Along the Mekong River just outside Phnom Penh, Men Moeun and his neighbors live on land set aside for a massive China-backed infrastructure plan that could transform Cambodia’s economy, with some planting corn on the vacant fields to get by.

Now excitement is growing in their village after Chinese President Xi Jinping’s government agreed to move forward with the $1.2 billion Funan Techo Canal during his visit to Cambodia last week. The 152-kilometer (94-mile) waterway would link Cambodia’s manufacturing belt with the Gulf of Thailand, easing the path for exports from one of the region’s poorest economies and providing new jobs and opportunities for people living along the route.

The canal is emblematic of China’s deep investments in Cambodia over the past few decades, helping to grow a manufacturing sector that counts the US as its top customer. President Donald Trump’s move to pull foreign aid and hit the country with a 49% tariff — one of the highest in the world — now threatens to push Cambodia further into China’s orbit, along with other Southeast Asian nations also facing harsh duties.

“For Donald Trump, he only thinks of his own benefits,” Men Moeun, 59, said from the home he shares with his five children and a flock of chickens. “But for Xi Jinping, he does everything for Cambodia and China.”

For years, Cambodia has leaned heavily toward China, which has invested far more in roads, bridges and factories than the US. But since taking office in 2023, Prime Minister Hun Manet — a West Point-educated successor to his father — has tried to broaden Cambodia’s relationships, welcoming visits from top US military officials and signaling a desire for more balanced diplomacy.

China Wields Influence in Cambodia

The Chinese have helped fund and build some of the country’s biggest infrastructure projects

Hun Manet has walked a careful line in handling Xi’s visit to Cambodia, underscoring the nation’s desire to stay neutral in the US-China rivalry. While signing more than 30 deals with Xi, the Cambodian leader is also seeking an agreement with Trump during the 90-day pause in tariffs and has pledged to slash duties on US imports.

“Beef and cabbage — Cambodia takes both, without throwing away either,” Hun Manet said on Monday, referring to efforts to balance between the world’s biggest economies.

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For decades, America’s presence in Cambodia has been tied to USAID, which has played a crucial role in shaping ties through development work. In late February, the Trump administration canceled two key projects — one supporting child literacy, the other focused on nutrition for kids under five. The move weakened a key channel of US influence and quickly opened the door for China to step in with nearly identical aid.

“Trump’s withdrawal opened a vacuum for somebody to fill: That is China,” said Chheng Kimlong, an advisor to Cambodia’s government and president of the Asian Vision Institute, an independent think tank in Phnom Penh.

‘Ironclad Friendship’

Cambodia often describes its relationship with China as an “ironclad friendship,” a bond that has evolved from the Southeast Asian nation’s messy emergence from the genocidal Khmer Rouge regime, which was backed by Beijing. China now holds a third of the country’s debt, and bilateral trade hit a record $15 billion last year, according to official data.

Under Xi’s flagship Belt and Road Initiative, Chinese companies have helped finance and build much of Cambodia’s infrastructure — from new airports in Phnom Penh and Siem Reap, to the country’s first expressway linking the capital to Sihanoukville. During Xi’s visit, the two sides agreed to keep expanding the Sihanoukville Special Economic Zone, which hosts around 200 companies and supports more than 32,000 jobs.

Moyu Rasmas, who’s worked in a garment factory in the zone for 10 years now, says the work has allowed her to save up and build a house for her family. “The factories are really helpful for us,” the 31-year-old said. “I can’t imagine what we’d do without them.”

China’s footprint is visible across Cambodia. A road named Xi Jinping Boulevard winds through Phnom Penh, passing the Funan Techo Canal site and the soon-to-open Chinese-built Techo International Airport. Beijing also funded the controversial expansion of the Ream Naval Base on the country’s southern coast.

The growing reliance on Chinese cash has fueled concerns that Cambodia is becoming a client state. The US and its partners have expressed concerns that Ream Naval Base is giving China a military foothold close to crucial shipping lanes near the contested South China Sea.

Cambodia has long denied that Ream is a Chinese naval base in disguise. Over the weekend, two Japanese vessels became the first foreign navy ships to dock at Ream since its expansion. Hun Manet said warships from Vietnam, Russia, India and the US would also be welcome in the future.

Tighter Room

Yet diplomats and political analysts say Cambodia’s efforts to be friends with everyone will become harder to maintain.

Just this week, China issued a sharp warning against any country striking deals with the US that could undermine Beijing’s interests, vowing to take reciprocal countermeasures if necessary.

Until now, Southeast Asian countries primarily benefited from Trump’s move to reshape global supply chains away from China. With fewer than 90 days left under Trump’s tariff reprieve, officials in the region are now racing to convince the US they will buy more American products and rely less on Chinese trade.

Vietnam, for example, has issued a directive to curb illegal transshipment of goods to the US and other trade partners in an effort to avoid hefty American tariffs, Reuters reported on Tuesday. Cambodia and Malaysia are facing similar pressure.

In Cambodia, views toward Chinese investment remain largely positive because of the jobs and growth it brings. But there are signs of unease, including about an influx of Chinese goods as well as concerns the infrastructure buildup may be more than the country can absorb.

The $1.9 billion Phnom Penh–Sihanoukville Expressway, built by a Chinese state-owned company and long touted as a symbol of Cambodia-China cooperation, has struggled to attract traffic as drivers avoid its high tolls. The China-funded Siem Reap-Angkor International Airport, which opened in 2023 near Cambodia’s top tourist attraction, handled just 1.4 million passengers last year — well below what the old airport handled and what the new airport was intended for.

Chinese businesses have also suffered a reputational blow in Cambodia after criminal networks set up operations in places like Sihanoukville, turning the coastal city into a hotspot for scams and illegal gambling. Beijing has stepped up effort to combat organized crime in the region, repatriating more than 680 gambling and scam suspects from Cambodia.

Still, in the village where the Funan Techo Canal is set to begin, geopolitics takes a back seat to day-to-day survival.

Men Moeun, who currently works as a cook at weddings and funerals to support his family, remains hopeful about the economic boost the project could bring. Cambodians would gladly do business with both powers, he said, but one side is clearly more present.

“The US, they put pressure on us,’’ Men Moeun said. “The US doesn’t invest much in Cambodia. In contrast, there are numerous investments coming from China.’’