The real threat to S’pore – construction of Thai’s Kra Canal financed by China

By: 永久浪客/Forever Vagabond / October 2, 2016/ The Independent

The Kra Canal or the Thai Canal refers to a proposal for a canal to cut through the southern isthmus of Thailand, connecting the Gulf of Thailand with the Andaman Sea. It would provide an alternative to transit through the Strait of Malacca and shorten transit for shipments of oil to East Asian countries like Japan and China by 1,200 km, saving much time. China refers to it as part of its 21st century maritime Silk Road.

China is keen on the Kra Canal project partly for strategic reasons. Presently, 80% of China’s oil from the Middle East and Africa passes through the Straits of Malacca. China has long recognized that in a potential conflict with other rivals, particularly with the US, the Strait of Malacca could easily be blockaded, cutting-off its oil lifeline. Former Chinese President Hu Jintao even coined a term for this, calling it China’s “Malacca Dilemma”.

History of Kra Canal

The idea to shorten shipping time and distance through the proposed Kra Canal is not new. It was proposed as early as in 1677 when Thai King Narai asked the French engineer de Lamar to survey the possibility of building a waterway to connect Songkhla with Marid (now Myanmar), but the idea was discarded as impractical with the technology of that time.

In 1793, the idea resurfaced. The younger brother of King Chakri suggested it would make it easier to protect the west coast with military ships. In the early 19th century, the British East India Company became interested in a canal. After Burma became a British colony in 1863, an exploration was undertaken with Victoria Point (Kawthaung) opposite the Kra estuary as its southernmost point, again with negative result. In 1882, the constructor of the Suez canal, Ferdinand de Lesseps, visited the area, but the Thai king did not allow him to investigate in detail.

In 1897, Thailand and the British empire agreed not to build a canal so as to maintain the importance of Singapore as a shipping hub, since by that time, Singapore was already prospering as an international hub with great importance to the British.

In the 20th century the idea resurfaced with various proposals to build the canal but did not go far due to various constraints including technology and cost constraints as well as indecisive political leadership of Thailand.

China shows Thailand the money

In the last decade, China has now become the potential game changer who can possibly turn Kra Canal proposal into reality in the 21st century. It has the money, technology and strong political leadership and will to support the project if it wants to.

Last year, news emerged that China and Thailand have signed an MOU to advance the Kra Canal project. On 15 May 2015, the MOU was signed by the China-Thailand Kra Infrastructure Investment and Development company (中泰克拉基礎設施投資開發有限公司) and Asia Union Group in Guangzhou. According to the news reports, the Kra Canal project will take a decade to complete and incur a cost of US$28 billion.

But 4 days later on 19 May, it was reported that both Chinese and Thai governments denied there was any official agreement between the 2 governments to build the canal.

A statement by the Chinese embassy in Thailand said that China has not taken part in any study or cooperation on the matter. It later clarified that the organisations who signed the MOU have no links to the Chinese government. Separately, Xinhua news agency traced the announcement of the canal project to another Chinese firm Longhao, which declined comment when contacted.

Dr Zhao Hong, an expert on China-Asean relations from the Institute of Southeast Asian Studies, told the media that China would not embark on such a project lightly, given the political and bilateral implications.

“China will have to consider the feedback from countries such as Singapore, which it has friendly ties with, given the impact that the Kra canal might have,” he said at the time when news of the MOU emerged. But Dr Zhao added that China might be open to private companies studying the feasibility of such a project, but will not directly back it for now. Read more…

 

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