During Chinese President Xi Jinping’s state visit a few days ago to Cambodia the two nations formally agreed on a $1.2 billion deal for construction of a 151 km canal linking a branch of the Mekong River near Phnom Penh to a port on the Gulf of Thailand.
The ambitious project aims to boost trade efficiency and economic growth and is expected to significantly enhance regional logistics and create up to 50,000 direct and indirect jobs in Cambodia.
Cambodia was among the first to participate in the cooperation under the China-proposed Belt and Road Initiative (BRI), in December 2013. Under the BRI framework, a series of landmark projects – including the Phnom Penh-Sihanoukville Expressway, Siem Reap Angkor International Airport and the Sihanoukville Special Economic Zone – have taken root in Cambodia, standing as testimonies to pragmatic China-Cambodia cooperation.
The canal will be developed by the Funan Techo Coastal-Inland Waterways Company Ltd, with Cambodian investors holding a 51% stake and Chinese investors holding 49%. China’s state-owned China Road and Bridge Corporation is the contractor for the project’s construction from the Bassac River to the coastal province of Kep.
The project includes canal excavation, ship locks, and navigation infrastructure. The canal will create a new inland waterway-maritime corridor capable of handling vessels up to 3,000 deadweight tons.
The project has undergone a rigorous Environmental Impact Assessment conducted by 48 specialists, which confirmed minimal environmental impact, according to the announcement. The Cambodian government has also taken steps to minimize resettlement, designing a route that avoids densely populated communities and cultural sites. A responsible compensation and consultation process is underway to address any potential displacements.
The canal project is part of a larger strategy to enhance Cambodia’s role in regional trade. By linking the Mekong River to the Gulf of Thailand, the canal will provide a critical link in the regional supply chain, facilitating easier access to international markets.
Sources:
- Toxigon Infinite, April 20, 2025. https://toxigon.com/china-and-cambodia-agree-on-financing…
- Bankgkok Post, 19 Apr 2025
https://www.bangkokpost.com/…/cambodia-and-china-commit…
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