Cambodia’s Funan Techo Canal fuels Mekong fears
Cambodia’s handling of its waterway project and reactions in the Mekong region and beyond reflect escalating geopolitical tensions.
In a nutshell
- The Mekong River basin is witnessing escalating geopolitical tensions
- Cambodia’s major hydrologic project is alarming some of its neighbors
- Beijing’s divide-and-rule policies threaten to split the vulnerable region
On August 5, 2024, Cambodia officially broke ground on the 180-kilometer long Funan Techo Canal, designed to connect the Mekong River with the Gulf of Thailand. The Mekong is one of the world’s longest transboundary waterways, running through China and five Southeast Asian countries: Myanmar, Laos, Thailand, Cambodia and Vietnam. The new canal is scheduled to be completed as early as 2028. It has triggered potent reactions from both interested countries and outside global powers.
The conflict
Much of the media focus has been on Vietnam’s concerns in several areas, including the flow of the Mekong River and the loss of potential shipping earnings from Cambodia-bound vessels. But more broadly, in other countries including major powers, the canal has fueled general fears about the Mekong’s prospects and China’s role within it. Cambodia, meanwhile, has insisted on its right to build the canal and emphasized its own agency in navigating any concerns.
The canal’s approximately $1.7 billion cost is being financed with Chinese assistance. In geopolitical terms, the canal potentially allows China to increase its influence. Hanoi has been attentive to Phnom Penh’s ever-closer ties with Beijing and notices that they do not always align with the interests of Vietnam and some other Southeast Asian countries. Vietnam has repeatedly requested more information on the Funan Techo Canal from Cambodia and is in consultations with other Mekong stakeholders to mitigate these concerns. Cambodia, for its part, has signaled some adjustments to the project and has also intensified public diplomacy to counter negative perceptions about the canal.
At the center of this geopolitical contention is China.
This controversy is the latest sign of mounting geopolitical tensions in the Greater Mekong subregion. For decades, the river system, which is one of the world’s richest fishery and biodiversity hubs, has been under strain due to a series of hydropower projects by riparian nations, intense development and demographic pressures, and issues related to climate change.
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As the Mekong nations labor to realize their development ambitions and manage intraregional rivalries, and as the great powers are raising their stakes in the region, the area could become another flashpoint within the Indo-Pacific, even though it may not approach the fractiousness of the South China Sea disputes.
At the center of this geopolitical contention is China. Beijing already controls the Mekong River’s flow as an upstream country and a vigorous dam-builder. It has further strengthened its position by financing projects in infrastructure-hungry Cambodia and Laos and by setting up new institutions and creating parallel, competing administrative channels instead of working through established regional mechanisms like the Mekong River Commission. Simultaneously, outside powers such as Australia, the European Union, Japan and the United States have ramped up their regional presence amid rising concerns about Beijing’s inroads there.
Rising insecurity in the Greater Mekong subregion
Those incursions have started to show in the security realm as well, as seen by China’s presence at Cambodia’s Ream Naval Base. Two Chinese corvettes have been docked at the base since December 2023, and they are the only ships to have utilized a newly constructed pier funded by China and designed to conform to Beijing’s naval requirements. Cambodia’s Ministry of National Defence maintains that this does not mean a permanent deployment of the Chinese military on its territory.
Greater contestation could nonetheless create checks against regional dominance by any single actor.
Within the Mekong area, Thailand and Vietnam, which both see themselves as regional leaders, have become increasingly concerned about their region’s future outlook. There is growing anxiety that Southeast Asia risks effectively splitting into pro-China and pro-West blocs. The Funan Techo Canal is the latest manifestation ofthese concerns.
Cambodia, which has the right to build a canal on its territory, describes the project principally in economic terms as a pathway to connecting the Phnom Penh area to the country’s ports, cutting cargo and transportation costs. However, that explanation does not address other manifold concerns, such as Cambodia’s deepening dependence on China, the lack of proper notification to neighbors, or the Funan Techo Canal’s potential impacts on water availability, salinization and the health of Mekong Delta ecosystems.
