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Cambodia - China Relations

In recent years, Hun Sens ever tightening embrace with China has been a point of growing media and diplomatic attention. Beijing has provided support and massive loans for his government as it abandoned Western-backed multiparty democracy, while Hun Sen in turn gives diplomatic support for Chinas quest for dominance in the South China Sea region.

As US influence has weakened, China has stepped in to provide billions of dollars in loans and new infrastructure projects. By the end of 2017, China was by far the biggest investor in Cambodia, having sunk $12.6bn in foreign direct investment, according to Chinese state media. China has also provided a total of $5.27bn in financial aid to Cambodia from July 2001 to June 2018, while also becoming its biggest trade partner reaching $5.8bn in 2017, up 22 percent from a year earlier.

Cambodia is now the one country in Southeast Asia openly embracing China. Hun Sen, the prime minister who has ruled Cambodia for more than three decades, has taken a strong anti-American line in a tense run-up to Julys election, and the surge in Chinas economic and political influence mirrors a downturn in relations with the United States and the European Union over deteriorating human rights and political freedoms in the country.

Sihanoukville, once a sleepy coastal town popular with backpackers, is now dominated by Chinese workers, Chinese developers and Chinese-funded projects such as casinos catering to Chinese tourists. Many Cambodians see the onslaught of Chinese as a threat to their safety, suggesting the Chinese-run hotels, restaurants, casinos and karaoke bars over the past five years are connected to increased crime. Hun Sen has tried to quell the rising fear, saying criticism of Chinese influence is ignorant and most of the Chinese arrivals to Cambodia are tourists who do not stay in the country.

Cambodian and Chinese officials have a common understanding on security issues, and China is Cambodias largest source of foreign investment and aid. China has long traditional relations with Cambodia. Chinas investment in the Kingdom of Cambodia has reached a high level in such fields as light industry and agriculture. Recently, trade relations also increased. In the military field China is also attempting to build closer relations with Cambodia. This includes granted non-refundable assistance for training, shelters, health, engineering and transportation. In the area of human resource training, China has accepted RCAF personnel for training in the strategic, tactical, technical and medical fields.

Between 1958 and 1955 Cambodia, seeking alignment with the West, made no attempt to establish diplomatic relations with Communist China. Cambodian fears of Communist Chinese intentions were eased at a dinner given by Foreign Minister Chou En-lai for Prince Sihanouk during the 1955 Bandung Conference, at which the Communist Chinese Foreign Minister stated that his country had no intention of interfering in the internal affairs of Cambodia. The good relations established between Chou En-lai and the Prince were important factors in the maintenance of friendship between the two nations. Communist China, recognized in 1958, often was referred to by Prince Sihanouk as Cambodia's "number one friend." It provided a large amount of economic aid, and each year since l963 Cambodia was one of China's sponsors for admission to the United Nations.

In 1961 Prince Sihanouk stated that his confidence in Communist China was limited to the same derree that one should limit one's confidence in all powers larger than Cambodia. He stated later that he was aware that if the United States did not maintain its presence in Southeast Asia the Communists would have no more reason to woo him - they would simply swallow him.

Instead of fighting directly with one another, China and Vietnam opted to use Cambodia as its ideological battleground. China aligned itself with Democratic Kampuchea, led by the Khmer Rouge, while Vietnam remained this regimes most vocal critic and enemy. Vietnam finally invaded Cambodia and quickly took over the country in January 1979, and China launched an attack and invaded North Vietnam.

Cambodians, with the help of the Vietnamese, expunged the genocidal Khmer Rouge from their midst. The US and China took Cold War positions in favor of a coalition that included the Khmer Rouge. As his many speeches attest (including one in early December 2008), Hun Sen does not forget -- the RGC inherently does not trust its big friends, China included. Cambodia will continue to play its balancing act among great powers as it charts its own course in the future.

In the aftermath of the July 1997 coup against Norodom Ranarith and the National United Front for an Independent, Neutral, Peaceful, and Cooperative Cambodia Party, Hun Sen developed a closer relationship with China, in part to make up for the manner in which the US cessation of economic and security assistance ended the possibility of Cambodian military access to US training and hardware. In the late 1990s, Cambodia closed Taiwans office in Phnom Penh and developed close trade relations with the Peoples Republic of China, with which it became enmeshed in a full program of public diplomacy.

