A plan for a China-controlled canal through Thailand could change everything about Asia as we know it


Earlier this year China’s National Development Reform Commission announced details of an ambitious regional plan known as the “one belt and one road” initiative.

It consists of two distinct parts: a “silk road economic belt”, the construction of land based infrastructure projects, and a “21st century maritime silk road”, its maritime equivalent.

The joint programs are based on the historic silk road that linked China to the Roman Empire for centuries and designed to boost economic trade flows between Europe, the Middle East and China.

It sounds like a great initiative on the surface. New infrastructure gets built, efficiency is created and economic partnerships are enhanced.

China, of course, would be the major benefactor. But if this project does go ahead under Chinese management — even if it’s at arm’s length from the government through a Chinese company — it has the potential to transform the economic and strategic shape of South-East Asia.

While China will benefit, other nations will lose, particularly those who currently benefit from the status quo.

Tensions across the region are already high thanks to claim and counter-claim for ownership of parts of the South China Sea. Over the past week, there has been increasing talk of a controversial plan to build a canal through Thailand.

The proposed 10-year, $US28 billion development would see a 100 kilometre seaway built at Kra Isthmus, the narrowest point across the Thai Peninsula. If completed, it would be a dual-lane thoroughfare capable of accommodating even the biggest of ships.

The proposed location for the canal is shown below.

Like the one belt and one road program, it sounds like a great idea in principle.

That is, until you look at those nations who would lose out from its construction.

Singapore. Malaysia. Indonesia.

It would effectively eliminate the need for many ships travelling from the Indian Ocean to the South China Sea, and vice versa, to use the the Strait of Malacca.

The economic loss to these nations, particularly Singapore given its strategically-important location at the southern tip of the Malaysia Peninsula, would be vast should the construction go ahead.

While still only in the feasibility stage at present, the controversy over the project is not about whether it will be built, but over who will build it.

There has been speculation that the Chinese government, perhaps as part of its 21st-century maritime silk road initiative, is directly involved in the project.

Hong Lei, spokesperson for China’s Ministry of Foreign Affairs, denied any government involvement earlier this week, stressing that there was no deal in place between the Thai and Chinese governments to undertake the project. Thai officials also hosed down talk that a deal had been struck between the two countries.

Despite the denials, rumours of government involvement persist.

A Hong Kong-based website, the Oriental Daily, reported earlier this week that both nations had signed a memorandum of understanding to construct the project at recent talks held in Guangzhou. On May 20, China’s state-run newspaper the People’s Daily reported that the canal is considered an important part of the government’s one belt and road strategy.

It certainly appears, based on that rhetoric, that the government would like to see construction commence. There’s no evidence of direct government involvement but the nature of big decisions by Chinese companies, all part of a heavily-regulated commercial sector, is naturally raising questions.

What is known at present is this: there’s no certainty that the canal will be built, who will be involved, or who would have control over it.

But the very idea is destabilising. Only yesterday an incident between a US military aircraft and China’s navy reinforced the view that geopolitical tensions across the region are escalating.

Indonesia is a burgeoning democracy. Singapore and Malaysia are on slow but steady journeys to thriving democracies. Thailand, with its wild political swings between democratic and military rule, sits at the very nexus between ex-colonial emerging democracies to its south and what remains of global Communism to its north.

If you haven’t been reading the developments perhaps it’s time you did. Watch this space.

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