Cambodia, the Southeast Asian country that boasts about its ancient temples and a 2000-year old history, is emerging as another flashpoint between China and the United States as the world’s two biggest economies compete for diplomatic and military influence.

The latest development which has raised concerns in Washington is centred around Cambodia’s Ream Naval Base in the port city of Sihanoukville.

A Wall Street Journal (WSJ) report published on July 22 claimed that China has signed a secret agreement to lease the base on the Gulf of Thailand where it will install its own navy personnel and warships, ostensibly to restrict US military outreach in times of any conflict.

Quoting unnamed US officials, the WSJ said the base gives Beijing its first dedicated staging facility in Southeast Asia.

Some 40 miles from the Ream base, a private Chinese contractor is building an airport that US officials fear could be used for military purposes.

For its part, Phnom Penh denied the report with Cambodian Prime Minister Hun Sen saying:

“This is the worst-ever made-up news against Cambodia”

But few Western officials will take Sen’s denial seriously. In recent years his government has taken hundreds of millions of dollars in aid from Beijing, which is also investing heavily in the country under its Belt and Road Initiative.

Beijing’s influence is evident in Sihanoukville, where Chinese investors have built dozens of casinos and restaurants specifically to cater to Chinese tourists.

A Chinese company is building a multi-billion dollar investment zone that includes 20 percent of the country’s coast. It has leased it for 99 years.

Washington has long expressed concern about how China is trying to use its investments in developing countries to expand it’s military’s outreach.

Beijing has only one overseas military base, which it mans in Djibouti, in the Horn of Africa. Chinese officials insist that the facility is meant for logistical support and not for military use.

In recent years, China has spent billions of dollars building roads, ports and other infrastructure projects in developing countries such as Pakistan.

The US and its allies fear the investments are a pretext to force other countries to host the Chinese military.

The first signs of tension over the Ream base appeared early this month when it emerged that US officials had some inkling of what was happening.

Washington had financed and helped Cambodia build the Ream base facilities.

But recently, Phnom Penh declined a US offer to repair a training facility and boat depot.

At the time, the US officials sought an explanation and expressed fear, saying the move indicated Cambodia was tilting towards China.