China provides military aid to Cambodia: uniforms, vehicles, loans to buy helicopters and a training facility in southern Cambodia. Between 2011 and 2015 Chinese firms funnelled nearly $5bn in loans and investment to Cambodia, accounting for around 70% of the total industrial investment in the country. Chinese firms run garment and food-processing factories and are also heavily involved in construction, mining, infrastructure and hydropower. Others hold at least 369,000 hectares of land concessions on which they grow sugar, rubber, paper and other crops.
The government is often willing to bend the rules for Chinese firms. One is developing a luxury resort inside a national park on the edges of Sihanoukville, the country’s main port. Another has won development rights over some 20% of Cambodia’s coastline. Human-rights groups allege that fishermen who had lived in the area for generations were summarily evicted, taken inland and told that they were now farmers.
Each side gets something out of the relationship. For Cambodia, the most obvious benefit is economic: it is poor and aid-dependent; Chinese money lets it buy and build things it could not otherwise afford. Phay Siphan, a government spokesman, said last year: “Without Chinese aid, we go nowhere.” But there are also two strategic benefits. First, Cambodia uses China as a counterweight to Vietnam. Among ordinary Cambodians, anti-Vietnamese sentiment runs deep. Cambodia also uses China as a hedge against the West. Chinese money comes with no strings attached, unlike most Western donations, which are often linked to the government’s conduct….
As for China, it gets a proxy within the ten-country Association of South-East Asian Nations (ASEAN). Cambodia has repeatedly blocked ASEAN from making statements that criticise China’s expansive territorial claims in the South China Sea, even though they conflict with those of several other ASEAN members. In 2016, less than a week after Cambodia endorsed China’s stance that competing maritime claims should be solved bilaterally, China gave Cambodia an aid package worth around $600m.
China also seems to be eroding America’s clout in the region. ASEAN’s long-standing complaint, that Chinese influence on Cambodia hinders regional unity, is growing moot: over the South China Sea, at least, that unity appears to have disintegrated anyway. The Philippines, which took China to an international tribunal over its maritime claims, has reversed course. Its new president, Rodrigo Duterte, expresses contempt for America and affection for China. Vietnam, China’s other main adversary in the sea, recently pledged to resolve its maritime dispute bilaterally. Nobody yet knows what America’s policy on the South China Sea will be under Donald Trump, but increasingly it looks as if Cambodia has picked the winning side.
Excerpts, Chinese Influence in South-East Asia: The Giant’s Client, Economist, Jan. 21, 2017