Why It Matters

China factor in shipping routes

Malaysia's East Coast Rail Link (ECRL) has long been championed by Prime Minister Najib Razak as a "game-changer" for the economy.

But up until the ground-breaking ceremony last week, this was predicated on its projected effect in linking up the Klang Valley with the underdeveloped eastern states of Pahang, Terengganu and Kelantan.

Now, Datuk Seri Najib is calling the RM55 billion (S$17.5 billion) ECRL project to be built and financed by China "an alternative trade route" for those navigating the busy Strait of Malacca via Singapore.

The 688km track connects the ports of Klang in the west and Kuantan in the east, giving Malaysia a land bridge that hastens the transport of goods between the Pacific and Indian Oceans.

It will be completed only in 2024, and hit a projected 53 million tonnes of cargo per annum in 2030, or less than 10 per cent of what the Port of Singapore handled last year.

Nevertheless, it signals Malaysia's - and also China's - intention to reduce their reliance on Singapore as a key logistics hub for the region.

Analysts say the swift progress of the ECRL shows China's determination to "keep all options open".

But this is not an "either-or" situation.

Beijing could very well push forward on all its planned solutions to reduce the country's reliance on the Strait of Malacca, or its so-called "Malacca Dilemma".

These include building other ports, rail lines and even gas pipelines facing the Indian Ocean from Thailand to Myanmar, across South Asia and even Eastern Europe.

The combined impact of the moves could deal a heavy blow to Singapore's own ongoing port expansion.

A version of this article appeared in the print edition of The Straits Times on August 14, 2017, with the headline 'China factor in shipping routes'. Print Edition | Subscribe