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

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By: 永久浪客/Forever Vagabond

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.

It was said that the the chairman of Asia Union Group, the Thai party which signed the MOU, is former Thai premier Chavalit Yongchaiyudh, a long-time supporter of the Kra Canal.

Thai PM: Kra Canal project should be looked into by future democratic governments

In Jan this year, the Thai PM reiterated again that the Kra Canal project is not on his government agenda. His announcement came after a member of the King’s Privy Council, Thanin Kraivichien, wrote an open letter to the government advocating for the canal’s construction.Thanin was the 14th PM of Thailand between October 1976 and October 1977. His call is part of a growing chorus of Kra Canal proponents in Thailand’s political and business communities that started talking openly last year after several Chinese firms expressed interest in funding and constructing the canal.

Responding to Thanin’s call for the project, the Thai PM said the Kra Canal project should be looked into by democratic governments in the future, meaning to say Thailand has not ruled out the construction of Kra Canal completely. And in the case of Thailand, changes to its government occur frequently like the changing of clothes.

China getting angry with Singapore

In the last couple of months, China is increasingly angered by PM Lee’s move to side with the US over the South China Seas issue, even though Singapore has no claims over any of the territories there.
It all started 2 months ago when PM Lee was invited to the White House and was hosted to a rare White House state dinner on 2 Aug(http://theindependent.sg/pm-lees-speech-at-white-house-state-dinner-angers-china). During his toast, PM Lee welcomed the US to adopt a strategy to “rebalance” the Asia Pacific and went on to call President Obama as the “America’s first Pacific President”.
China immediately responded through their Global Times. “Lee Hsien Loong addressed Obama as the American ‘first Pacific President’. Such flattery (‘戴高帽’) given to Obama directly does not concern us (‘倒也没啥’),” the Global Times’ article said. “The key is he praised the American strategy to ‘re-balance Asia-Pacific’ and publicised that all Southeast Asian countries welcome such American ‘balancing’. Because the ‘rebalance Asia-Pacific’ strategy is pointed at China to a large extent, Lee Hsien Loong is clearly taking side already.”
“If Singapore completely becomes an American ‘pawn’ (‘马前卒’) and loses any of its resilience to move between US and China, its influence will be considerably reduced. Its value to the US will also be greatly discounted,” it added.
The article went on to say that China has its limit in tolerance. It said, “Singapore should not push it (‘新加坡不能太过分’). It cannot play the role of taking the initiative to help US and South East Asian countries to go against China over South China Sea matters. It cannot help American ‘rebalancing Asia-Pacific’ strategy, which is directed at China’s internal affairs, by ‘adding oil and vinegar’ (‘添油加醋’), thereby enabling US to provide an excuse to suppress China’s strategic space as well as providing support to US.”

“Singapore can go and please the Americans, but it needs to do their utmost to avoid harming China’s interests. It needs to be clear and open about its latter attitude,” it cautioned. Singapore’s balancing act should be to help China and US to avoid confrontation as its main objective, and not taking side so as to increase the mistrust between China and US, it said..

The article gave the example of Singapore allowing US to deploy its P-8 reconnaissance aircraft to Singapore, which from the view of the Chinese, increases the tension in South China Sea, and thereby, increasing the mistrust between the 2 big countries.

“Singapore needs more wisdom (‘新加坡需要更多的智慧’),” the article concluded.

PLA General: We must strike back at Singapore

And yesterday, SCMP reported that a PLA General had called for Beijing to impose sanctions and to retaliate against Singapore so as to “pay the price for seriously damaging China’s interests” (http://theindependent.sg/pla-general-we-must-strike-back-at-singapore).

The General’s remarks came after a recent spat between Global Times and Singapore Ambassador Loh. On 21 Sep, Global Times carried an article saying that Singapore had raised the issue of the disputed South China Sea at the Non-Aligned Movement (NAM) Summit held in Venezuela on 18 Sep. It added that Singapore had “insisted” to include an international tribunal’s ruling on the waterway, which was in favour of the Philippines, in the summit’s final document.

Singapore’s ambassador to China, Stanley Loh, rejected this and wrote an open letter stating that the news report was “false and unfounded”. Mr Loh said the move to include the international ruling in NAM’s final document was a collective act by the members of the ASEAN. But the editor-in-chief of Global Times came out to stand by his paper’s report.

Then, the Chinese government also came out in support of Global Times, not buying Ambassador Loh’s arguments. When a Chinese foreign ministry spokesman was asked about the tiff between Global Times and Singapore, he blamed an unspecified “individual nation” for insisting on including South China Sea issues in the NAM document.

Xu Liping, senior researcher on Southeast Asia studies at the Chinese Academy of Social Sciences, said China expected Singapore to be a neutral mediator between China and the countries of Asean, and did not want to see disputes over the South China Sea raised in a multilateral platform like the NAM Summit. And that was why China was so angry over Singapore’s active moves in broaching such a sensitive topic, he said.

“If Singapore does not adjust its policies, I am afraid the bilateral relations will deteriorate,” Xu added. “Singapore should think twice about its security cooperation especially with the United States, and strike a better balance between China and US.”

“2-headed snake”

On Thursday, the overseas edition of People’s Daily also published an online commentary, saying Singapore “has obviously taken sides over South China Sea issues, while emphasising it does not”. In other words, China is accusing the Singapore government of saying one thing but doing another – a hypocrite.

Online, the Chinese netizens condemned Singapore as a “2-headed snake”. One of them wrote:
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(Translation: China should quickly embark on the Kra Canal project and turn Singapore back into a third world country. This is the best present to give to a “2-headed snake”.)

If the Kra Canal truly becomes a reality, ships would certainly consider by-passing the Strait of Malacca and Singapore altogether, making the Singapore’s all-important geographical location redundant. We may truly become a third world country after all.