Kra Canal: White Elephant or Dragon’s Web

Anindita Mahapatra
November 29th, 2020


Image Courtesy: Nikkei Asia

The idea of constructing a canal in Kra Isthmus of Thailand is centuries old. The canal is yet to be built, but the idea has not died down.  

There has been an ongoing dilemma for over five years regarding China’s attempt to create an alternative canal with the help of Thailand as a bypass to void one of the busiest shipping lanes in the world between the Indian and the Pacific Ocean, known as the Strait of Malacca. 

This alternative maritime route is meant to cross Southern Thailand by creating a connection between the South Chinese Sea and the Gulf of Thailand so that entering the Andaman Sea is possible without passing through the Malacca Strait. It is also referred to as the Kra Canal. The goal of this ambitious proposal is to ultimately improve the conditions of transport facilities and smoothen trading activities by shortening the shipping distance by 1200 Nautical Miles and avoiding the ‘strategic chokepoint’ of Malacca Strait. 

The building of this canal was first debated in the 17th century by politicians and journalists. However, in the 19th century, the Thai Royalty recognized it as a strategic route to counter invaders. During the rule of King Chulalongkorn (1868-1990), the French Government attempted to construct the Kra Canal and sent Ferdinand de Lesseps, the engineer believed to have played the crucial role in the construction of the famous Suez Canal, which connects the Mediterranean Sea to the Red Sea by an artificial sea-level waterway in Egypt. However, the Thai king is believed to have come under pressure of the British Government and declined French offer to please the British. 

In the post-Second World war era, in the year 1946, an Anglo-Thai Treaty was signed which aimed at ensuring international political stability and significantly it also sought to prevent the construction of the canal. In the 1980s, based on an American-led Executive Intelligence Report, the Fusion Energy Foundation started a conversation on the need to build such a canal yet again. It was argued that it would bring considerable economic benefits in the emerging globalized and industrialized world. The discussion continued for a long time. However, the Asian Financial Crisis that struck the emerging economies of the Asia-Pacific in 1997 had a cascading effect on many tiger economies on the continent and silenced any further conversation on the Kra canal. 

In the meantime, the consistently expanding Chinese economy led to speculations that China would aspire to construct this canal to have control over its maritime trade. In May of 2015, there were speculations and media reports that China and Thailand actually signed an agreement to build the canal, but this report was denied and promptly rejected by the governments of both the countries. 

Despite the denial, China appeared to have continued interest in the canal project. It’s Belt and Road Initiative and 21st Century Maritime Silk Road project kept alive the dream to build this canal. China recognizes the Kra canal as a crucial asset and pursues the construction of it in collaboration with Thailand. 

The recent trade conflicts between the US and China perhaps keeps the Chinese goal intact. Recently, China succeeded in leading the establishment of RCEP or Regional Comprehensive Economic Partnership with 14 other countries. This success may have encouraged China to go ahead with its strategic plan to build the Kra canal. After all, it will further strengthen China’s control, power and influence over the larger region.

Thai experts are very much aware of the environmental cost of any construction of a canal in the Gulf of Thailand. It will affect marine life. But China has deeper economic relations with Thailand. It is a large investor and trade partner of Thailand. China’s recent successes in its aggressive policies embolden China to pressure the Thai Government and move ahead with this project. 

Indian analysts think that Kra Canal will become a “White Elephant” project. Economists fear that Thailand may land up in a “debt trap” like a few other countries, such as Sri Lanka. That means it will not be a profitable business to build and operate this canal. Environmentalists also oppose it. Reports suggest that it may impact the tourism industry in Thailand as well. 

If China succeeds in building this canal, it will further enhance its influence in the region. It will make China more aggressive in the future. According to foreign policy analysts, the United States has not succeeded in checking China’s rise as a power. America’s friends in Asia are now looking at China as an economic partner. 

If Indian analysis is proven correct, there will be a costly “White Elephant” administered by China in the Gulf of Thailand. If China’s goal of constructing an alternative maritime trade route and resolving the “Malacca Dilemma” succeeds, it will be the expansion of the “Dragon’s Web” in the region. 


***The author is an intern in KIIPS and a student of Journalism and Mass Communication in Sharda University*