China not involved in Kra Canal work

Organisations that inked MOU for project are not linked to Chinese govt
By Teo Cheng Wee, China Correspondent In Beijing, The Straits Times, 20 May 2015

CHINA has denied it is involved in work on the Kra canal, defusing hype over a project that purportedly lets ships bypass the Strait of Malacca and Singapore's port.

There are no plans by the Chinese government to participate, Foreign Ministry spokesman Hong Lei told a regular press briefing yesterday.

This echoed a statement on the same day by the Chinese embassy in Thailand, which said that China has not taken part in any study or cooperation on the matter.

This comes after Chinese media recently reported that China and Thailand had signed a memorandum of understanding (MOU) in Guangzhou to build a US$28 billion (S$37 billion) canal that cuts through the narrow Isthmus of Kra in southern Thailand.

Experts told The Straits Times 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," said Dr Zhao Hong, an expert on China-Asean relations from the Institute of Southeast Asian Studies.

Proponents of the Kra canal had been hopeful that China would lend its economic heft to the project. They believe it can be made part of China's Maritime Silk Road, which aims to facilitate maritime trade across South-east Asia, South Asia and beyond.

Last year, the Kra canal project briefly made news in China when several major Chinese state-owned construction firms, such as Xugong and Liugong, were linked to it. The companies, however, denied involvement.

Dr Zhao feels China might be open to private companies studying the feasibility of such a project, but will not directly back it for now.

Prior to the official denials, reports had said the proposed two-way Kra canal will be 102km long, 400m wide and 25m deep and take 10 years to construct.

Likened to other man-made channels such as the Suez canal, it would allow ships to bypass the congested Malacca Strait and is estimated to cut shipping distance by 1,200km. It is also likely to reduce the number of ships travelling through Singapore, one of the busiest ports in the world.

Little information is available on the China-Thailand Kra Infrastructure Investment and Development, and Asia Union Group, the two organisations involved in the MOU signing. Reports said the Asia Union Group's chairman is former Thai premier Chavalit Yongchaiyudh, a long-time supporter of the Kra canal.

Yesterday, the Chinese embassy in Thailand clarified that the organisations 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 Li Zhenfu from Dalian Maritime University feels that even if the canal is built, the impact on Singapore might be limited.

"Distance is important but ships have to consider services and facilities as well," he told The Straits Times. "The foundation and reputation that Singapore's port has built up cannot be replicated immediately."