Recently, the Sino-Thai Joint Committee on Railway Cooperation held a meeting in Beijing, which was attended by Thailand's Deputy Prime Minister and Minister of Transport, Surya. At the same time, the Ministry of Communications of China and Thailand held talks on the specific contents of the first and second phases of the China-Thailand railway project.
During the talks, Thailand even hosted a roadshow for the Thailand Kra Land Bridge project, which attracted the participation of more than 30 Chinese companies. It is understood that in this roadshow, the Thai side revealed that the total investment of the Kralu Bridge project in the south reached 28 billion US dollars. The project is planned to be carried out through a PPP model, with the private sector receiving a 50-year concession.
So what is the value of the Kra Isthmus, which is close to Thailand's heart? Can it help the mainland break through the predicament of Malacca?
Thailand has always wanted to open up the Kra Isthmus
Thailand, located in the heart of the Indochina Peninsula in Southeast Asia, has a total territory of about 513,000 square kilometers, surrounded by Myanmar, Laos, Cambodia and Malaysia. Thailand's geographical location determines its importance in Southeast Asia, with easy access to the Pacific and Indian Oceans, as well as inland access to neighbouring countries.
According to the latest statistics, the total population of Thailand is about 70 million, of which more than 90% are Thai, followed by Chinese, Malays, Laotians, Khmers and other ethnic minorities. The Tai make up the vast majority of the population and are scattered throughout the country, with a particular concentration in the central and northern regions.
The Chinese are one of Thailand's most influential minorities and currently make up about 14% of the country's population. Mainly concentrated in big cities such as Bangkok, they have made outstanding contributions to the business and economic fields of Thailand, and many well-known enterprises and businesses have been established by the Chinese.
The Malays, mainly in southern Thailand, near the Malaysian border, retain a unique religious belief and cultural tradition, with Islam as the dominant religion.
The Laotians and Khmers are mainly found in the eastern and northeastern parts of Thailand, bordering Laos and Cambodia, and their way of life and cultural practices are closer to those of the main ethnic groups of neighboring countries.
Thailand's population is younger, with about 60% of the population under the age of 30. The population growth rate has remained relatively stable at around 1%. With the development of the economy and the acceleration of urbanization, more and more people from rural areas are moving to cities.
In particular, Bangkok and its surrounding areas are experiencing an increasing level of urbanization of the population. However, Thailand's economic development is not satisfactory and still faces many challenges and difficulties.
Thailand is a typical agricultural country. According to 2019 data, Thailand's agricultural output is about $45 billion, accounting for eight percent of its GDP. This proportion is quite high among Southeast Asian countries.
It is important to know that the agricultural industry itself has great limitations. The low degree of mechanization of modern agriculture, the low efficiency of resource utilization, and the low added value of products have led to the slow growth of farmers' incomes and the difficulty of improving their living standards.
In previous years, Thailand has also opened the door to finance through tourism. With its unique cultural heritage and numerous natural and historical attractions, Thailand's tourism industry has quickly risen to become one of the pillars of the country's economy.
Bangkok, Phuket, Chiang Mai and other places attract a large number of tourists every year, promoting the development of related industries such as hotels, restaurants, transportation, etc., and creating a large number of jobs.
However, the economic structure is too homogeneous and the industrial base is weak, which makes it difficult for Thailand to have sufficient resilience in the global economic changes. Although the tourism industry contributes a large amount of income, it is greatly affected by changes in the external environment.
For example, after the outbreak of the pandemic, the global tourism industry almost came to a standstill, and Thailand's economy suffered a huge blow as a result. The number of tourists has plummeted, the related services sector has shrunk sharply, a large number of workers have lost their jobs, and the overall Thai economy has been in turmoil.
In order to strengthen its resilience to risks, Thailand has been looking for solutions. Among them, the opening of the Kra Isthmus project has become a goal in Thailand's heart. The Kra Isthmus is located in the southern part of Thailand, and to its east is Chumphon Province, facing the Gulf of Thailand. To the west of the isthmus is Ranong, facing the Andaman Sea. The narrowest point is about 56 km.
If a canal can be built on the Kra Isthmus, it will not only shorten the global shipping routes, promote regional economic cooperation and communication, but also bring huge economic benefits to Thailand.
Kra Isthmus Project, Thailand
In fact, as early as the end of the 17th century, the Kra Isthmus attracted the attention of European explorers. Since then, discussions have begun about digging a canal here. Especially after the British and French colonial powers gradually expanded their influence in Southeast Asia, the strategic value of this project became even more important.
Many monarchs in Thailand's history considered the possibility of digging the Kra Isthmus, but due to the technical and economic constraints of the time, this dream was never realized. At the end of the 19th century, when Thailand was at the height of its modernization, King Rama V (Chulalongkorn the Great) was inspired by the onslaught of Western civilization and was eager to elevate the country's international standing through majestic projects.
After King Rama V succeeded to the throne in 1868, he began to vigorously promote the modernization of Thailand. He visited many European and American countries, including Britain and France, and saw the advanced technology and prosperous economy of the West. Upon his return, he embarked on a series of infrastructure improvement projects, including the project for the Kra Isthmus Canal.
However, the engineering and funding required was far beyond Thailand's ability to afford it, and the project was never launched.
