Cambodia’s Landmark Waterway Project Moves Forward

Cambodia is moving ahead with one of its most ambitious infrastructure developments as the Funan Techo Canal project continues to gain momentum. During a special lecture held yesterday at the Institute of Technology of Cambodia in Phnom Penh, the China Road and Bridge Corporation (CRBC) and Funan Techo Coastal Inland Waterway Co., Ltd shared the project’s long term vision, construction progress, and expected benefits. The event highlighted why the canal is considered a strategic investment that will reshape the country’s transport network, strengthen economic growth, and improve regional connectivity. Once completed in 2028, the 172.6 kilometre waterway will become Cambodia’s first inland canal linking the Mekong River system directly to the sea, creating new opportunities for trade, logistics, and national development.

Lecture Highlights Vision Behind the Canal

The presentation was part of the “Funan Dream International Lecture Series,” an initiative designed to introduce the public to the project’s development while encouraging greater understanding of its economic, social, and cultural significance. Organisers explained that the lecture series also aims to share engineering experience gained throughout construction, promote cultural exchanges between Cambodia and China, strengthen community engagement, support youth development, and improve public awareness of the landmark project.

More than 400 lecturers, students from the Institute of Technology of Cambodia, and representatives from the Ministry of Public Works and Transport attended the event. Experts used detailed presentations supported by slides and three dimensional simulation animations to illustrate the canal’s design, construction process, and long term impact on Cambodia’s transportation infrastructure.

A Major Infrastructure Investment for Cambodia

Speaking during the event, General Manager Liu Zhaowei described the Funan Techo Canal as one of Cambodia’s most significant infrastructure projects. He emphasised that CRBC remains committed to maintaining high standards of safety, environmental protection, and responsible construction throughout every phase of the project while minimising disruptions to nearby communities.

“CRBC will proactively strengthen communication with government authorities, educational institutions, and the public, fulfill its corporate social responsibilities, and work hand in hand with all stakeholders to build this key project that deepens China Cambodia friendship and enhances people’s well being,” Liu said.

His remarks reflected the company’s commitment to working closely with Cambodian institutions while ensuring the project delivers long lasting value for local communities and future generations.

Connecting Cambodia From River to Sea

The Funan Techo Canal will stretch 172.6 kilometres, beginning at the Preak Takeo tributary of the Mekong River in southern Kandal province before passing through Takeo and Kampot provinces and reaching the sea in Kep province.

Upon completion in 2028, the canal will establish Cambodia’s first inland waterway connecting the Mekong River system directly to the coastline. This new transport corridor is expected to improve domestic and international shipping, reduce logistics costs, strengthen supply chains, and provide businesses with a more efficient route for moving goods between inland provinces and global markets.

What Are the Benefits of the Funan Techo Canal Project?

The Funan Techo Canal is expected to deliver several strategic benefits that extend well beyond transportation infrastructure.

The project will provide Cambodia with direct access from the Mekong River system to the sea, reducing dependence on existing regional shipping routes while improving the country’s logistics capabilities. Faster and more efficient cargo movement is expected to lower transportation costs and increase the competitiveness of Cambodian exports.

The canal is also expected to stimulate economic development across Kandal, Takeo, Kampot, and Kep provinces by attracting new investment, supporting tourism, creating employment opportunities, and encouraging industrial growth along the waterway. In addition, the project is designed to strengthen national connectivity, expand inland water transport, and contribute to Cambodia’s long term economic resilience.

Conclusion

The Funan Techo Canal represents far more than a new transportation route. It is a strategic national investment designed to strengthen Cambodia’s economic future, improve trade connectivity, support regional development, and create new opportunities for businesses and local communities. As construction progresses toward its planned completion in 2028, the project is expected to become one of the country’s most transformative infrastructure achievements, positioning Cambodia for stronger economic growth and greater connectivity with regional and global markets.

China Dominates Cambodia’s Investment Landscape in 2025

China reinforced its position as Cambodia’s leading foreign investor in 2025, accounting for more than half of the Kingdom’s total approved investment capital and underscoring the depth of economic ties between the two countries. According to the Council for the Development of Cambodia, Chinese investors committed $5.42 billion, representing 54.25 percent of Cambodia’s total investment capital of $10 billion. This milestone reflects not only China’s sustained confidence in Cambodia but also a broader rebound in approved projects driven by the country’s open trade regime, competitive incentives, and improving business environment.

Strong Domestic and Regional Contributions Complement Chinese Capital

While China led the rankings, domestic investors also played a critical role in driving growth, contributing $3.12 billion or 31.27 percent of total investment capital. Singapore emerged as the third largest source with $599 million, accounting for nearly 6 percent, while the remaining share came from a diverse mix of international partners. This distribution highlights Cambodia’s ability to attract capital from both local and foreign sources, reinforcing the resilience and diversification of its investment base.

