Vietnam’s Geopolitical Anxiety Over Cambodia’s Funan Techo Canal

Cambodia’s plan to build the Funan Techo Canal, a 180-kilometre waterway linking a port in its capital Phnom Penh with Kep Province and onto the Gulf of Thailand, has made recent headlines, particularly in Vietnam. Pitched as a plan to revive Cambodia’s historic but under-utilised water systems, the canal will be 100 metres wide, 5.4 metres deep, and will accommodate ships of up to 3,000 deadweight tons (DWT). The China Road and Bridge Cooperation (CRBC) will finance the entire US$1.7 billion construction project under a Build-Operate-Transfer arrangement.

Despite Cambodia’s assurances, the plan has prompted Vietnam’s concerns about the potential environmental impact on the Mekong River. These concerns, in the author’s view, mask Vietnam’s geopolitical anxiety about its declining influence in Cambodia and China’s role in Mekong River geopolitics.

For Vietnam, the Funan Techo Canal will lead to lost earnings from Cambodia-bound ships. Moreover, it is another indication of Cambodia’s shifting position between China and Vietnam. Since the July 1997 political crisis, Cambodia’s overtures to China have been driven partly by tension with Vietnam resulting from the issues of illegal Vietnamese immigrants in Cambodia and Vietnam’s alleged border encroachments. Tension over the canal would reaffirm China’s importance for Cambodia’s security.

The canal raises two related predicaments for Vietnam. On the one hand, it needs to tread carefully since Beijing will back the canal financially under the Belt and Road Initiative (BRI). On the other hand, overreactions or inflammatory comments from Hanoi will stir up nationalistic sentiment among Cambodians pushing the project forward. The project symbolises Cambodia’s quest for greater sovereign ability to transport and trade goods domestically and internationally.

Though the canal is an essential step in Cambodia’s long-term quest for greater connectivity and economic prosperity, how well the country manages its ties with Vietnam during the canal’s construction will be the first foreign policy litmus test facing Hun Manet.

Despite the overblown argument by Vietnamese scholars that the canal could bring a Chinese military presence into Cambodia, Phnom Penh has no reason to antagonise Vietnam and no use for such a speculated presence. Furthermore, Phnom Penh would have to think more than twice before embarking on something that could invite external interference and a repeat of its tragic past. Cambodia’s history teaches us that a Chinese military presence will violate Article 53 of Cambodia’s constitution which prohibits foreign troops on its soil, in any case. This is a principle that rings similar to Vietnam’s “four no’s” policy.

For Cambodia, the canal will potentially reduce shipping costs and allow it to reroute a significant proportion of exports gradually away from Vietnam’s Cai Mep port along the Mekong Delta. Cai Mep is where Cambodia’s exports currently navigate before reaching international waterways. Their current dependence on Vietnam means that the Vietnamese can use administrative red tape, cross-border shipping fees, and political goodwill as strategic levers to keep Cambodia in a disadvantaged, if not subordinate, position. Vietnam is certainly not planning to lose that leverage anytime soon.

Critics of the canal may argue that it is not a silver bullet for Cambodia’s shipping woes. Containers would still have to be transhipped in ports like Singapore or Hong Kong before reaching their final destination, but the proposed canal is one key to strengthening Cambodia’s trade competitiveness, logistical connectivity, and to reducing its dependence on foreign ports.

Separately, the ongoing phase one expansion of the Sihanoukville Autonomous Port funded by Japan is a bigger step towards establishing Cambodia’s ability to bypass foreign ports to ship products directly to Europe and US markets. This expansion and the proposed canal are vital parts of Cambodia’s 2023-2033 logistics master plan.

Other critics may point to the irony of Cambodia lessening its reliance on Vietnam, only to depend more on China. However, they miss one crucial point: unlike Vietnam, Cambodia does not see China as an immediate challenge to its security.

That is why Cambodian Prime Minister Hun Manet’s argument that the canal would enable his country to be “breathing through our own nose” has resonated widely with the Cambodian public. The national psyche has been fundamentally shaped by bitter encounters with Vietnam throughout history, with examples like the Nguyen dynasty’s absorption of Cambodia’s lower Mekong Delta territory in the 18th century. If anything, Vietnam’s overreactions to the canal today will play right into those nationalistic sentiments.

Cambodia’s wariness about its reliance on Vietnamese ports has historical roots. In 1956, the then-South Vietnamese government weaponised Cambodia’s dependence on the Port of Saigon to impose an economic blockade to pressure it over its neutrality. It was this blockade that prompted then Cambodian leader Norodom Sihanouk to seek France’s support for the Port of Sihanoukville’s construction, which was completed in 1959. Vietnam’s 1994 blockade of Cambodian shipping was another instance of Cambodia not being able to ‘breathe through its own nose’.

Though Vietnam’s concerns about the project’s possible environmental impact are understandable and need to be assuaged, its anxiety is more driven by the prospect of further losing its influence in Cambodia and China’s role in Mekong River geopolitics.

Though the canal is an essential step in Cambodia’s long-term quest for greater connectivity and economic prosperity, how well the country manages its ties with Vietnam during the canal’s construction will be the first foreign policy litmus test facing Hun Manet.

President of the Cambodian Senate Hun Sen’s recent comments may reassure Hanoi that Phnom Penh takes its concerns seriously and that the canal is solely for socio-economic purposes rather than more nefarious ones. A cautious optimist like this author would cast the canal as just one issue of many in the larger Cambodia-Vietnam relationship.

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