Why Vietnam is worried about Cambodia's $1.7 bn canal China is helping build

The Mekong River is a lifeline for millions in the six countries it traverses on its way from its headwaters to the sea, sustaining the world’s largest inland fishery and abundant rice paddies on Vietnam’s Mekong Delta.

Cambodia’s plan to build a massive canal linking the Mekong to a port on its own coast on the Gulf of Thailand is raising alarm that the project could devastate the river’s natural flood systems, worsening droughts and depriving farmers on the delta of the nutrient-rich silt that has made Vietnam the world’s third-largest rice exporter.

Cambodia hopes that the $1.7 billion Funan Techo canal, being built with Chinese help, will support its ambition to export directly from factories along the Mekong without relying on Vietnam, connecting the capital Phnom Penh with Kep province on Cambodia’s southern coast.

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At an Aug. 5 groundbreaking ceremony, Cambodian Prime Minister Hun Manet said the canal will be built “no matter what the cost.” By reducing costs of shipping to Cambodia’s only deep-sea port, at Sihanoukville, the canal will promote, “national prestige, the territorial integrity and the development of Cambodia,” he said.

Along with those promises comes peril. Here is a closer look.

The threat to the Mekong

The Mekong River flows from China through Myanmar, Thailand, Laos, Cambodia and Vietnam. It supports a fishery that accounts for 15 per cent of the global inland catch, worth over $11 billion annually, according to the nonprofit World Wildlife Fund. Flooding during the wet season makes the Mekong Delta one of the world’s most productive farm regions.

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The river already has been disrupted by dams built upstream in Laos and China that restrict the amount of water flowing downstream, while rising seas are gnawing away at the southern edges of the climate-vulnerable Mekong Delta.

Brian Eyler, director of the Washington-based Stimson Center’s Southeast Asia Program, warns that high embankments along the 100-meter (328 feet)-wide, 5.4-meter (17.7 feet)-deep canal will prevent silt-laden floodwater from flowing downstream to Vietnam. That could worsen drought in Vietnam’s rice bowl and Cambodia’s floodplains, an area stretching over roughly 1,300-square kilometers (501 square miles).

The view from Vietnam’s rice bowl

A drier Mekong Delta is a concern for Vietnam’s agricultural sector, which powers 12 per cent of its economy. The southwestern provinces of An Giang and Kien Giang would likely be most impacted. The delta’s latticework of rivers crisscrossing green fields is vital for Vietnam’s own plans of growing “high quality, low emission rice” on 1 million hectares of farmland by 2030. The aim is to cut earth-warming greenhouse gases, lower production costs and increase farmers’ profits.

Water from the river is “essential” not just for Vietnam’s more than 100 million people but also for global food security, said Nguyen Van Nhut, director of rice export company Hoang Minh Nhat.

Vietnam’s exports of 8.3 million metric tons (9.1 U.S. tons) of rice in 2023 accounted for 15 per cent of global exports. Most was grown in the Mekong Delta. The amount of silt being deposited by the river has already dropped and further disruptions will worsen salinity in the area, hurting farming, Nhat said.

“This will be a major concern for the agriculture sector of the Mekong delta,” he said.

Cambodia’s view

Cambodia says the canal is a “tributary project” that will connect to the Bassac River near Phnom Penh. President Hun Sen claimed on social media platform X that this means there would be “no impact on the flow of the Mekong River.”

But blueprints show the canal will connect to the Mekong’s mainstream and in any case the Bassac consists entirely of water from the Mekong, Eyler said.

Cambodian authorities are downplaying the potential environmental impacts of the project.

“This is their logic-defying basis for justifying no impact to the Mekong River,” he said.

A document submitted in August 2023 to the Mekong River Commission — an organisation formed for cooperation on issues regarding the Mekong — does not mention using water from the canal for irrigation, though Cambodia has since said it plans to do so. The Stimson Center added it was “logical” that irrigation would be needed during dry months, but that would require negotiating an agreement with the other Mekong countries.

The Mekong River Commission told The Associated Press all major projects on the Mekong River “should be assessed for their potential transboundary impacts.” It said it was providing technical support to “increase transparency and cooperation among concerned countries.”

Sun Chanthol, the Cambodian deputy prime minister who oversees the project, didn’t respond to a request for comments.

Nationalistic rhetoric and tense neighbors

Cambodia has rejected criticism of the canal, which is widely seen as an effort by the country’s ruling elite to curry support for Prime Minister Hun Manet, who succeeded his father Hun Sen, who led Cambodia for 38 years.

The canal is to be built jointly by Chinese state-owned construction giant China Road and Bridge Corporation and Cambodian companies. But it is enveloped in nationalistic rhetoric. The canal would provide Cambodia a “nose to breathe through” by reducing its dependence on Vietnam, Hun Sen has said.

Vietnam has avoided openly criticizing its neighbor, instead communicating its concerns quietly. Vietnamese Foreign Ministry spokesperson Pham Thu Hang said at a press conference in May that Hanoi had asked Cambodia to share information and assess the environmental impacts of the project to “ensure the harmony of interests” of Mekong countries.

Many Cambodians remain suspicious of Vietnam’s intentions, believing it may want to annex Cambodian territory. Given the contentious past between the two countries, bigger and richer Vietnam is taking care not to appear to be impinging on Cambodian sovereignty, said Nguyen Khac Giang, an analyst at Singapore’s ISEAS-Yusof Ishak Institute.

“Although in Vietnam, there are big concerns,” he said.

Lost in Cambodia’s nationalistic rhetoric are the concerns of people like Sok Koeun, 57, who may lose her home.

The tin-roofed cottage where she has lived with her family since 1980 is right where the canal is due to be built. The river provides her with fish to feed her family when she struggles to get by selling sugarcane juice and recycling plastic cans.

No one has been in touch, she says, to answer her mounting questions: Will she get compensated? Will she get land? Or cash? Where will they go?

“I only learned about it (the canal) just now,” she said.