China, Cambodia sign $1.2 billion canal deal, raise environmental concerns

Cambodia and China have signed a public-private partnership deal, valued at approximately $1.2 billion, to finance the construction of the Funan Techo Canal, linking a branch of the Mekong River near Phnom Penh to a port on the Gulf of Thailand. The project, which had stalled after its initial groundbreaking, is designed to reduce Cambodia's dependence on Vietnamese ports, enhance trade efficiency, and stimulate national economic growth by creating a new inland waterway capable of handling large vessels. Cambodian investors will hold a 51% stake, with Chinese investors holding 49%, and the project is expected to generate about 50,000 jobs. The agreement was reached during Chinese President Xi Jinping's state visit to Cambodia, where both sides also signed several other cooperation agreements. Despite its potential economic benefits, the canal has raised environmental and regional concerns, particularly in Vietnam. China further expressed support for Cambodia's infrastructure ambitions and praised its law enforcement cooperation on issues like illegal gambling and telecom fraud.