China, Cambodia vow supply chain cooperation, sign canal deal

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BEIJING (Reuters) – China and Cambodia have agreed to build safe and stable supply chains together and to strengthen cooperation in transportation infrastructure, they said in a joint statement released by China’s foreign ministry on Friday.

The two countries also signed a deal on the construction of a major canal Cambodia hopes will transform its economic fortunes, though the investment and scale of the project have been apparently trimmed.

The agreements came at the conclusion of Chinese President Xi Jinping’s three-nation tour of Southeast Asia that included stops in Vietnam and Malaysia.

The trip was part of Beijing’s effort to consolidate economic and trading ties with close neighbours in the face of China’s tariff standoff with the United States.

“China supports Cambodia in building the Funan Techo Integrated Water Conservancy Project in accordance with the principles of feasibility and sustainability,” the joint statement said.

The canal project, which was previously estimated to cost $1.7 billion – nearly 4% of the country’s annual gross domestic product – and stretching 180 km (112 miles), is now valued at $1.16 billion with a length of 151.6 km, the Cambodian government said in a separate statement on Friday.

It will be financed through a public-private partnership, the statement showed, with Cambodian investors holding a 51% stake and Chinese investors holding 49%.

China also commended Cambodia’s efforts in cracking down on illegal online gambling and telecom fraud in the joint statement, with the two countries agreeing to further strengthen law enforcement cooperation.

Before Xi’s visit, the Cambodian government said it had deported to China a number of “Chinese criminals”, including people from Taiwan, in a move that angered Taipei and was praised by Beijing.

The two countries also said they had agreed to establish ministerial dialogue between their foreign and defence ministers to facilitate coordination on major strategic issues.

(Reporting by Beijing Newsroom; Editing by David Goodman and Emelia Sithole-Matarise)