Chinese and Thai governments have both recently denied media reports that they have signed a deal to build a canal across Kra Isthmus in Southern Thailand which will bypass the Straits of Malacca and shorten travel by 1,200kms and up to five days of travel time between the Indian Ocean and the Pacific. Media reports initially surfaced after a Chinese language newspaper based in Hong Kong published alleged details of the proposed canal. It alleged that the canal is planned to be 102kms long, 400m wide and 25m deep. Construction would take 10 years at an estimated cost of USD28 billion. Following the report, talk was abuzz among analysts that the Kra Canal would affect Singapore’s status as an economic powerhouse in Southeast Asia and divert that power away to Thailand. Further, with declining transit through the Straits of Malacca, the other obvious casualty would be Malaysia.