The celebration of 50 years of Chinese-Cambodian relations had two symbolic high points during 2008. King Norodom Sihamoni's attendance at the Beijing Olympics (where he mingled with the likes of President Bush) and a Royal Banquet in Phnom Penh hosted by the Chinese Embassy and attended by the King. Prime Minister Hun Sen's meetings with a long train of Chinese officials over the year were more workmanlike in character. For Cambodia, the anniversary of 50 years of friendship and cooperation with China was one more opportunity to seek development assistance to bolster a strategy to build infrastructure and bring Cambodia into the world economy. The Cambodian strategy appeared to be paying off handsomely: China pledged $256 million in bilateral assistance for 2009, the highest single donor-country contribution to Cambodia ever.

King Sihanouk's complex relations with the PRC's political elite since the 1950's explain another deep-rooted "Chinese connection" of Cambodia. However, because the relationship is highly personalized, it also marks some of the boundaries on Chinese influence on Cambodia's internal affairs and external relations. From his close relationship with Zhou Enlai to Sihanouk's reliance on Chinese support of a national front movement when he was toppled by Lon Nol in 1970, to his permanent residence in Beijing -- where he resides about six months out of the year, undergoing medical treatment for cancer -- the King charmed countless generations of Chinese leaders. However, like the residence itself, the relationship is more or less the "property of China" and would revert to the PRC upon Sihanouk's death. When King Norodom Sihamoni ascended to the throne in 2004, he brought only a glimmer of his father's personal relationship to his new role.

During a visit to Cambodia by 200 government officials and private business representatives lead by Jia Qinglin, Chairman of the National Committee for the Chinese People's Political Consultative Conference, the two countries reiterated their commitment to greater economic and trade cooperation. Cambodian Senate President Chea Sim described China as a close friend and cooperative partner. China is Cambodia's largest source of foreign aid. In 2007, China pledged USD 600 million in assistance and recently announced USD 256 million in aid for 2009. (By contrast, European countries pledged a total of USD 213 million for 2009, Japan pledged USD 112 million, and the U.S. pledge was likely to be approximately USD 50 million.)

Chinese assistance is mostly in the form of concessional loans. Of the USD 256 million in aid pledged for 2009, only an estimated USD 17 million is grants; the remaining USD 240 million is loans. These loans target infrastructure projects, such as roads, bridges, and hydropower projects, and oil and mineral exploration. These preferential loans are often used to support projects invested in by Chinese companies. With a USD 10 million grant and USD 20 million soft loan, the Yunan Construction Company just built the prominent Council of Ministers offices, a notably modern building which sweeps in front of one of Phnom Penh's classic French gateway avenues. The Chinese are proposing to build more offices in the Senate. Prime Minister Hun Sen repeatedly praises Chinese aid to Cambodia's other donors, citing its "no strings attached" feature, although many point to the Chinese access to mineral and resource wealth as one among a number of non-transparent quid pro quos.

Trade ties between the two countries continue to grow. In the first nine months of the year, trade between the two countries was valued at USD 912,817,000, an increase of forty percent year on year. In 2007, trade flows were estimated at USD 933 million, up from 482,426,000 in 2004. The number of Chinese tourists visiting Cambodia is rising. In the first seven months of the year, Chinese tourists accounted for 6.3 percent of foreign visitors to Cambodia, up from 5.4 percent in 2007. (U.S. tourists accounted for 7.2 percent in the first seven months of 2008 and 5.6 percent in 2007.)

There were more than 3,000 registered Chinese companies operating in Cambodia. Chinese investment in Cambodia grew significantly in 2008, accounting for 43.5 percent of foreign direct investment projects approved during the first nine months of 2008. In 2004 and 2005, China was also the largest investor, accounting for 31 percent and 33 percent of total approved investment projects respectively. However, China slipped to second place in 2006 (behind South Korea) and stayed there in 2007 (behind Malaysia). Chinese companies are estimated to have invested over USD 1.76 billion to date, primarily concentrated in the areas of garment factories, agriculture, infrastructure, energy, and tourism. In terms of accumulated registered capital, from 1994 to 2008, Malaysians have outstripped Chinese investors by almost three to one; the Chinese have registered about USD 560 million.

