Proposed Chinese-funded canal in Cambodia raises regional concerns

FORUM Staff

A proposed Chinese-financed, 180-kilometer canal connecting Phnom Penh with the Gulf of Thailand poses economic, environmental and humanitarian concerns, and has led to speculation that the $1.7 billion Funan Techo Canal could give Chinese military vessels access to interior Cambodia and the Cambodia-Vietnam border.

Cambodians facing potential displacement wonder about compensation. Vietnamese ponder the economic effect of a dredged waterway entirely within Cambodia drawing merchant ships away from the lower Mekong River, Phnom Penh’s current maritime pathway through Vietnam to international waters. With experts predicting the canal would draw water from the Mekong, Vietnamese rice farmers who rely on the river worry about their crops.

The 100-meter-wide, 5.4-meter-deep canal could give Chinese People’s Liberation Army Navy vessels access to inland Cambodian and Vietnamese cities, according to multiple reports. The project’s proposed coastal terminus in Kep is about 100 kilometers from Cambodia’s Ream Naval Base in Sihanoukville, which recently underwent Chinese-funded renovations.

“The Funan Techo Canal is not simply a socio-economic development project but also has great military value and has a strong impact on the defence and security situation of the entire region,” Vietnamese researchers wrote in a March 2024 commentary published by a Vietnam state-backed institute, according to Bloomberg News.

“I’m sure we’re not talking about aircraft carriers,” Brian Eyler, Southeast Asia program director at the Washington, D.C.-based Stimson Center, told Radio Free Asia in January 2024. “But the kind of joint patrol boats that we see on the upper Mekong coming out of China could easily move through that canal.”

The state-controlled China Bridge and Road Corp. would finance and build the canal, then manage and profit from its operation for 50 years, The Straits Times newspaper reported in April 2024. Three dams, 11 bridges and a 208-kilometer sidewalk are planned along the canal’s route between a Mekong River tributary, just below Phnom Penh’s port, and the gulf.

Beijing believes Chinese investment in the project would enhance its influence in Southeast Asia, including as a key economic partner of Phnom Penh, the business news magazine Vietnam Briefing reported in April 2024.

Cambodian Prime Minister Hun Manet has denied the canal would give Chinese warships access to interior regions, saying Cambodia does not allow foreign countries to use its territory as a military base against other countries, the Singaporean news agency CNA reported in April 2024. He also said the canal would be too shallow for warships.

Two Chinese military frigates docked at Ream Naval Base in December 2023, CNN reported, citing photographs on the Cambodian defense minister’s Facebook page. Cambodian authorities said the warships were there to train Cambodian forces, according to the news network.

Manet has assured Vietnamese Prime Minister Pham Minh Chinh that preliminary studies show the canal would have minimal effects on the lower Mekong, The Diplomat magazine reported in January 2024. The two leaders met the previous month in Hanoi.

Manet said the canal will provide water for crops, improve water management during rainy seasons and boost freshwater fishing, among other attributes, Bloomberg News reported in April 2024. It also will create an estimated 1.6 million jobs along its route through the inland provinces of Kampot, Kandal and Takeo, according to The Straits Times.

Observers note a scarcity of details about the project, however. “The Cambodian people — along with people in neighboring countries and the broader region — would benefit from transparency on any major undertaking with potential implications for regional water management, agricultural sustainability, and security,” Wesley Holzer, a public diplomacy officer at the United States embassy in Phnom Penh, told Bloomberg News.

Holzer urged Cambodian officials to “participate fully in any appropriate environmental impact studies to help the MRC [Mekong River Commission] and member countries fully understand, assess, and prepare for any possible impacts of the project,” the news agency reported. The MRC, with representatives from Cambodia, Laos, Thailand and Vietnam, promotes sustainable development of the lower Mekong River Basin.

Heang Nang Eng, 60, a lifelong Kandal resident, wonders where she will go if the canal project destroys her home, the independent Cambodian Journalists Alliance Association reported in March 2024. “Some people have a lot of land, so even if they are affected by this project, they can still move,” she said. “But I don’t have other land.”