According to the data of the U.S. Energy Information Administration, over 30% of maritime crude oil trade passes through the South China Sea. Over 90% of the crude oil arriving in that sea pass through the Strait of Malacca, i.e. the shortest sea route between suppliers in Africa and the Persian Gulf and markets in Asia, thus making it one of the main geographical hubs of black gold in the world.
The key factor is that many raw materials and materials for energy development must pass through this Strait. Currently, the transport of goods between East Asian countries, Europe and Africa must have the Strait of Malacca, controlled by Singapore, as a route – provided it is fast.
On September 24, 2019 Singapore and the United States signed the Protocol amending the 1990 Memorandum of Understanding on the U.S. use of facilities in Singapore.
Singapore had proposed to use U.S. warships, thus becoming the largest U.S. military base in Asia. The U.S. 7th Fleet and its ships, including aircraft carriers and other large vessels, provide logistics and maintenance services and greatly expand military control.
The 7th Fleet can cross the Strait of Malacca, enter the Indian Ocean and the Arabian Sea and reach the Gulf region within 24 hours. The U.S. military vessels in all the ports of the Strait can be used without prior notice. In this regard, the United States is also actively cooperating with Malaysia, the Philippines, Brunei, Thailand and other Southeast Asian countries.
The United States has deployed more advanced weapons and equipment in Singapore. As long as there are military disputes in East and Southeast Asia, the United States will immediately block the Strait of Malacca and hence control the whole crude oil transport system. In case of conflict, the Strait of Malacca could easily be blocked, thus cutting China off from crucial energy resources.
Although the Chinese strategic oil reserves are sent from neighbouring countries, it is difficult to go on for over 60 days with reserves alone. Meanwhile the United States is using the financial market to drastically increase energy prices and possibly start an economic war.
If the Strait of Malacca is blocked, China has not enough energy supplies stored and it can sustain the situation for a very short lapse of time. It should be added that all military operations would be delayed.
Singapore is a country traditionally friendly to the United States. The reason is the same as Japan’s, because the United States has interests in the Far East, while keeping on encircling China, thus trying to break “the string of pearls”.
The United States supports Singapore, which has some influence in Southeast Asia because it has no strong neighbours. With a view to managing maritime transport, the most important thing is to have strong armed forces. Until the country can be conquered by force, the financial and commercial development model leads to a very high success rate.
Singapore has a surface of 721.5 square kilometres only, less than the province of Lodi, Lombardy. Nevertheless, its defence spending is three times that of neighbouring Malaysia, and accounts for about 3.1% of its GDP, which is more or less the same as the Russian military power (3.9%). This is the version of South-East Asia bequeathed by Great Britain, such a close ally of the United States to be considered the fifty-first star on its flag.
If Singapore wants to control its own power in the Strait of Malacca, it must contain and curb China. Without the Strait of Malacca, there would be no maritime centre absorbing the surrounding commercial and financial forces. As long as the deepwater port – where large military and commercial fleets can dock – is well-established, the place of delivery/passage for raw materials in Southeast Asia, from the Near and Middle East, the EU and Africa, will inevitably be Singapore.
This is the reason why – although China also has a huge export market – many of the bulk goods will be waiting in line to pass through Singapore’s “Caudine Forks”.
Since 2015 there has been a plan that could break the balance. The trade route to the Indian Ocean across the Strait of Malacca has problems with pirates, shipwrecks, mist, sediments and shallows. Its accident rate is twice as high as the Suez Canal and four times higher than the Panama Canal.
A shorter alternative route is to build a canal in the isthmus of Kra, Thailand. This would enable to spare time and reduce shipping costs as the route gets 1,000 kilometres shorter. The Chinese state-owned companies Liu Gong Machinery Co. Ltd and XCMG, as well as the private company Sany Heavy Industry Co Ltd, have taken the initiative to create a study group for the construction of the Kra Canal. The 100-kilometre artificial connection with the Indian Ocean would benefit not only China and ASEAN, but also trade of Japan and other countries, including the EU.
Thailand is located at the centre of the Indochina peninsula and leads to the important Mekong region and South Asia. This artificial canal would be about 100 kilometres from the Andaman Sea and the Gulf of Thailand, so that the trade zone of South-East Asia should not pass through the Strait of Malacca.
However, according to a survey made five years ago, only 30% of Thai people was in favour of building the canal and at least 40% of them opposed it, for fear that it could cause political turmoil in Thailand, including environmental damage and corruption by the Thai government. An attempt was being made to convey the feeling that the Thai people were opposed to such initiative.
It is obvious that there are clear opponents: the biggest one is Singapore, of course. At that juncture, maritime trade in East and South-East Asia would leave the polis, which would be bound to lose its importance as a maritime bulwark and could even lose the U.S. protection. Nevertheless, on January 16, 2020, the Thai House of Representatives decided to set up a committee to study the Thai Canal project.
The Kra Canal would be very profitable for China. The countries concerned, namely Cambodia and Vietnam, are still hesitating. Thailand wants China to contribute with money and equipment, but it fears indirect control from China.
The Kra Canal would be controlled by China. Thailand may not operate and run it as planned, but it would reap the greatest benefits from it. Hence although the canal tolls may be much lower than the cost of development, China would still be willing to encourage Thailand to implement the project in view of creating another route bypassing U.S. control. China is also actively encouraging Myanmar to build an oil pipeline connecting Yunnan to Burmese ports.
China is willing to invest significantly and the aim is to bypass U.S. control, which has completely blocked China from the Pacific islands to Southeast Asia.
The energy and food that China needs cannot be self-produced, and the United States is trying to manage these two weaknesses by “moving Singapore on the chessboard”.
After World War II, the United States is the most striking example of “vertical community”, and “horizontal continuum“, to which the principle of “close and remote strike” applies. This refers to the economic power gap, not to kilometres as the crow flies. The U.S. strategy is to establish a long-term objective to prevent competitors from producing and developing cooperation.
The countries that have a large economic power gap vis-à-vis the United States are defined as “far away”, while the others close to the United States in terms of economic power and strength are defined as “near”. As a result, the neighbour always bothers and causes inconvenience in the world as is the case when living in a block of flats.
The U.S. strategy is designed to help and support the weaker side in the economic war – no matter if it is a dictatorship or an obscurantist and reactionary regime -in order to fight the strong side and achieve power supremacy. This balance can effectively prevent the emergence of a hegemonic power directly posing an economic-military threat to the United States. Supporting Singapore, Taiwan and Japan is certainly not an act of humanism and holding on to the “medieval” petromonarchies of the Near East does not mean strengthening the much-vaunted democracy.