Fresh from a high-profile China visit, Cambodia’s Senate President Hun Sen and Chinese leader Xi Jinping reaffirmed their “ironclad” ties, pledging cooperation and support for key development projects.
But doubts – raised weeks earlier to government condemnation – still surround Beijing’s financial backing for Cambodia’s stalled Funan Techo Canal, with no formal funding confirmation despite diplomatic assurances.
Following the early December visit, Hun Sen posted a summary of his meeting with President Xi on Facebook, thanking him for supporting the Funan Techo Canal project but offering no details on whether that support includes construction funding.
The $1.7 billion project, aimed at linking the Mekong River to the Gulf of Thailand and reducing Cambodia’s reliance on Vietnam for shipping, is a cornerstone of the ruling leaders’ vision for Cambodian development and a hallmark of China’s Belt and Road Initiative. But it now faces delays, uncertainty, and criticism over its potential to displace residents and its foreseen environmental impact.
China’s statement on the talks emphasized strengthening economic, security ties and advancing key projects under its Belt and Road Initiative, aiming to “contribute to high-quality synergy” with Cambodia’s national development goals. However, it offered no clarity on funding for the stalled canal.
A similar instance of a Cambodian leader touting Chinese backing for the canal came in late November, when the Foreign Ministry said Chinese Ambassador Wang Wenbin reiterated “unwavering support” for the Funan Techo Canal during talks with Foreign Minister Prak Sokhonn – claims unconfirmed by the ambassador, who instead foreshadowed commitments made during Hun Sen’s Beijing visit.
Away from dithering over much needed funding for the canal, the former longtime primer called on China to maintain grants, loans, and investment incentives, highlighting their importance in driving Cambodia’s economic growth and bolstering its political independence.
“Chinese leaders continue to provide grants, concessional loans, increase investment, and promote stronger economic cooperation with Cambodia,” the Senate stated in a press release.
Cambodia’s public debt hit $11.16 billion by the end of quarter two in 2024, with 36% owed to China, according to the Public Debt Statistical Bulletin.
However, Chinese development assistance appears to have stalled, with no new loans granted to Phnom Penh in the first half of this year, down from $567 million in 2022 and $302 million last year, according to Cambodian official data cited by Reuters.
While China is still building roads and other infrastructure, it pulled out from the construction of the new Phnom Penh airport, where it had initially committed $1.1 billion.
The apparent hesitancy of Chinese assistance to Cambodia reflects a global trend, as China grapples with economic woes at home.
“The Cambodia-China relationship remains significant, but the clarity and certainty of financial support from the Chinese side are not as strong as before, as China is currently grappling with its own economic challenges,” said Em Sovannra, a political analyst based in Phnom Penh.
Sovannara believes Hun Sen’s visit to China was primarily to reaffirm the countries’ strategic partnership amid rising global power struggles and the US-China diplomatic balancing act. He also highlighted the need for the Cambodian delegation to secure funding from China for the canal given the country’s financial constraints.
Originally, China was believed to be the sole funder of the project, but Prime Minister Hun Manet later assured attendees at the canal’s groundbreaking ceremony that China would cover 49% of the cost, with Cambodian firms financing the remainder.
Brian Eyler, a long time observer of the Mekong region and director of the US-based think tank the Stimson Center, noted that Chinese investors and state-owned enterprises have been hesitant to finance the canal due to concerns over its limited economic viability, high long-term maintenance costs, and potential environmental impacts.
Even so, last week, Sun Chanthol, the First Vice Chairman of the Council for the Development of Cambodia (CDC), assured that “the Funan Canal will be completed as planned or ahead of schedule.”
The Chinese Embassy in Phnom Penh, Foreign Affairs spokesperson Chum Sounry, and Hoeurn Samnieng, Deputy Secretary-General of the CDC, did not respond to requests for comment on the diplomatic visit or the status of Chinese funding.