Investment Surge Signals Rising Confidence and Job Creation

The Cambodia Investment Committee registered 630 investment projects in 2025 with a combined value of $10 billion, a sharp increase from the previous year. The number of projects rose by 216, an increase of around 52 percent, while total investment capital expanded by approximately $3 billion or 45 percent year on year. These projects are expected to generate about 438,000 jobs, confirming investment as a major engine of employment and economic activity. Officials attributed the surge to improved investor confidence and sustained government reforms aimed at streamlining procedures and strengthening the overall investment climate.

Industrial Sector Leads as Tourism Gradually Recovers

Sectoral data shows that the industrial sector attracted the largest share of approved capital at $5.6 billion, reflecting Cambodia’s growing role as a manufacturing and processing hub. Infrastructure and other sectors followed with $3.8 billion, while agriculture and agro industry secured $436 million. Investment in tourism reached $175 million, signaling a cautious but steady recovery in tourism related activities after recent challenges, and pointing to renewed confidence in the sector’s long term prospects.

Provinces Emerge as New Investment Hotspots

Investment activity continued to spread beyond Phnom Penh, highlighting the success of decentralization and infrastructure development. Kampong Speu led the nation with 142 approved projects, followed closely by Svay Rieng with 139, driven largely by interest in border and industrial zones. Phnom Penh ranked third with 76 projects, while Takeo recorded 64. Koh Kong and Preah Sihanouk followed with 52 and 51 projects respectively. The CDC noted that this geographic spread reflects growing investor interest in provinces equipped with industrial parks, logistics links, and improved connectivity.

Investment Laws and Trade Agreements Strengthen Appeal

Lim Heng, Vice President of the Cambodian Chamber of Commerce, emphasized that Cambodia’s legal framework applies equally to all investors, stating that the Kingdom’s investment laws were “functioning well”. “Cambodia welcomes investment from all countries,” he said. “It is natural that Chinese investment features strongly, given the close friendship between the two nations and the sustained efforts by the Cambodian Chamber of Commerce, under the leadership of its President, Kith Meng, and the government led by Prime Minister Hun Manet to attract foreign capital.” He highlighted Cambodia’s “diamond-clad friendship” with China, supported by the Cambodia China Free Trade Agreement and the ASEAN China Free Trade Agreement, which allow companies operating in Cambodia to access ASEAN and RCEP markets more efficiently.

Broader Global Access Expands Cambodia’s Investment Reach

Beyond China, Cambodia continues to leverage a wide network of trade arrangements, including free trade agreements with South Korea and the United Arab Emirates, as well as preferential access to the European Union under the Everything But Arms scheme and Generalised System of Preferences with Canada and the United Kingdom. Heng also noted, “More recently, Cambodia secured a reciprocal tariff rate of 19 percent with the United States, which is more favourable than the standard US rate.” He added that this is expected to attract further investment not only from China but from a broader range of countries, reinforcing the Kingdom’s non discriminatory and open investment strategy.

Chinese Firms Deepen Engagement Amid Rising Trade Volumes

Lor Vichet, Vice President of the Cambodia Chinese Commerce Association, said Cambodia’s investor friendly environment and government backed incentives continue to draw strong interest from Chinese companies, particularly those operating under full foreign ownership. He explained that Cambodia’s open trade and investment policies, combined with its expanding network of free trade agreements including RCEP, have enhanced confidence and positioned the country as a strategic regional gateway. “These agreements help companies streamline market access and export their products more efficiently,” he said, reinforcing Cambodia’s growing role in regional and international trade.

Trade Growth Highlights Opportunities and Imbalances

Data from the General Department of Customs and Excise shows that bilateral trade between Cambodia and China exceeded $17.6 billion in the first eleven months of 2025, marking a robust 28 percent increase year on year. However, the figures also reveal structural imbalances, with Cambodian exports to China declining by 6.4 percent to $1.5 billion, while imports from China surged by 33.3 percent to $16.19 billion, widening the trade gap and underscoring the need for greater export diversification and value added production.

Conclusion

China’s dominance in Cambodia’s investment landscape in 2025 reflects deep strategic ties, supportive policies, and strong investor confidence, while rising domestic and regional contributions point to a more diversified growth trajectory. With expanding industrial capacity, improving provincial infrastructure, and broad global market access through multiple trade agreements, Cambodia is well positioned to sustain investment momentum. Moving forward, efforts to promote value added industries, balance trade flows, and attract a wider range of investors will be crucial in ensuring inclusive and sustainable economic growth.