PHNOM PENH - At a ceremony last month marking the construction of the US$128 million Cambodia-China Prek Kdam Friendship Bridge in Kandal province, Cambodian Prime Minister Hun Sen said the growth in aid and investment from China was boosting economic development and strengthening his country's "political independence".
"China respects the political decisions of Cambodia," he told his audience. "They are quiet, but at the same time they build bridges and roads and there are no complicated conditions." It was a thinly veiled reference to the strings attached to Western aid, including calls for progress on anti-corruption reforms, and underscored China's growing role in Cambodia's developing economy.
With a still booming economy amid the global economic downturn, China has maintained the momentum behind its strong Cambodia balances East and West
By Sebastian Strangio
PHNOM PENH - At a ceremony last month marking the construction of the US$128 million Cambodia-China Prek Kdam Friendship Bridge in Kandal province, Cambodian Prime Minister Hun Sen said the growth in aid and investment from China was boosting economic development and strengthening his country's "political independence".
"China respects the political decisions of Cambodia," he told his audience. "They are quiet, but at the same time they build bridges and roads and there are no complicated conditions." It was a thinly veiled reference to the strings attached to Western aid, including calls for progress on anti-corruption reforms, and underscored China's growing role in Cambodia's developing economy.
With a still booming economy amid the global economic downturn, China has maintained the momentum behind its strong commercial diplomacy towards Southeast Asia. Cambodia - a small but important corner of Beijing's emerging regional economic sphere of influence - has been one of the key beneficiaries of the loans, aid and investment largesse.
Official "friendship" delegations between the Chinese Communist Party and Hun Sen's ruling Cambodian People's Party have proceeded apace throughout the crisis. During a three-day visit to China's Sichuan province that concluded over the weekend, Hun Sen and Chinese officials announced $853 million worth of new Chinese loans and grants for various infrastructure projects in Cambodia.
The funds will be dedicated to hydropower projects, two bridges and the rehabilitation of the highway linking the country's Kratie and Mondulkiri provinces. The announcement comes on top of the $880 million in loans and grants Cambodia has received from Beijing since 2006, including finance for the $280 million Kamchay hydropower dam in Kampot province and the recently completed $30 million Council of Ministers building in the capital Phnom Penh - presented as a gift from the government in Beijing.
Chinese Embassy spokesman Qian Hai said Chinese investments in Cambodia as of 2009 totalled $4.5 billion, a commercial success he credits in part to a policy of respecting Cambodia's sovereignty. "We do not interfere in the internal affairs of Cambodia," he said. Phnom Penh has traditionally reciprocated by recognizing Beijing's One-China policy, advocating "peaceful reunification" between Taiwan and the Chinese mainland, Qian Hai added.
China's global sales pitch to developing countries, essentially aid and investment decoupled from prickly issues of human rights or democratic reforms, has in recent years scored diplomatic points in Phnom Penh. But like most Southeast Asian countries, Cambodia has had a complicated and sometimes stormy historical relationship with Beijing.
The 1950s and 1960s were marked by close relations, cemented by the close personal friendship between Cambodia's mercurial Prince Norodom Sihanouk and Chinese leaders Mao Zedong and Zhou Enlai, who offered the beleaguered Sihanouk asylum - including a residence and official stipend - after he was overthrown by the US-backed General Lon Nol in 1970.
China's support from 1975-79 for the radical Khmer Rouge regime - as a counterweight to the assertiveness of the recently reunited socialist Vietnam - led Hun Sen to refer to China as "the root of everything that was evil" in Cambodia in a 1988 essay. As memories of Cambodia's long civil war have faded and Hun Sen has consolidated his power, historical grievances have yielded to more practical concerns. (After Hun Sen ousted then-first prime minister Prince Norodom Ranariddh in a bloody factional coup in 1997, it is notable that China was the first country to recognize his rule.)
China's commercial growing economic ties to Cambodia are only one aspect of its re-engagement with Southeast Asia. Joshua Kurlantzick, a fellow at the Council on Foreign Relations in Washington and the author of Charm Offensive: How China's Soft Power is Transforming the World, said that around the time of the 1997-98 Asian financial crisis, China began to assert itself in the region through greater aid disbursements, new trade arrangements, cultural diplomacy and military ties.
"China ... saw broader China-ASEAN [Association of Southeast Asian Nations] relations as a way of reassuring countries in the region that China would be a peaceful and non-interfering type of power - that China could work well with ASEAN and thus demonstrate it could play the game of soft, multilateral diplomacy," he told Asia Times Online.
