China’s lack of clear commitment could jeopardise the entire plan, given uncertainty over the project’s costs, its environmental impact and financial viability, experts, officials and diplomats say.
It also underscores how Beijing is drastically downsizing its overseas investments as its domestic economy struggles, even in countries it considers strategic partners, such as Cambodia.
Once a prime example for Western-backed “nation-building” after the long civil war that followed the fall of the Khmer Rouge regime, Cambodia has in recent times been widely seen by diplomats and foreign policy experts as a Chinese client state, owing to Beijing more than one-third of its total state debt.
But Chinese investment in the Southeast Asian nation is now plunging, after a series of unsuccessful infrastructure projects, amid concerns over criminal gangs targeting Chinese nationals, and dropping tourist numbers.
DIFFERING NARRATIVES
The 180km canal would greatly expand an existing waterway and divert water from the fragile rice-growing Mekong Delta to the Gulf of Thailand, cutting Cambodian shipping through Vietnamese ports.
In the months after the Cambodian government signed an “investment framework agreement” in October 2023 with China Road and Bridge Corporation (CRBC), a state-owned construction company, Cambodian officials went public about China’s financial involvement. The text of the deal is not public.
In an interview with Reuters in May, the minister in charge of the project, Deputy Prime Minister Sun Chanthol, said CRBC would develop the canal and “totally” cover its costs, getting a multi-decade concession in return.
But at the August groundbreaking, the prime minister put CRBC’s share in the project at 49 per cent, with the remainder covered by Cambodian companies.
The same day, his father and Cambodia’s decades-long leader Hun Sen posted a statement on Facebook calling on Japan to invest in the canal.
China’s official Xinhua News Agency did not mention any Chinese involvement in its report about the groundbreaking.
A few days later, a communications officer for Sun Chanthol told Reuters that ownership for the canal’s section to be developed together with CRBC remained “to be determined”.
When asked about Cambodian assertions that CRBC would have a 49 per cent stake, an official for the company told Reuters in mid-October the figures circulating publicly were not definitive.
“It’s very complicated,” said the official, who did not elaborate.
