China’s Growing Influence in Cambodia

Prime Minister Hun Sen has vehemently argued in favour of his country’s growing relations with China. In May this year, speaking at the 26th International Conference on The Future of Asia in Tokyo, Hun Sen stated “If I don't rely on China, who will I rely on? If I don't ask China, who am I to ask?” Furthermore “Without assistance from China…maybe we will not have vaccines for our people”.

China has emerged as Cambodia’s most trusted partner during the COVID-19 pandemic. As of 11 July 2021, Cambodia received 2.2 million doses of Sinopharm (donation) and commercially received 4.35 million doses from Sinovac and Sinopharm. Both countries have expressed willingness to “strengthening coordination in regional and global anti-epidemic efforts”, “reject vaccine nationalism or any political manipulation” while “tracing coronavirus origins”.

By all accounts, the pandemic has adversely impacted Cambodia’s economy. Tourism, manufacturing and construction sector which collectively account for more than 70 percent of the country’s GDP growth have been hit hardest. But Cambodia’s economy is recovering and is projected to grow 4 percent in 2021 after contracting 3.1 percent in 2020. In this context, it is useful to mention that in October 2020, China and Cambodia signed a free trade agreement (FTA). Being an agrarian economy, agriculture exports are extremely important for Cambodia. The FTA covers 300 agriculture products that could “increase Cambodia’s exports to China by 23 percent”

Their bilateral trade volume in 2020 was $9.56 million and the growth is impressive with a year-on-year increase of 1.4 percent. At the multilateral label, Cambodia signed the RCEP which would provide access to Cambodian agricultural products in 15 markets including China.

China has emerged as the top most investor in Cambodia. The cumulative “Chinese investment capital from 1994 to 2019 was US$23.43 billion, accounting for 49.84% of total foreign direct investment in Cambodia”; furthermore, China “provided grants of about US$280 million from 2013 to 2015, about US$590 million from 2016 to 2018, and about US$560 million from 2019 to 2021”.  

Under the Belt and Road Initiative China is funding connectivity infrastructure including road and aviation projects. Notable among these are the Phnom Penh-Sihanoukville expressway and two new international airports in Siem Reap and Phnom Penh are coming up. Prime Minister Hun Sen, in his remarks at the Communist Party of China (CPC) and World Political Parties Summit, held to commemorate the 100th anniversary on July 6 of the CPC’s founding, acknowledged China’s support and stated that the Chinese assistance “really helps to strengthen political independence along with economic and social development and in reducing poverty.”

Beyond economics, China-Cambodia bilateral relations span the politico-diplomatic domain and Phnom Penh has espoused one-China policy. In the strategic domains, Cambodia has supported China over South China Sea and in 2016 it was accused of “succumbing to pressure from China” that stalled the ASEAN statement on the South China Sea dispute. However, Cambodia now welcomes “resumption of the South China Sea Code of Conduct (COC) negotiations as it reflects the commitment of ASEAN and China to maintain regional stability by managing differences as per international law”.

In recent times, there have been concerns over Ream Naval base and Dara Sakor International Airport that are construed as part of China’s plans to use these for military purposes. The Koh Kong port is linked to 3,400-meter long runway at Dara Sakor airport, and may possess some features suggesting that it could stage military aircraft too. It is important to tone down exaggerated geostrategic concerns over Koh Kong and Dara Sakor and their possible military use given that it is not extraordinary for countries to develop and build maritime and aviation infrastructure which are used for commercial as well as military purposes.

However, river water issues related to the 4,800 kilometers long Lancang-Mekong River that originates in the Tibetan Plateau and discharges into South China is of concern. China has built as many as 11 dams on the Lancang River and affects lower riparian countries i.e. Myanmar, Thailand, Laos, Cambodia and Vietnam. China has also been reluctant to share hydrological data particularly during the dry seasons and is accused of releasing water during rainy seasons causing flooding in lower riparian countries. Despite China’s best attempts to dispel these faers, there remains ‘trust deficit’ over Mekong river water issues.

Cambodia is part of the US led Mekong-US Partnership (MUSP) and President Joe Biden’s administration has “pledged continued U.S. support for a free and open Mekong region” It remains to be seen how Cambodia will manage China’s apprehensions over the MUSP that is allegedly targeted against China.

Finally, Chinese growing influence in Cambodia could negatively impact on ASEAN unity that could undermine the character and ethos of the grouping and whose Member States have in the past withstood external pressures.

Dr Vijay Sakhuja is Consultant Kalinga International Foundation, New Delhi.

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