Why China’s Cambodian Canal Project Has America Worried

Cambodia’s ambitious plan to construct the Fanto Canal, a 180-kilometer waterway connecting the nation’s central regions to its southwestern coast, has ignited both national pride and international concern. Spearheaded by Cambodia’s leader, Hon Manet, the canal represents a significant infrastructure project aimed at reshaping trade routes and bolstering economic independence. However, with Chinese investment underwriting the project, the canal has raised suspicions in Vietnam and the United States, who fear hidden motives and strategic implications.

The Fanto Canal: A New Path for Cambodia

Cambodia has historically relied on the Mekong River, primarily controlled by Vietnam, for access to global markets. The Fanto Canal seeks to change this dynamic by providing an independent route for Cambodian exports and imports.

• Economic Objectives: The canal aims to boost Cambodia’s economy by facilitating the export of its rich natural resources, including iron, copper, gold, and other minerals. It also seeks to transform Cambodia into a leading agricultural producer by 2030, connecting inland areas to the southern coast.
• Strategic Bypass: The canal is designed to bypass the Vietnamese-controlled Mekong Delta, granting Cambodia greater control over its trade and reducing its dependence on Vietnam’s cooperation.
• Infrastructure Development: The project includes not only the canal itself but also supporting infrastructure such as waterway dams, bridges, sidewalks, and roads, all slated for completion by 2028.

China’s Expanding Footprint

China’s involvement in the Fanto Canal project is substantial. The China Road and Bridge Corporation, a state-owned company, is funding the $1.7 billion construction. This investment aligns with China’s broader strategic objectives in Southeast Asia.

• Belt and Road Initiative: The Fanto Canal is seen as part of China’s Belt and Road Initiative, a massive infrastructure development strategy aimed at expanding China’s economic and political influence across Asia and beyond.

• String of Pearls: The canal fits into China’s “String of Pearls” strategy, a network of Chinese-funded ports and bases designed to extend its influence across the Asia-Pacific region. Key projects in this network include ports in Myanmar, Sri Lanka, Pakistan, the UAE, Kenya, and a support base in Djibouti.
• Growing Influence: Cambodia is identified as one of the countries most influenced by China, particularly in areas such as law enforcement, the military, and foreign policy. Completion of the canal could further solidify China’s influence in the region. According to a 2022 study by the China in the World Network, Cambodia ranked second, just after Pakistan, in terms of Chinese influence.

Geopolitical Concerns: The US and Vietnam

The Fanto Canal has raised significant concerns among the United States and Vietnam due to its potential military and economic implications.

US Concerns:

• Chinese Military Presence: Recent satellite images showing Chinese Navy ships docked at the Ream Naval Base, near the canal’s exit point, have fueled suspicions of a secret deal between China and Cambodia to establish a permanent Chinese military presence. The Pentagon is closely monitoring the canal due to its proximity to key US strategic locations.
• South China Sea: A base at Ream, near the Gulf of Thailand, would allow China to monitor naval activity and secure the southern edge of its disputed Nine-Dash Line in the South China Sea.

Vietnam’s Unease:

• Encirclement: Vietnam’s coastline is now encircled from the east and southwest, increasing its strategic vulnerability.
• Economic Impact: The canal could divert trade away from the Vietnamese-controlled Mekong Delta, impacting Vietnam’s economy, which relies heavily on rice exports from the region.
• Water Security: Vietnamese policymakers worry that the canal could alter the Mekong River’s flow, lowering water levels during dry seasons and threatening Vietnam’s water supply and food security. Projections suggest that the canal could eventually divert up to 50% of the river’s flow.
• Historical Tensions: The relationship between Vietnam and Cambodia has been historically tense, with memories of Vietnam’s invasion and occupation of Cambodia in the late 1970s still shaping policies.

Cambodia’s Perspective

For Cambodia, the Fanto Canal represents an opportunity for economic growth and greater independence.

• Economic Boost: Chinese companies are investing heavily in Cambodia, building highways, industrial zones, and airports, boosting the country’s GDP.
• Employment: The free trade agreement with China has led to the creation of numerous jobs for Cambodians.
• Debt and Dependence: While the economic benefits are clear, Cambodia’s significant debt to Chinese banks raises concerns about its ability to oppose China’s foreign policy objectives.

Conclusion

The Fanto Canal is more than just an infrastructure project; it is a symbol of shifting geopolitical dynamics in Southeast Asia. While Cambodia seeks economic independence and growth through Chinese investment, the United States and Vietnam view the project with caution, fearing China’s expanding influence and potential military implications. As the canal progresses towards completion in 2028, it will likely remain a focal point of regional tensions and strategic maneuvering.