"Why Is China Investing In a $1.7 Billion Canal in Cambodia?" - by CWP alum Zongyuan Zoe Liu

At the groundbreaking of the Funan Techo Canal (FTC) this past August, Cambodian Prime Minister Hun Manet hailed the project as a “symbol of patriotism and national unity.” Cambodia hopes that the canal, funded 51 percent by Cambodia and 49 percent by China, can boost its trade by connecting to deep-water ports along Cambodia’s coastline—some, such as the Sihanoukville port, also funded by China—thus reducing reliance on Vietnam. The $1.7 billion project is over 5 percent of Cambodia’s GDP in 2023 ($31.77 billion, according to the World Bank).

Foreign observers see the FTC as a testament to China’s pervasive and growing influence in Cambodia. Cambodia’s neighbors, like Vietnam, are concerned about its potential negative impacts on the Mekong Delta, a major rice-growing region, and its potential military use, echoing the controversy surrounding the Ream Naval Base upgrade.

Blog Post by Zongyuan Zoe Liu and Nadia Clark - September 30, 2024 10:19 pm (EST)

Zongyuan Zoe Liu is Maurice R. Greenberg senior fellow for China studies at the Council on Foreign Relations (CFR). Her work focuses on international political economy, global financial markets, sovereign wealth funds, supply chains of critical minerals, development finance, emerging markets, energy and climate change policy, and East Asia-Middle East relations. Dr. Liu’s regional expertise is in East Asia, specifically China and Japan, and the Middle East, specifically Gulf Cooperation Council countries. Dr. Liu is the author of Can BRICS De-dollarize the Global Financial System? (Cambridge University Press) and Sovereign Funds: How the Communist Party of China Finances its Global Ambitions (Harvard University Press).

Photo Credit: By EOBKR - Own work, CC0, https://commons.wikimedia.org/w/index.php?curid=147523058