New Trade Routes through the Arctic between Asia and Europe

 

Map of new shipping routes between Asia and Europe Source: The Economist

New Shipping routes between Asia and Europe 

The ice in the Artic is melting away at a record-breaking rate opening up new possibilities for shipping routes. Measurements taken in August 2012 found the levels of Arctic sea ice were at their lowest levels since satellites began measuring the ice in 1979. In 30 to 40 years, it is quite possible that there will not be no summer ice at all. This has led to an increased interest in shipping in the Arctic. New shipping routes opening up due to the melting ice could cut shipping times between Asian and European ports by up to a third. It is possible that the first commercial trade voyage could take place as early as summer 2013 led by China, and the potential value of goods travelling the new Arctic routes could become highly significant.

Xue Long 雪龙 expedition throught the Northern Sea Route 

China has been taking a strong interest in the region over the last decade, building a physical presence and using diplomacy and trade ties to engage in the region. The Chinese ship Xue Long (Snow Dragon) 雪龙 became the first ship to sail the Bering Sea after crushing the ice across the Arctic Ocean in August 2012. The icebreaker sailed all along the Northern Sea Route into the Barents Sea and returned by sailing a straight line from Iceland to the Bering Strait via the North Pole.

China has also set up a multidisciplinary research base with 18 researchers called the Yellow River Station on Svalbard the Norwegian archipelago (See map above) since 2004. The Xue Long 雪龙 voyage in summer 2012 was a culmination of China's research so far and a test of the Northern sea route to check out the feasibility of it becoming a new shipping route through the Artic that could link Asian and European ports. China has also recently commissioned a new 120m icebreaker ship to be built by a company in Finland to further its Arctic research. 

New Asian permanent observers on the Arctic Council in 2013 

The rules of the Arctic Council state that only countries with territories in the Arctic can become full members of the Artic Council. Nevertherless at the biennial meeting of the Council on 15 May 2012 in Sweden, 5 Asian countries: China, Japan, South Korea, Singapore, India and Italy became permanent observers. China, sees itself as a “near-Arctic state”, and had been seeking to become a permanent observer since 2006 (it had previously has its application rejected three times). But this time with Iceland's support and with the possibility of China and Iceland setting up a new Arctic forum, the members of the Arctic Council decided to widen the Council to include their Asian counterparts.

Interestingly, most of the new joiners were already observers on an ad hoc basis. The six new members will not have speaking or voting rights. But they will be able to influence decisions in the council’s six working groups with their expertise, research and potential funding of initiatives in the Arctic. China, for example, has led five marine expeditions in the Arctic since 1999, including the Xue Long 雪龙 voyage in summer 2012. Japan and South Korea may decide to conduct their research with their own icebreakers ships too. The new Asian observers will bring fresh new ideas to the Arctic region and advance the use of new faster trade routes between Asia and Europe over coming years. The Geo-Trade Blog will continue to follow developments in the Arctic.

Values in the 21st Century - Europe, US and China

围棋 based on encircling your opponent on the Board provides an insight into Chinese values

Max Weber and Karl Marx, the founders of modern sociology, underestimated the importance of the way people in power think, behave and persuade others of the supremacy of their values. 

The Soldier, the Merchant and the Sage

Throughout most of history three groups, the soldier, the merchant and the sage, have struggled to gain predominance over a fourth group, the greater populous. When one of these groups achieves unchallenged control over the others the result has culminated in an imbalance of values leading to war, economic disaster or revolution.

Interestingly, most societies are based on an informal alliance between two of these three groups. For example, early agrarian societies were often led by aristocrats with warrior and landowner values (soldiers) in close alliance with priests (sages), who provided a spiritual justification for their rule. The merchant was usually tolerated for bringing wealth through trade, but was also resented for being cleverer and often richer than traditional elites.

During the 17th century, the merchant's power increased and decreased always dependent on protection from the soldier group. But it was not until the late 17th century that merchants first began to emerge as the dominant group in Europe. 