Given the strong economic and trade ties between the two countries and the amount of resources China brings to the table, China is able to influence Cambodia's foreign and domestic economic policies. In 1999, Hun Sen shut down a Taiwan commercial office in Phnom Penh, overruling the Phnom Penh municipality. The promise of access to Chinese resources, either through aid, loans, or investment, serves as a strong incentive for Cambodian decision-makers to award economic or concession contracts that favor Chinese investors.

China's strong economic influence can be counterproductive to donor efforts in linking assistance to improvements in good governance and fighting corruption. Similar to the situation among Southeast Asian neighbors, Chinese money with few strings attached can exacerbate corruption and unbridled natural resources exploitation. The lack of transparency in the economic relationship and the decision-making process in general enables the politically connected to benefit from concessions at the expense of the Cambodian people and the environment. That said, whether China has the inside track in Cambodia for the long term remains to be seen.

In the late 1990s the heavy influx of Chinese-language schools was seen as a sign of Cambodia's deepening relations with China. A decade later, virtually every major street corner in Phnom Penh is graced with an English school packed with hundreds of students. The best go on to Pannasastra University, with its all-English curriculum. Paradoxically, this phenomenal growth in English is fueling even stronger economic relations with China. English, after all, is the language of trade.

China will train Cambodias military under a new deal signed 23 January 2013, following an earlier agreement to sell 12 helicopters to Phnom Penh. Cambodia is in need of the military assistance and China had honored its request with the deal, Cambodian Defense Minister Tea Banh said at the signing ceremony. Moeung Samphan, secretary of state in Cambodias Ministry of Defense, inked the agreement in Phnom Penh with the deputy chief of general staff of the Chinese People's Liberation Army (PLA), who is on a three-day visit to the country. Under the deal, China will enhance the capacity and expertise of the Royal Cambodian Armed Forces by offering training courses and providing military equipment and materials.

In October 2016, President Xi made an official visit and left behind $237 million in new aid. Some political analysts said the increasing aid from China reflected a shift in Cambodias international politics toward an Asian neighbor that had no qualms about human rights abuses. Human Rights Watch reported that during 2016, Hun Sen and the ruling Cambodian Peoples Party (CPP) significantly escalated persecution on political grounds.

Cambodia has gone further than other Southeast Asian nations in courting China, and the shift away from Washington has continued under President Donald Trump despite Hun Sen's professed admiration for him. On 04 april 2017, Hun Sen thanked Beijing for a $150 million grant for the construction of a new sports stadium in the capital. Thanks Mr. President Xi Jinping and Prime Minister Li Keqiang and the Chinese people that provided support and offered this major grant to Cambodia ... which reflects close friendship and cooperation between Cambodia and China, the Cambodian leader wrote.

China has played a key role in improving Cambodia's dilapidated military inventory since 2010, when Beijing donated 250 jeeps and trucks to Cambodia's army after the US scrapped a similar plan. China is also investing heavily in Cambodia, with its companies pledging in the past year to pump $8 billion into the country, a figure equivalent to almost two-thirds of the Cambodian economy.

China claims almost all of the South China Sea, putting it in conflict with overlapping claims by Taiwan as well as Brunei, Malaysia, the Philippines and Vietnam. During the 2012 ASEAN meetings in Phnom Penh, host Cambodia sided with China to prevent a statement of concern about Beijing's aggressive claims on territory in the South China Sea. It was the first time in ASEAN's 45-year history that it failed to issue a chairman's statement outlining the group consensus. During Cambodias 2012 ASEAN chairmanship, Cambodian officials consistently interfered in efforts by other ASEAN member states to reach a common position on the South China Seas territorial disputes.





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Page last modified: 22-07-2019 18:24:27 ZULU