In the early first century CE, on the lower Mekong, the first Indianized kingdom of Southeast Asia which the Chinese called them Funan emerged and became the great economic power in the region, its prime city Óc Eo attracted merchants and craftmen from China, India, and even Rome. Funan is said to be the first Khmer state, or Austronesian, or multiethnic. Though treated by Chinese historians as a single unified empire, according to some modern scholars Funan may have been a collection of city-states that sometimes warred with one another and at other times constituted a political unity.^[65]

The ethnic and linguistic origins of the Funanese people have consequently been subject to scholarly debate, and no firm conclusions can be drawn based on the evidence available. The Funanese may have been Cham or from another Austronesian group, or they may have been Khmer or from another Austroasiatic group. It is possible that they are the ancestors of those indigenous people dwelling in the southern part of Vietnam today who refer themselves as "Khmer" or "Khmer Krom." The Khmer term "krom" means "below" or "lower part of" and is used to refer to territory that was later colonized by Vietnamese immigrants and taken up into the modern state of Vietnam.^[66] While no conclusive study to determine whether Funan's ethnolinguistic components were Austronesian or Austroasiatic, there is dispute among scholars. According to the majority of Vietnamese academics, for example, Mac Duong, stipulates that "Funan's core population certainly were the Austronesians, not Khmer;" the fall of Funan and the rise of Zhenla from the north in the 6th century indicate "the arrival of the Khmer to the Mekong Delta." That thesis received support from D. G. E. Hall.^[67] Recent archaeological research lends weight to the conclusion that Funan was a Mon-Khmer polity.^[68] In his Funan review, Michael Vickery expresses himself a strong supporter of Funan's Khmer predominance theory.