Scenarios
Most likely: Continued tensions in the Mekong subregion
Looking ahead, three potential scenarios could emerge. The most likely one is that the geopolitical tensions between Mekong countries and China will intensify. In parallel, other major powers, such as Japan and the U.S., are both likely to double down on their shared vision for the area.
Regional countries will shore up their positions, be it Thailand’s promotion of its own Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), or Vietnam’s cultivation of separate triangular cooperation with Cambodia and Laos under the “CLV” acronym. Meanwhile, as has happened with the Funan Techo Canal, new infrastructure projects are likely to draw intense scrutiny from countries within and beyond the region.
While individual governments may insist that such projects ought to be viewed as drivers of growth and prosperity after the lost decades of conflict during the Cold War, other regional states and competing global powers will emphasize the risks of accumulated debt, an erosion of the region’s governance institutions and environmental degradation.
A positive aspect of such contestation could be the creation of checks against regional dominance by any single actor. On the risks side, however, the countries’ activity may become increasingly centered on power plays at the expense of trying to meet the needs of the region’s people.
Less likely: China achieves total hegemony in the Mekong
A scenario of one country unilaterally deciding the fate of mainland Southeast Asia, although still less likely, is of increasing concern. China may come to effectively dominate the Mekong region despite the efforts of local and outside actors to prevent it. Beijing’s investments through the Lancang-Mekong Cooperation (a cooperation framework established in 2016 bringing together China and the five Mekong countries) dwarfs initiatives brought to the region by the U.S. and other Western countries. The Asian Development Bank could further enable Beijing to approach a hegemon-like status.
Additionally, Beijing’s security inroads may well go far beyond stationing its warships at the Ream Naval Base. China could intensify its Mekong River patrols and joint military exercises with Cambodia. Also, Beijing could link China’s economic assistance more directly with recipient countries’ support for its initiatives in realms that include maritime security or outer space.
China may grow bolder in utilizing its influence to divide Southeast Asia. Its strategy would include more regularly and blatantly pressuring mainland states in the region to undermine their efforts at reaching a consensus on regional problems. This practice would further strengthen Beijing’s effective veto power in leading institutions, such as the Association of Southeast Asian Nations (ASEAN).
Least likely: Grand compromises among regional countries
The scenario of Mekong countries becoming more adept at developing grand compromises to their conflicting aspirations and more skillful in finding workable environmental solutions or managing geopolitical tensions is the least likely in the near term.
Nevertheless, the reality on the ground in many places is pushing the countries in this direction, albeit slowly. Hydropower-related environmental threats in the Mekong River are becoming dire, as are climate and environmental crisis-level developments in Vietnam’s Mekong Delta breadbasket or Tonle Sap, one of Southeast Asia’s greatest lakes and Cambodia’s freshwater fishery hub.
A major crisis could raise awareness among Mekong states that they should better utilize their existing bilateral and regional arrangements to manage future troubles and flashpoints. While bolder initiatives, such as a previously proposed 10-year moratorium on the building of hydropower dams along the Mekong River, may still prove elusive, modest steps like proper notification of neighbors about construction plans likely to affect the Mekong mainstream could lead to progress.
While the path of geopolitical competition in the Mekong area has not been decided yet, it is already clear that some aspects of the region’s condition, such as the river’s flow, are dire, urgent and need to be addressed in a coordinated fashion.
Anoulak Kittikhoun, chief executive of the Mekong River Commission Secretariat, put it bluntly in an interview in April 2023: “The Mekong has changed significantly … It is high time for the leadership of the countries to get together and commonly recognize these issues and look for ways to not only deal with them better in a more cooperative manner but also to find opportunities for better sustainable development.”
The extent to which the appeal resonates with various stakeholders and leads to more urgent action to protect the Mekong River and its surrounding communities is uncertain. If it does resonate, the Funan Techo Canal may prove to have a political silver lining after all.
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