Quora Answer: What Will Singapore be Like since China is Planning to Dig a New Canal across Malaysia?

The following is my answer to a Quora question: “What will Singapore be like as China is planning to dig a new canal across Malaysia?”

China is not planning to dig any canal across Malaysia.  There has been talk of a canal across the Malay Peninsula, but up north, in Thailand.  As I have answered in another post on the possible ramifications of the Kra Canal, if it even takes off, it would take decades for the effects to be felt by Singapore.

Firstly, there are strategic interests against such a canal simply because China would have a controlling stake, since Thailand does not have the sort of finances to undertake such a large infrastructure project.  There is the environmental impact study, there is the geopolitical split of Thailand between the Buddhist north and Muslim south, there is the negative consequences on Thai sovereignty.  All these need to be resolved even before the canal is dug.

Secondly, construction is going to take decades, and there will be a negative impact in the immediate vicinity of the canal construction site.  Villages need to be moved, hills need to be levelled, rivers need to be redirected.  There will be a lot of internal political opposition, and a rise in Sinophobia.

Thirdly, once built, the canal might not even be that useful.  For it to service the supertankers and the largest container vessels, it either cannot have locks, or locks that are extremely large.  There will be a cost to use the canal to pay back the cost of construction.  All those bonds issued have to be serviced.

The Suez Canal and the Panama Canal bisect entire continents, saving thousands of nautical miles in fuel cost.  The Kra Canal only shaves off 2,000 or so nautical miles.  Ships drop off and pick up cargo at Singapore.  Singapore is connected by sea and air to an extensive logistics network.  To be attractive, there needs to be ports at both ends of the canal to service vessels for other needs, as well as an air hub.

In the meantime, I do not see Singapore standing still, waiting to be surpassed.  Whilst it became a shipping hub due to its strategic position, it became a premier shipping hub and the busiest port in the world by tonnage by its value add.  It is service excellence, innovation and position that contributed to its rise.  Singapore is also one of the financial centres of the world.  And shipping needs that sort of bank support.  This sort of convenience cannot be replicated by merely building a canal.