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Election Watch


Sin Chew Daily
October 6, 2015

By YC Yap









Rail link connecting China and ASEAN

In the 1950s, the United Nation Asia Pacific Economic Council proposed the Pan-Asia Railroad Plan to build a railroad system which span across the Eurasia continent and Africa. But the plan came to an abrupt halt due to the Cold War. However, since 2009 the southern pathway "Kunming- Singapore Railroad" has regained attention due to China's Belt and Road Initiative, High-Speed Rail Diplomacy, as well as the calls for greater ASEAN regional integration.

Malaysia as the chair of ASEAN 2015 should be leading ASEAN to achieve regional integration before 2016. In the ASEAN Connectivity Master Plan, the “K-S Railroad” has been listed as one of the priority projects that span across the Indochina region, reaching southern parts of China. The railroad will begin from Kunming, China heading towards Vietnam, Cambodia, Laos, and Myanmar. The different railroads will meet at Bangkok then go Kuala Lumpur before reaching Singapore. China has already begun bilateral talks individually with Thailand and Laos for the railroad to link their countries and has been very proactive in bidding for the Singapore-Malaysia High-Speed Rail Project. High-Speed Rail diplomacy in the Pan-Asia Railroad is a crucial element in China’s strategy of opening up markets in Southeast Asia and South Asia, while at the same time supporting the ASEAN Connectivity Master Plan.

China’s railroad technology and capital imports will accelerate the realisation of the K-S Railroad which may contribute to the ASEAN integration process. It is uncertain whether or not the K-S Railroad will affect the main business ports, though members of the academia believe that the railroad, which begins from Kunming, will cause a separation between the inland nations of the Southeast Asia region and coastal nations Southeast Asia region.

The relatively more developed countries in ASEAN rely on ports and the maritime economy, while landlocked-countries in the region lack of such infrastructure, putting them at a disadvantage in terms of shared development. Therefore, the development of ASEAN countries does not have the same level of parity. For the countries lacking of industrial infrastructure, particularly Laos, Myanmar, and Cambodia, the "K-S Railroad" is an opportunity for development. These countries are rich in natural and mineral resources, which could potentially give them leverage in attracting more FDI. The railroad connecting ASEAN and China will open up the resource supply-chain and at the same time upgrade the inland regional economy and industrial structure, closing the gap of wealth disparity among ASEAN countries. A railroad infrastructure connecting each country is a precondition for regional FTA and a unified customs policy.

Huge basic infrastructure projects are risky for poor developing countries. Laos has mortgaged its mineral resources and taken a loan worth £4.5 billion to build the railroad. The total debt is around 90% of its annual GDP, making Laos the fourth largest indebted country in the world while China will need to bear some risk as well. Fast paced developments can be a double-edged sword.

If China can connect to ASEAN via a land route and conduct trade & goods transhipment, it will benefit the economic development of the southern part of inland China. China can further open up the market along the Greater Mekong River Sub-region Economic Corridor and the Myanmar- Bangladesh- India Economic Corridor. In 2014, China’s railroad equipment exports have reached 3,840 million Renminbi. It is a huge business opportunity for China to export railroad equipment while participating in the construction of the ASEAN railroad.

China High-Speed Railway Diplomacy could be a strategy to counter US maritime supremacy and pivot to Asia. According to a geopolitical theory by Halford John Mackinder, railroads are an important factor for a strong nation to assert power through "land power" to dilute “maritime power” of their counterparts in the region. Perhaps China’s participation in railroad building is not only intending to enhance her soft power, but also a strategic measure to promote its hard power in the region. In short, China and ASEAN has become interdependent on each other, both in economic aspects and strategic aspects. The "Kunming-Singapore Rail Link" is just one part in the bigger picture of the realisation of ASEAN integration and the Belt and Road initiative.

View the original article on Sin Chew Daily.

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