Arctic region has rich oil and gas resources and quick and convenient shipping conditions, which has important meaning for ensuring the sustained development of China's economy," the centre said in its report, according to excerpts published by the official China News Service.

"The Arctic region could become an important supply base in the future for China's overseas oil. China will ... open cooperation with Arctic countries with energy supplies."

China relies on overseas oil to help power its economy, now the second-largest in the world, and has long fretted about security of its supplies as so much of it has to flow through the narrow Malacca Strait, linking the Indian Ocean to the Pacific.

China has been active in the polar region of late, becoming one of the biggest mining investors in Greenland and agreeing a free trade deal with Iceland. Shorter shipping routes across the Arctic Ocean would save its companies time and money.

China already has mining links with Greenland and trade ties with Iceland. Greenland may have the world's biggest deposits of rare earths, used in smart phones and green technology.

"China sits in the northern hemisphere and has important strategic interests in the Arctic region, which relates to national economic development sustainability and national security," the think-tank wrote.

China has a right to a share of the Arctic's resources, be present in the region and to carry out scientific research there, it said.

China's growing involvement in Arctic affairs acts to prevent a minority of countries from dominating the region and protects the rights of non-Arctic countries, it said.

The Arctic Council groups the United States, Russia, Canada and Nordic nations. Observer status gives countries the right to listen in on meetings and propose and finance policies. (Reporting by Ben Blanchard; Editing by Robert Birsel)

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