During Donald Trump’s first term as America’s president, Cambodia was a byword in Washington for a Chinese satrapy, or client state. In exchange for at least $1bn in aid each year from 2016 to 2020, American officials suspected the small South-East Asian country of doing a deal to host a Chinese naval base, only the second outside China. They muttered, too, that the country had sold its veto in the Association of South-East Asian Nations (ASEAN) to China, stopping the bloc from taking a stand against Chinese ambitions in the South China Sea.

But all is not well between China and Cambodia these days. China made no new loans to Cambodia last year. It has been especially reluctant to invest in the government’s flagship project, a canal which would connect the Mekong river to the sea. And the two allies have sparred in recent years over scam centres based in Cambodia. Though linked to Chinese organised-crime syndicates, the scams target Chinese citizens and sometimes traffic them into working in the centres in Cambodia. Each side blames the other for not doing more to crack down.

The falling-out is a test for a new generation of Cambodian leaders. Hun Sen, the wily former revolutionary who ruled Cambodia for nearly four decades, retired from the cabinet alongside his erstwhile comrades-in-arms in 2023. In an unusual transition, he and most of his fellow ministers handed down their portfolios to one of their sons. Unlike their fathers, who came of age during the paranoia and poverty of the Cambodian civil war, the latest generation of Cambodian leaders grew up in peacetime and were mostly educated overseas. Hun Manet, 47, who succeeded his father as prime minister, is at present the only graduate of the American military academy West Point to head a government anywhere in the world. Unlike their predecessors, “you can have a conversation with them”, says one Western diplomat in Phnom Penh. He warns that a Western education does not mean that the new guard automatically leans towards the West. But they do not default to their parents’ deeply-held suspicions of it, either.

Some in America see in the new leadership and their struggles with China as an opportunity to begin to pull Cambodia out of China’s orbit. In its final months, the administration of Joe Biden sent a series of cabinet-level officials to Phnom Penh to test the waters, including the secretary of defence, the director of the Central Intelligence Agency and the administrator of the US Agency for International Development. In December an American warship made a port call in Cambodia for the first time since 2016. Samuel Paparo, the American admiral who, in his current role, would command American forces in any conflict with China, flew in for the ship visit.

Even so, there are reasons to doubt just how far any rapprochement will go. For one, Mr Hun Sen is still around. He remains president of the ruling party and greets foreign dignitaries as president of the Senate. He often makes pronouncements on social media about policies before the government does. A savvy operator, he has used good relations with American allies such as Japan and Australia to balance close ties with China. But he remains wary of America. In 2017 he accused Uncle Sam of scheming with the leader of the opposition to overthrow the government, later jailing him and banning his party. No evidence was provided, but it sent relations into a deep freeze.

Then there is the continued suspicion over the Chinese presence at the naval base at Ream. Since a draft agreement offering China exclusive access to the base was first leaked to the press in 2019, Chinese engineers have been busy dredging its harbour and upgrading its facilities. In December Mr Hun Sen announced that Japan would be the first nation invited to make an official port call at the base after improvements are complete. But two Chinese corvettes spent most of last year alongside a new pier there. Cambodian officials claim that China plans to donate the vessels to the country, and was merely training Cambodian sailors on them. Western analysts are sceptical of this.

And, finally, the most important Chinese investment in the country is one that China has yet to make. In 2023 Mr Hun Sen announced the plan for a $1.7bn canal from the Mekong river to the sea (see map). The canal would allow Cambodia to bypass the Mekong river delta when shipping its products abroad. It would also serve as a historic salve for the loss of the delta to Vietnam during the colonial era. “It’s impossible to overstate the political importance of the canal,” says one Cambodian analyst, who did not want to be named. Mr Hun Sen is staking his reputation on it, adding to the canal’s name the honorific that usually precedes his own: techo, which means great or powerful.

China has funded several loss-making infrastructure projects in Cambodia in recent years, including a new airport in Siem Reap, which is operating at just 20% of capacity. But in its straitened economic circumstances, Chinese officials may be concerned about the economics of a waterway with tolls. Barges would probably go on using the Mekong, which remains free and could handle larger vessels. Japanese officials who have taken a look at the business case have demurred. There seem few alternatives to Chinese cash if the canal is to be built, and politically, few alternatives to building the canal. If a deal can be done, relations would be right back on track.

Cambodia’s authoritarianism is another problem. Mr Trump may care little for norms of democracy, but Marco Rubio, his secretary of state, took a hard line against Mr Hun Sen’s abuses of power during his time as a senator. If Mr Rubio decides to own the Cambodia issue, few others in the administration are likely to be interested enough to disagree with his stance. Indeed, if Mr Rubio decides to take on Cambodia’s scam industry, too, it might be one of the very few issues in Asia where Mr Trump’s administration and its Chinese counterparts see eye-to-eye.