Chinas Oil Canal Project in Thailand

posted by ewing2001 on Thursday July 24, @07:27AM

China's Demand for Oil May Make Thailand Canal a Reality

Pacific News Service - 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.

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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.

Free Tibet mainly lobbies for independence for Tibet, a Buddhist theocracy until 1951 when Communist Chinese troops marched in, but the group has also pressured oil giants to avoid the pipeline.

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