The US Treasury Department issued sanctions on Tuesday against a Chinese company developing the sprawling Dara Sakor tourism zone in Cambodia , the latest sign that Washington’s increasingly heated competition with Beijing has now spread to Southeast Asia. The Treasury Department accused Union Development Group (UDG) of “seizure and demolition of local Cambodians’ land” for the construction of Dara Sakor, a coastal resort area spanning 36,000 hectares (90,000 acres) that is planned to include golf courses, casinos, luxury housing, an airport, and a port large enough for cruise ships. According to the Treasury Department, UDG falsely registered as a Cambodian company in order to build on protected national park land. The company “forced Cambodians from their land and devastated the environment”, the department says. UDG was granted a 99-year lease for the project in 2008. “As is too often the case with Beijing’s One Belt One Road initiative, these activities have disproportionately benefited the [People’s Republic of China], at the expense of the Cambodian people,” the department said in a statement. “The [People’s Republic of China] has used UDG’s projects in Cambodia to advance ambitions to project power globally.” China’s Belt and Road Initiative is a massive government programme to build infrastructure – ranging from sports stadiums to train tracks to 5G networks – in a slew of countries around the world. UDG could not immediately be reached for comment during overnight hours. China to revive international yuan drive along belt and road countries The company’s website describes the project in Cambodia as “the largest regional development project in the Belt and Road Initiative led by Chinese government”, and “the largest seashore investment project not only in Southeast Asia but in the world at large”. According to the Treasury Department, UDG worked with Kun Kim, a Cambodian general who was sanctioned by the US last year over accusations of corruption. The department says that UDG, with the help of Kim and Cambodian soldiers, “prevented local villagers from planting rice paddy fields on the disputed land”. The department said the company was accused of burning down villagers’ houses and using both private and government security forces to control villagers’ movements. A 2012 report by the United Nations special rapporteur for human rights in Cambodia accused UDG of displacing more than a thousand families from their villages at the time, and cited the company as one that locals may see as “exploitative and unwilling to engage”. “The affected communities were reportedly not consulted about the project and its potential impacts, but had noticed company representatives and governmental officials travelling throughout their communes and measuring land before the signing of the contract in 2008,” the report said. The sanctions announced on Tuesday also come after the Trump administration recently announced what it calls a new and expanded “strategic forum for cooperation” with the Mekong River region, an area that includes Cambodia, Laos, Myanmar, Thailand and Vietnam. The State Department says it has invested about US$3.5 billion in aid to the entire Mekong region since 2009. Courtney Hulse, an analyst at RWR Advisory Group, which tracks Chinese investments around the world, estimated that China has invested about US$34.1 billion in Cambodia since 2013. Yesterday, Secretary of State Mike Pompeo warned Cambodia and its neighbours to be wary of China, which he said “increasingly threatens the Mekong’s natural environments and economic autonomy”. “Countries of the Mekong region have undergone an amazing journey in the last few decades,” he said. “They deserve good partners.” China’s belt and road builds network its military could use: US report In its announcement of the sanctions on Tuesday, the Treasury Department also acknowledged long-standing fears that Beijing could convert part of the development project in Cambodia into a military base for its own use. Last year, The Wall Street Journal reported that China and Cambodia had signed a secret 30-year deal for use of a Cambodian naval base near the project. A Cambodian government spokesman called it “fake news”. A report published last week by think tank Asia Society Policy Institute said a Chinese military presence at Dara Sakor could be combined with China’s other military facilities in the South China Sea “to essentially create a military perimeter around the South China Sea”. “At a minimum, dual-use facilities in Cambodia could expand the [People’s Liberation Army’s] airborne and maritime capabilities to the detriment of US and neighbouring militaries,” the report said. Last month, the State Department sanctioned subsidiaries of China Communications Construction Company (CCCC), which has played a leading role in other Belt and Road Initiative projects around the world. Cambodia’s leader in waiting: US military-educated, but China’s man? Hulse said more US government action against Chinese companies tied to the BRI seems likely in the coming months. “UDG has raised dual-use military concerns for years, particularly at the Koh Kong port, where there have been reports of military guards and soldiers at project sites,” she added. “In general, the port project, and the surrounding projects, has raised flags for being somewhat mysterious in their purpose and business rationale.” Tuesday’s sanctions were the latest this year targeting Chinese companies and officials under the Global Magnitsky Act, a law that allows the US government to blacklist people accused of corruption and human rights abuses from the American financial system. The Treasury Department used the law this summer against officials in China’s Xinjiang region whom the US says are responsible for human rights abuses there.