Friday, December 15, 2017

Investment News and Commentary from Emerging Markets in Asia - China, India and ASEAN

About discusses business and investment news rising from the geopolitical relations of China and India, and the interactions these two countries have with the rest of emerging Asia.

Kra Canal Indian Ocean / South China Sea Project To Be Re-Visited

The Kra Canal Project, which would link the South China Sea directly to the Indian Ocean by cutting across the Thai isthmus, has shown recent signs of being reactivated given the economic benefits it would bring to the region as well as the continuing problems with piracy in the Straits of Malacca and the current route for trade to and from India and South–East Asia to China.

The canal, which was first recognized as a potential for boosting trade in 1677, would have the same impact on South-East Asia as the Panama and Suez Canals have had elsewhere. The canal would need to traverse a length of only 44 kilometers at the narrowest point of the Thai peninsula, however with rocky land of up to 75 meters above sea level; the engineering and labor requirements would be huge.

China, not surprisingly, has offered to lend considerable assistance to the development of the project, which was tentatively approved by the Thai Senate in 2007. The project is currently stalled due to “environmental concerns”, however, this is largely interpreted as meaning political wrangling over the project, which has plenty of detractors. Two major voices of dissent are the Singapore Government, who would stand to lose their preeminent position as a shipping hub for South-East Asia, and the previous Bush administration in the United States, who’s then Defense Secretary Donald Rumsfeld showed concern about the plan amidst growing concern of developing Chinese influence in the region.

The cost of the project is estimated at US$20 billion, and would take ten years to complete, with some 30,000 workers being involved. The project would also compliment the Highway 44 overland route, which links the West and East coasts of Thailand, and has currently been stalled with some 50 kilometers to go at either end – a victim of the recent political turmoil in Thailand. However, with domestic politics apparently heading for smoother waters and the previous Bush regime now out of the way, the Kra Canal project is certain to come back into public view, and with South-East nations keen to develop trade with China, the project looks certain to come back to the drawing board.

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One Response to Kra Canal Indian Ocean / South China Sea Project To Be Re-Visited

  1. China must show statesmanship in helping this project along with land corridor from India to Myanmar through Bangladesh

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