|The Straits of Malacca have been mentioned and discussed at SP many times. But there is a potential future alternative, that has the potential for changing the world as we know it.
Scenario #2: The Thai Canal
A group of wealthy investors and shipping companies approach the Government of Thailand with a proposal to dig a canal across the Malay Peninsula (the Kra Isthmus).
This idea has been around since at least 1677 (Thai Canal, Kra Canal or Kra Isthmus Canal), but was beyond the capabilities of the day. Further, the British and Thais agreed in 1897 to not build such a canal, in order to protect the regional dominance of Singapore.
Things are different now. The technology to build the canal exists (as proved by the Panama Canal), but there was, and still is, the question of cost; even today, a lot of money will be needed (someone will owe someone else, “big”).
The Strait of Malacca is slowly becoming a risk to all users; it is effectively 800km long with pirates along most of its length, and very narrow and shallow in one place. It is also international water. Ending piracy (indigenous, state-sponsored or other) seems tough.
A canal through exclusively-Thai territory would be about as shallow and not as wide (but perhaps wider; 3 or 4 channels each way), but it would be roughly 800km shorter and well-policed.
The Thai Canal is like the Corinth Canal, not the Panama or Suez canals; the alternatives are either taking the old route (thousands of miles south to the tip of South America or Africa) or unloading the cargo, shipping it across a land route, then reloading it.
Closing the Corinth Canal or the Thai Canal simply diverting ships to the old route; in the case of the Thai canal, diverting to the Strait of Malacca for a cost of 3 or 4 days.
But there are geo-political issues.
China and Japan depend heavily on the Strait of Malacca for trade and energy supply. A new, shorter and more secure route seems quite appealing, but it will be controlled by Thailand.
South Korea probably also has some interest, and the Philippines and Vietnam are also likely to be interested.
Singapore, Malaysia and Indonesia make some money off of shipping. If most of the shipping goes north, they stand to lose some heavy cash. Could Singapore still maintain a sufficiently close standard-of-living, or decay into poverty?
The Thai Canal would be in the southern provinces, where there is a significant (Malay) Muslim population. Malaysia might have a claim to the canal, as the old Srivijaya Empire extended far up the Kra Isthmus, apparently up to what is now Myanmar (this covers all proposed Canal locations).
There is a remote chance that Myannmar will make some claim (if for no other reason, “just because”).
The US is currently Thailand’s best friend, but does not have the same stake in maintaining open shipping lanes.
1. Will Thailand build the canal?
I suspect “no”, but for this scenario, “yes” must be assumed.
2. Will “sides” appear, and who will be on what side?
For example, South Korea and Japan quite probably have almost identical interests in this scenario
3. How stable will the sides be?
For example: China, Malaysia and Indonesia might align, but potentially later Islamic "issues" in Western China, or the treatment of Chinese in Malaysia / Indonesia, will cause a split.
4. What is the potential for conflict, and what types of conflict?
If the conflict consists initially of diplomatic / economic pressure, and perhaps an extended arms buildup, then the USN can do nothing.
The Strait of Malacca might remain physically open, as will the Sunda Strait (if sailing past Krakatoa is no problem), and the other straits to the east, but there is a political issue, as the waters are Indonesian.
Depending on which straits stay open, and depending on any “tolls” or other costs, the threat is more towards profits than national survival.