 

During the 19th century the rise of “soft" merchant values really took off. The British used their growing empire as a force for promoting free trade and globalisation in the so called interests of all. Nevertheless their competitors regarded these imperial projects as less benign. By the mid-19th century, the world of merchants was becoming one of competing business cartels, increasingly backed by the might of Nation States. But no country adopted the values of the “warrior-hard merchant” with more vigour than Bismarckian Germany, where repression at home and brutal zero-sum commercial competition with other rising industrial powers became the order of the day. The first world war was largely a consequence of the limits of allowing  merchant values to become the dominant group of values.

After the first world war, the US emerged as the wealthiest nation and dominant exporter of capital. This led to the spread of a new form of merchant power across much of the developed world in the form of debt-fuelled consumer capitalism. Yet the massive financial and trade imbalances that resulted again brought the dominance of merchant values to an end with the  Depression in the early 1930s.

The second world war ultimately inspired a new alliance of “sagely technocrats” and “soft merchants”. They were determined to learn the lessons of the past, this partnership worked to create a new world order of prosperity and social harmony. The early fruit of the combination of these values was the Bretton Woods monetary system, which established the rules governing commercial relations between the developed industrial nations.

 

Interestingly, the collapse of the Bretton Woods System in 1971, heralded a new renaissance of the dominance of hard merchant values. This period was led by the Anglosphere and was characterised by the so-called Washington consensus and "Davos Man". It launched a renewed age of the dominance of merchant values without the sagely values to reign it in. This age still continues today. To understand the banking and sovereign-debt crisis that has taken hold since 2007/08, the Geo-Trade Blog believes the US and Europe are paying the price for succumbing to the values of merchants, who believe in the justice of the market, and prize the pursuit of short-term profit fuelled by credit and risk. 

 

But perhaps there is a much broader problem. Modern democratic governments in the US and Europe play a much larger role in the economy than any governments in the ancient Greek democracies could ever have imagined, therefore, this in turn makes political leaders a huge source of patronage, in the form of business contracts, social benefits, jobs and tax breaks.

What are China's中国 values ?

Perhaps a more interesting question in the 21st century is, which of these three groups, the soldier, the merchant and the sage will gain dominance in a China led world? China owes its re-emergence to its embrace of the contemporary US and European model of modernisation – to a large extent driven by hard merchant values that put the country on its current path more than three decades ago. But the question of values remains unanswered.

It is interesting to note that Chinese traditional values are being replaced by what researchers have identified as an emphasis on material values - making money has become a major concern for most Chinese people. The new material values are expressed by a desire to buy apartments, cars and fashionable clothes. Showing external signs of wealth has become a basic social requirement.

The Chinese do not play chess, a game with a rather adversarial objective to eliminate your opponent from the board. Instead the Chinese invented 围棋 where the object of the game is to encircle your opponent and gain control of a larger total area of the board (see above picture). To some extent, this provides an insight into the different ways of thinking in Europe and the US compared with China 中国. 

In traditional Chinese culture, righteousness, or justice are perceived to be an important value. If democracy can protect an individual's political rights, it would seem the Chinese are sceptical as to whether it can ensure that people use their power to do the right thing. In Chinese culture, the legality and morality of procedure as well as the result are both just as important. Here in lies the eternal challenge that all democracies are forced to grapple with - what if the laws and democratic processes do produce “immoral” results, for example, an extreme-right wing party is able to win power in democratic elections or what of wars fought by a country that are not supported by its citizens.

In conclusion, it would seem that there is some commonality of horizon but the ways of thinking and framing problems remain different. It is still too soon to tell what combination of the Soldier, Sage and Merchant values will emerge in China 中国 as dominant but the Geo-Trade blog will continue to follow closely the new thinking on values emanating from China 中国 in the 21st Century.

Nuclear powered aircrafts, could they become a reality?

Artist's impression of a nuclear powered aircraft

A recent work by Cranfield University's Bhupendra Khandelwal on an air transport model that combines nuclear-powered cruisers with chemical-powered short-range transports considers this possibility. As these long-range cruisers continually fly looping tracks that cross oceans and take them over major population centres, shorter-range aircraft would bring up passengers and cargo that would ride on the cruiser until they reach their destinations, where they would transfer to other short-range aircraft and fly down to land.

He has developed an air transport model (below) that combines nuclear-powered cruisers with chemical-powered short-range aircraft.

