Key Judgments

The construction of Cambodia's China-funded Funan Techo canal, which began on August 5, 2024, is expected to significantly strain regional relations, particularly with Vietnam, and pose serious environmental risks. The project underscores China's growing influence in Cambodia, which may alter regional power dynamics and provoke geopolitical tensions.

Supporting Evidence

The $1.7 billion, 180-kilometer canal will connect Phnom Penh to the Gulf of Thailand through Kep province, aiming to reduce Cambodia's reliance on Vietnamese ports and lower shipping costs to Sihanoukville. Despite these economic benefits, the project has raised substantial environmental concerns, particularly regarding its impact on the Mekong River, a crucial resource for millions across six countries, including Vietnam​ (The Diplomat)​​ (Lowy Institute)​.

Vietnam has expressed worries about the canal's potential to disrupt the flow of water to the Mekong Delta, which is vital for its rice production. This region accounts for 90% of Vietnam's rice exports, and any alteration in water flow could severely affect agricultural output and food security. Although Vietnam has requested detailed information and collaborative assessments from Cambodia, Phnom Penh has largely dismissed these concerns and remains committed to completing the canal “no matter the cost”​ (The Diplomat)​​ (Lowy Institute)​.

The project also highlights Cambodia's strategic alignment with China, as it is part of Beijing’s Belt and Road Initiative (BRI). The involvement of the Chinese state-owned China Road and Bridge Corporation (CRBC) in building the canal further exemplifies this relationship. This alignment has geopolitical implications, as it may lead to increased Chinese military presence in Cambodia, particularly through dual-use infrastructure that could serve both civilian and military purposes​ (The Diplomat)​​ (Phys.org)​.

Implications

The canal project is likely to exacerbate tensions between Cambodia and Vietnam, potentially leading to diplomatic and economic repercussions. Vietnam's concerns about water security and the potential for Chinese military use of the canal could prompt Hanoi to strengthen its regional alliances and increase its military readiness.

Environmental impacts, such as changes in water flow and ecosystem disruptions, could lead to long-term ecological damage, affecting biodiversity and agriculture in the Mekong Delta. These environmental risks may also spark regional advocacy and international pressure on Cambodia to reconsider the canal’s construction.

Recommendations

1. Promote Regional Dialogue: Encourage ongoing diplomatic discussions between Cambodia and Vietnam to address environmental and security concerns. This includes engaging with regional bodies like the Mekong River Commission to ensure collaborative management of shared water resources.

2. Conduct Comprehensive Environmental Assessments: Ensure thorough environmental impact assessments are conducted and made public. Engage independent experts to evaluate the potential ecological consequences and propose mitigation strategies.

3. Monitor and Regulate Foreign Influence: Strengthen oversight of foreign investments in strategic infrastructure to balance economic benefits with national security concerns. This includes ensuring transparency and accountability in projects funded by foreign entities.

4. Enhance Regional Security Cooperation: Foster closer security cooperation among ASEAN member states to address potential military implications of the canal and other strategic projects. This includes joint maritime patrols and intelligence sharing to monitor activities in the region.

5. Invest in Sustainable Development: Encourage Cambodia to invest in sustainable infrastructure projects that minimize environmental impacts and promote long-term economic resilience. International financial institutions and development agencies can support these efforts through grants and low-interest loans.