Countervailing aid
Chinese aid is in some measure weaning Cambodia off its dependence on the West, which still contributes nearly half of the country's annual budget.
On October 16, the National Assembly debated a new trade treaty with China with lawmakers from the opposition Sam Rainsy Party (SRP) arguing that Chinese-funded projects have had adverse effects on the environment and local people. SRP parliamentarian Mu Sochua singled out a 199,000-hectare agricultural concession granted to Chinese firm Wuzhishan in the country's northeast Mondulkiri province, which she said has illegally stripped large tracts of land from ethnic minority Phnong villagers.
Carlyle Thayer, a professor of political science based at the Australian Defense Force Academy in Sydney, said China's strategy of "non-interference", enshrined also in the ASEAN Charter, has been a major selling point for Beijing in Southeast Asia, where in some countries it is viewed as a shield against pressure from the United States and other Western countries. "Chinese aid offers an escape hatch for countries under pressure from the West [that] promote human rights and democratic reform," Thayer said.
Kurlantzick said that Chinese aid was likely to have a "corrosive" effect on good governance and human rights in Asia. "Hun Sen knows how to play China off of the Western donor groups and China's aid - even if not necessarily linked to any downgrading of human rights - could have the effect of a kind of race to the bottom on human rights," he said.
Sophie Richardson, Asia advocacy director at the US-based Human Rights Watch, agreed that unconditional Chinese aid to Cambodia could act as a "financial lifeline" that might otherwise be cut by Western donors. She said, however, that since Western nations often failed to work together effectively to set and enforce aid conditions in Cambodia, China's growing presence may end up having little distinct impact on human rights.
"The most important point - and key problem - is that the government in Phnom Penh ... seems determined to be extraordinarily abusive, regardless of whoever's money is on offer," she said.
Despite the recent influx of Chinese capital, there is no indication Hun Sen's government is ready to abandon ties to the West. Chea Vannath, an independent political analyst based in Phnom Penh, said that growing Chinese influence would likely be used to counterbalance the influence of Western countries - a vital strategy for a country of Cambodia's small size and redolent of Prince Sihanouk's balancing act during the periods of the Cold War that he ruled the country as prime minister, from 1955 to 1970.
"I think that what the government is trying to do is to diversify its aid ... It is eager to strike a balance," she said. "As a sovereign government, Cambodia needs aid from both sources."
Thayer agreed that rumors of a drop in Western - particularly American - influence were exaggerated. In 2007 US-Cambodia relations warmed when Washington lifted restrictions on the provision of aid to the central government, imposed following the coup of 1997. The US was already the top destination for Cambodia-made garments and textiles, one of the country's top exports.
In June, US President Barack Obama signalled his intention to boost trade further by removing Cambodia and Laos from a Cold War-era US trade blacklist, opening the way for American businesses to access US government-backed loans and credit guarantees for trade and investment between the two countries.
"All the countries of Southeast Asia, to varying extent, have long adjusted to China's rise and political influence," said Thayer. "They do not want to be put in a position of having to choose between China and the United States."
PHNOM PENH, Oct 17 - China will provide $853 million in loans to Cambodia for infrastructure, irrigation and dam projects to boost its economy and reduce poverty, Cambodia's foreign minister said on Saturday.
The agreement was clinched on Friday when Chinese Premier Wen Jiabao met Cambodia's Prime Minister Hun Sen on the sidelines of an economy and trade fair in Sichuan, Hor Namhong told reporters.
"China continues to help Cambodia's infrastructure development, even though China is itself faced with problems from the global economic crisis," he said.
China will provide $593 million for 11 projects proposed by Cambodia's government in 2009, in addition to $260 million for five projects requested last year, Namhong added.
The money will be invested in new roads near the borders of Thailand and Vietnam and the expansion of existing links to the capital of Phnom Penh.
At least $30 million will be invested in expanding the capacity of the Phnom Penh port to meet the increasing demand of cargo ships docked on Tonle Sap River.
Cambodia is keen to develop new dams and irrigation projects to boost its agriculture sector, which contributed 34 percent of gross domestic product last year, followed by the tourism and garment manufacturing sectors.
An estimated 30 percent of Cambodia's 14 million people live beneath the poverty line, earning less than a dollar per day.
China is Cambodia's biggest aid donor, providing $600 million in 2007 and about $260 million in 2008, according to the state-run Council for Development of Cambodia.
It is also Cambodia's biggest foreign direct investor and has pumped $1 billion into the Southeast Asian nation this year. (Reporting by Ek Madra; Editing by Martin Petty and Ron Popeski)
