Geopolitical Report ISSN 2785-2598 Volume 52 Issue 1
Author: Riccardo Rossi
Executive Summary
In 2013, Beijing launched the 21st Century Maritime Silk Road (MSR) project, identifying Thailand as a crucial partner for advancing Chinese interests in the Southeast Asia region. This partnership includes the proposed construction of the Kra Canal, a significant maritime infrastructure initiative designed to connect the Gulf of Thailand to the Andaman Sea.
This project aims to ease the so-called “Malacca Dilemma,” which refers to the People’s Republic of China’s (PRC) excessive dependence on the Straits of Malacca and the Sea Lines of Communication (SLOC). Considering Malacca Strait’s strategic importance, Beijing has sought to enhance its dialogue with Bangkok, which has been a founding member of the Association of Southeast Asia Nations (ASEAN) since 1967.
In this geopolitical context, this report aims to investigate the historical evolution of the Kra Canal, its impact on the economies of South East Asian countries and then identify the geopolitical risks associated with this infrastructure project.
Historical background
The first Kra Canal project dates back to 1677, when Thai King Narai asked the French engineer De Lamar to build a large maritime infrastructure at the Isthmus of Kra to connect the Gulf of Siam to the Andaman Sea. However, lack of adequate technology did not allow De la Mar to fulfil the ruler’s request.
In the following centuries, the canal project increased the Franco-British rivalry in South-East Asia and along the Strait of Malacca, which was the crucial link between the South China Sea (SCS) and the Indian Ocean. The British Empire in the 19th century conducted surveys in the Isthmus of Kra for the construction of a sea channel and a railway to facilitate the transport of goods from India to Chinese ports, but the excessive costs blocked realisation of both projects.
In 1883, Count Mahé de La Bourdonnais proposed to Paris the construction of the Kra Canal to strengthen the French presence in Indochina and challenge British dominance over the Strait of Malacca and the city of Singapore, home to the most important port in South-East Asia. The government rejected the count’s request, favouring British interests.
In the second half of the 20th century, the Kra Canal became a priority again in Bangkok’s infrastructure policies. In 1972, the American company Tippetts-Abbett-McCarthy-Stratton (TAMS) proposed the construction of a 102-km-long sea canal from Satun to Songkhla, allowing a reduction in navigation time between the Indian Ocean and the SCS. Bangkok, however, vetoed the project because of its $5.6 billion cost, 10-12 year construction, and the potential negative impact on the region’s economic and strategic equilibrium.
Over the years, the PRC has increased its influence towards the Thai governments, setting as one of its goals the possibility of building the Kra Canal. Backed by Thailand’s 2015 military junta, the Thai-Chinese Culture and Economic Association supported the Kra Canal project, adopting TAMS’ design and projecting an eight-year, $20 billion cost. That same year, the Asia Union Group and China-Thailand Kra Infrastructure Investment and Development Company agreed to jointly build a canal across the Kra Isthmus.
In today’s geopolitical confrontation in the Asia-Pacific region, the unbuilt Kra Canal remains a significant point of contention between Beijing and Washington in their struggle for dominance in the South China Sea.
Economic Scenario
The 21st Maritime Silk Road’s launch prompted China to view the Kra Canal as Southeast Asia’s most crucial maritime infrastructure, recognising its potential to alter the region’s geopolitical landscape and contest Washington’s control of vital SCS straits—Malacca, Lombok, and Sunda. In particular, the Strait of Malacca in 2023, with a flow of 23.7 million barrels (bpd) of oil, became the most important global chokepoint, surpassing the narrowing of Hormuz, which recorded a crude oil traffic of 20.5 million bpd in the same year.
The construction of the Kra Canal could compromise Malacca’s centrality, which offers three important economic benefits.
- Shortening Distance. The infrastructure might reduce the distance between the Suez Canal and the port of Hong Kong from 6,751 nautical miles (N/miles) on the Malacca Canal to 6,394 N/miles through the Kra Canal. Less distance means faster sailing times, lower fuel use for oil tankers and cargo ships, and ultimately, lower costs for shipping companies. ()
- Increasing Maritime Traffic in Asia-Pacific. The Kra Canal will boost Asia-Pacific maritime traffic, reducing Malacca Strait’s role. China has long viewed this as the key to overcoming its reliance on the Malacca Strait and diversifying its energy supplies.
- Developing Opportunities for ASEAN Countries. In 2014, Hanoi launched The development plan of the Vietnamese shipping industry for 2020 and towards 2030, setting itself four objectives: to develop the shipbuilding industry, build advanced shipbuilding centres, expand the commercial fleet, and enhance the productivity of ports and logistics infrastructure. Beijing’s assessment over the past decade has identified this project and Hanoi’s geo-economic centrality within the SRM as crucial factors in its substantial investment in Vietnam’s green economy, high-tech, automotive, and electronics sectors, resulting in the highest number of projects.
In this context, it is fundamental to underline that some in Thailand’s ruling class recently viewed the Kra Canal as a key economic engine, projecting annual revenues of $280 billion to fund their 20-year National Strategic Plan (2017-2036). Therefore, Bangkok plans to modernise Laem Chabang and Map Ta Phut ports. Hutchison Ports Group plans to modernise Container Terminal D in Laem Chabang, adding 17 quay cranes and 43 rubber-tired gantry cranes to handle approximately 3.4 million TEU annually.
Map Ta Phut Industrial Port in Thailand is the biggest industrial port in the country, housing 12 port operators, with 9 specialised and 3 public ones. Since 2016, it has handled 43 million tonnes of shipments, with gas and oil making up 57% of the total. Bangkok observing the growing volume of business has planned Map Ta Phut Industrial Port Phase 3 Development Project, aimed at two objectives: increasing Thailand’s centrality in the Central Economic Corridor and increasing the port’s operational capacity to 19 million tonnes over the next 20 years.
In recent years, Thailand has also recognised the importance of building a high-speed railway network to connect the country’s various cities and industrial centres, and in 2014 it signed a Memorandum of Understanding with the PRC for the construction of the Nong Khai-Bangkok line, which is expected to be fully operational by 2030. China views the Nong Khai-Bangkok rail link as crucial for integrating Thailand into the Belt and Road Initiative and paving the way for Bangkok’s consideration of the Kra Canal.
Geopolitical Risk
In recent years, Bangkok has opposed the possibility of constructing the Kra sea channel in view of the high construction costs and the geopolitical risks that this work entails for the economic-strategic balance in Southeast Asia.
Two major geopolitical risks stand out. First, shifting maritime routes could challenge the Strait of Malacca and vital sea lanes, while China’s growing influence over ASEAN countries through debt trap diplomacy is also a concern. This doctrine helps struggle and developing nations economically, aiming to influence their development by setting priorities.
A second geopolitical threat arises from China’s efforts to counter the U.S. military presence in the Gulf of Siam and around the Straits of Malacca, Luzon, and Taiwan—key access points connecting the South China Sea to the Pacific and Indian Ocean.
Beijing’s military build-up in these areas is a major step toward increased patrols and raids near the Straits of Malacca and the Gulf of Siam, hindering the U.S. Seventh Fleet’s access to the South China Sea.
*Cover Image: The map of the Kra Canal (Credits: Maximilian Dörrbecker (Chumwa), Public domain, via Wikimedia Commons)
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