Coupled with the unique shape of Thailand's territory, they are concerned that the canal could divide the country in two, making it more difficult to manage the northern and southern regions. At the same time, once the Kra Isthmus is opened, it will attract a large number of immigrants, and the situation in southern Thailand is no longer stable.
The relationship between the predominantly Muslim population of the region and the predominantly Thai ethnic group in northern Thailand is already fragile. Therefore, the Thai side has been considering these potential risks.
In August 2023, Saita became the Prime Minister of Thailand and went to China in October to attend the 3rd Belt and Road Forum for International Cooperation. During the event, Saita held a discussion with Chinese companies and again mentioned the Kra Isthmus project, but this time the focus shifted from the Kra Canal to the Kra Land Bridge.
This project can be seen as a simplified version of the Kra Canal. Unlike the Kra Canal, the project does not require Thailand to be cut in half, but instead to build a port at each end of the country, connected by roads, railways and bridges, thus creating a transportation corridor connecting the Indian and Pacific Oceans.
Does the Kralu Bridge Really Work?
Let's talk about the operation mode of the Kra Land Bridge, the first is to unload the cargo on the ship, load it onto the train and transport it across the land bridge, and then reload it at the other end. However, the actual operation of this process is not so simple. From a time and cost perspective, double loading and unloading can be more troublesome.
And a large container ship with a full load takes several hours to complete the process of docking, unloading, and reloading. In the case of the Kralu Bridge, this process requires unloading from the ship to the train, from which it is loaded back into another ship, which is extremely time-consuming.
In contrast, the Strait of Malacca is narrow and cloggable, but ships do not need to be loaded and unloaded on the way, and can simply pass through the strait. Even taking into account the timing of the blockage of the strait, the passage time of the Strait of Malacca is clearly more advantageous.
In addition, the loading and unloading process involves a lot of human and material resources. Despite the advanced modern port machinery, double loading and unloading means more equipment, more labor, and higher maintenance costs.
In addition, although train transportation can save fuel costs to a certain extent, the initial construction and maintenance costs of rail transportation are by no means low. Overall, it is doubtful whether the Kralu Bridge will be competitive in terms of total cost.
Another significant issue is the balance between vehicles and vessels. A train can typically carry only about 100 TEUs, while today's large container ships can carry 1-20,000 TEUs. Take the world's largest container ship, for example, which can carry 24,000 TEUs.
This means that a large ship needs 100 to 200 trains to transfer its cargo based on 100 TEU trains. It is difficult to achieve efficient connection of carrying capacity of this scale.
In addition, a multi-purpose cargo ship carries a wide variety of cargo, including iron ore, coal, heavy equipment, and more. Different cargoes have different requirements for handling, transportation, for example, the unloading of iron ore and coal requires special equipment and facilities, and how to efficiently transfer these facilities between trains and ships is a huge technical challenge. This not only increases the complexity of the operation, but also further increases the cost and time cost.
At present, the Kralu Bridge requires huge infrastructure investment and faces a variety of technical challenges in actual operation. And, even if all of these issues are addressed, it remains to be seen whether the time and cost savings will be sufficient to cover the initial investment and become competitive in the long term. As far as the mainland is concerned, it is just one more sea route. To be honest, it doesn't seem to make much sense.
Therefore, I am not very optimistic about this Kralu Bridge project.
To solve the dilemma of Malacca, the future can be pinned on the China-Pakistan Economic Corridor
The China-Pakistan Economic Corridor (CPEC) connects Kashgar in China's Xinjiang province with the Gwadar port in Pakistan and is about 3,000 kilometers long. The corridor covers the construction of roads, railways, pipelines, power infrastructure, and dozens of special economic zones. As an important part of the Belt and Road Initiative, the China-Pakistan Economic Corridor (CPEC) not only aims to enhance trade and investment between the two countries, but also promotes regional economic integration.
The Strait of Malacca is known as one of the world's most important shipping lanes, with about half of the world's oil traffic and one-third of the world's seaborne cargo passing through the strait each year. However, the security of the Strait of Malacca has always been a headache.
A variety of risk factors, such as piracy and geopolitical frictions, increase the cost and uncertainty of transportation through the strait. Therefore, the China-Pakistan Economic Corridor (CPEC) is a land transportation hub, which can not only reduce dependence on the Strait of Malacca, but also alleviate the risk of traffic paralysis caused by the blockage of the Strait to a certain extent.
The construction of the China-Pakistan Economic Corridor (CPEC) covers a wide range of sectors, with energy projects being one of its core components. For example, the Kata Sahes hydropower plant, the Thar coalfield development plan, and several wind and solar power projects, including the laying of oil and gas pipelines, which will run from the port of Gwadar directly to western China. Compared with transportation through the Strait of Malacca, this new energy corridor is undoubtedly more stable and convenient.
The completion of the Karakoram Highway reconstruction and expansion project, which has not only greatly shortened the travel time between the two places, but also enhanced regional connectivity. No matter how you look at it, it is stronger than the Kralu Bridge.
epilogue
In the future, with the continuous advancement and improvement of the China-Pakistan Economic Corridor, we have reason to believe that this path of friendship and cooperation will not only benefit the people of the two countries, but also occupy an important position in the world economic pattern and make positive contributions to the innovation and development of the global economy.