China's Demand for Oil May Make Thailand Canal a Reality
Pacific News Service, News Analysis, Franz Schurmann, Posted: Jul 22, 2003
As maritime traffic snarls in a narrow waterway between Malaysia and Indonesia and nearby Islamic fundamentalism looms, giant China wants to build a canal through Thailand as an alternate way to ship oil. It's a development with huge implications for the economies of the region.
The mother of all maritime traffic jams is looming in Asia. Currently 50,000 ships, many of them giant oil tankers, traverse the Malacca Straits between Malaysia and Indonesia each year. Since the 17th century, visionaries have dreamed about finding a shorter route by building a canal through Thailand's narrow-necked Kra isthmus. Now Malacca traffic snarls, changing geopolitics and China's burgeoning thirst for oil might finally make that dream a reality.
Naval experts call the 621-mile Malacca Straits, as narrow as 1.5 miles in some parts, the world's foremost choke-point. With half of its 1.3 billion people now living in industrialized cities and towns, China's need for Middle Eastern oil could clog the straits by adding thousands of tankers to the traffic. Already, 80 percent of the oil that fuels economic superpower Japan comes through the Malacca Straits.
What has moved the Chinese into shooting for the Kra canal are their dashed hopes for getting Russian and Central Asian oil and natural gas through a multi-billion dollar pipeline. China and Russia are good friends, but both the Chinese government and some big American oil companies tripped up on Russian corruption and in-house rivalries. The Enron-like mess of the Russian energy industry threw a monkey wrench into Chinese economic expansion. Now they are looking southward instead.
Articles have already appeared in China with headings entitled "Abandon the Malacca Straits and build the Thai Kra Canal." And a subtitle says, "This is shaking Southern Asia." Southern Asia, in Chinese eyes, includes all the countries from Southeast Asia through South Asia and Southwest Asia (aka the Middle East). Countries along the Malacca Straits like Singapore and Indonesia are understandably nervous that if the Kra canal becomes the shortest route from Europe and the Middle East to North Asia, their economies will be devastated.
These Chinese analysts as well as others point out that a shorter route will save time and money. But an unspoken reason for the bypass is that Indonesia's turbulent Aceh region has long shores along the Malacca Straits. And the turbulence has roots in Islamic fundamentalism. If the Aceh fundamentalists should gain power, then the whole Malacca Straits could be too risky as the sole lifeline to East Asia's economic powerhouses.
No wonder the Kra canal is a hot topic within ASEAN, or the Association of South East Asian Nations. ASEAN was formed in 1962 as a bulwark against Communist expansionism, especially by China and North Vietnam. Now Communist Vietnam is a full member. And Communist China along with Japan, South Korea and the United States are members of two auxiliary groups of "advisers."
ASEAN+1 (U.S.A) provides the military backup that is now focused on the War on Terror. ASEAN+3 (China, Japan and South Korea) provides the economic backup. On the War on Terror front, ASEAN has already pitched in with Japan, sending a thousand troops to Iraq. On the economic side, the Kra canal will be a monumental undertaking.
The powers that hold the keys as to whether this canal will see the light of day or not are the United States, Japan and China. And if they agree to go ahead, the actual builder will be China.
Chinese analysts have already calculated that the project could begin in 2005 and be completed 10 years later. It would employ a work force of 30,000. The rock-bottom cost will at least be US$20-$25 billion.
As the world's greatest builder of huge water works, China is well qualified to embark on a mammoth project like the Kra canal. The Three Gorges dam is now operational. China is also building the world's longest bridge, connecting Shanghai over a hundred miles of water with rapidly developing Ningbo. China has been carrying out construction projects in Eastern Africa, especially the Sudan, where they have been building oil infrastructure that American corporations will use when they finally swarm in.
The Kra canal, if it comes into being, will be a technological marvel like its sisters, the Suez and Panama canals. Ancient Romans had already envisaged the Suez Canal, which finally came into being in the 19th century. Europeans and Americans planned for the Panama Canal, which came about early in the 20th century. As early as the 17th century, Thai rulers brought in French experts to see whether it was possible to build a canal between the Gulf of Siam and the Andaman Sea, going through the Kra Isthmus.
What might finally make the canal real is the thirst for a dependable oil supply in one of the world's most booming economies.
PNS Editor Franz Schurmann (fschurmann@pacificnews.org) is emeritus professor of history and sociology at U.C. Berkeley and author of numerous books.
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