Graphic courtesy of Cranfield University Study, UK.

Taking off from conventional airports, flying to and landing on the cruiser, the chemical-powered transport would be optimised for take-off, climb and landing, with no need to cruise. This would reduce emissions, says Khandelwal, as the nuclear-powered transport would carry the aircraft to its destination, where it would detach from the cruiser to descend and land normally.

The cruiser, meanwhile, would have taken off from a remote site. This and its extreme endurance, which significantly reduces the number of take-offs and landings, would minimise the risk of a crash leading to a nuclear incident. Also the cruiser would be unmanned, he says, improving safety and avoiding the risk to a crew of prolonged radiation exposure during the cruiser's extended voyage. For further safety, the cruiser would have back-up chemical propulsion.

Khandelwal calculates this air-transport model could produce a fuel saving over conventional point-to-point flights of 40% for a 1,000km mission, rising to 85-90% for a 10,000km mission, where the chemical-fuelled flights to and from the cruiser would be a smaller fraction of the total.

Nuclear propulsion could be either direct or indirect cycle. In direct cycle, air flows through the compressor, into the reactor where it is heated, and out through the turbine. The risk here is radiation in the exhaust gases. In an indirect cycle a heat exchanger transfers energy from the reactor to the airflow. The radiation risk is reduced, but so too is thrust. 

Khandelwal's work provides much food for thought on new models of air travel in the 21st Century. The Geo-Trade Blog will continue to follow new innovative models for air transport with the potential to reshape travel and trade.

Space Air Travel – the new frontier. If NZ and Australia were only 2 hours away



Virgin Galactic SpaceShip Two craft

The history of spaceflight is short and until recently, largely uninnovative. Nazi scientist Wernher von Braun helped develop the basic technology, which involved using large amounts of liquid fuel to push large weights to escape velocity. This technique lasted throughout the cold war and beyond.

Today, Virgin Galactic is trying to buck the trend. Its SpaceShip Two craft, designed by Scaled Composites, is essentially a glider with a rocket attached. Carried aloft by a subsonic aircraft, it is launched in the air and then the rocket carries it to 109km (just over the 'Karman Line' which delineates suborbital flight from atmospheric flight). Then it glides back to earth, completing the three-hour mission.

But perhaps the real story here is the potential to apply this technology to inter-continental space travel around the Earth. Experts say that by travelling into near-Earth orbit, the length of inter-continental flights could be cut dramatically, so a flight from London to Sydney could last just two hours.

Imagine what it would mean if the Asia Pacific region were to be within commuting distance for passenger travel to Europe, US, Latin American and Africa. It would dramatically change the notion of time and space in such a way that we have not known since the invention of telegraph technology that modernised the world in the 19^th century by breaching time and space.

Inter-continental space travel would bring the world geographically closer and would eliminate the distance barrier for the world's most isolated countries like New Zealand. In elapsed time travelling New Zealand would be as close to London as Northern European countries. It would bring continents together.

For the first time we are closer than ever to this becoming a reality in the 21^st century.

What has happened so far

The construction of the World's first facility for commercial space travel in the Rio Grande valley of New Mexico is nearing completion. Spaceport America is the first of its kind in the world. Virgin Galactic has signed up to be the anchor tenant for 20 years and has dedicated hundreds of millions of US dollars to developing the technology.

The inauguration of the world's first spaceway (that is runway for space air travel) at the world's first commercial built spaceport was held in Autumn last year.



Spaceport America - the world's first Spaceport for commercial
space travel

Virgin Galactic's Sir Richard Branson said at the event “...the last few weeks have been some of the most exciting in Virgin Galactic’s development. Our spaceship is flying beautifully and will soon be making powered flights, propelled by our new hybrid rocket motor, which is also making excellent progress in its own test program...we are seeing unprecedented numbers of people coming forward to secure their reservations for this incredible experience.”

It is still unclear when Virgin Galactic will make it's first flight into space but the Geo Trade blog will continue to monitor progress on the first space flights closely and will keep you updated on all developments on near-Earth orbit inter-continental flights.

Photos Source: Courtesy of the Virgin Galactic website