Cambodia in fusion with China

China, Cambodia, investments, infrastructure, airport

A new MoU between Cambodia and China signed last week turns the Kingdom even more dependent of its powerful partner.

While Europe and the United States are feeling increasingly upset by the Cambodian government lack of democracy, China is sending out its pawns to Cambodia turning increasingly into the dominant political and economic force  to the small kingdom. The Chinese strategy is also a sign for Cambodia Prime Minister to take further distances from the Western world as he knows to enjoy Chinese full support.

In a press conference in December, China’s foreign ministry spokesperson Geng Shuang used more complimentary rhetoric to describe the bilateral relationship. He said:

China and Cambodia are good neighbors, good friends, good partners and good brothers… China-Cambodia relations have brought tangible benefits to the two countries and two peoples, made positive contributions to peace and development of this region and the world at large and become a model for state-to-state exchanges. China is satisfied with the substantial progress in our bilateral relations.

Cambodia is indeed turning into China most fervent supporter, taking side with its powerful partner in most issues. Cambodia even prevented ASEAN from warning China in the South China Sea dispute with the Philippines and Vietnam in 2012.

In return, Chinese President Xi Jinping decided during a visit to Phnom Penh in October 2016 to cancel state debts while offering the Kingdom $237 million in direct aid and nearly $15 million in military support. China represents now Cambodia largest aid donor, largest investor while being the first tourism inbound market. Between 2011 and 2015, Chinese firms provided almost US$5 billion worth of loans and investments to the Kingdom.

Looking at tourism, Chinese travellers generated 16% of all international arrivals back to 2016. China market share is likely to have reached 20% in 2017 with an estimated number of 1.1 million of travellers last year. During the first eight months of 2017, China arrivals to Cambodia jumped by 44% and the government expects two million Chinese to come to the Kingdom by 2020.

China presence in Cambodia is increasingly visible: street signs, buildings and factories are these days written in Khmer and Chinese while entire areas are turning into Chinese enclave. This is for example the case for a new resort area in Koh Kong along the coast which is developed for Chinese tourists and does not bear any indication that it is still in Cambodia. In Sihanoukville, over 100 Chinese firms have been investing to make the port and the area a new high tech hub for the country.

Last Thursday, the Chinese Prime Minister Li Keqiang signed another MoU with Cambodia to develop the country’s infrastructure, agriculture and health system, representing billions of US dollars. Among them is the first motorway of the country, linking Phnom Penh to Sihanoukville, a 200 km track and a total investment of US$2 billion. A new airport for Phnom Penh has  also been confirmed following the attribution in 2016 of a new airport in Siem Reap –built by a Chinese firm.

The new airport will represent an investment of US$1.5 billion and would be constructed in Kandal province, south of Phnom Penh. No concrete location has been communicated so far.

The future facility will be developed on 2,600 hectares of land by Cambodia Airport Investment Co Ltd, a joint-venture between the local conglomerate OCIC and the government’s State Secretariat of Civil Aviation. The loan however will mostly come from China. The size of the airport will be six times larger than the current airport in Pochentong (400 hectares) and the same size than Chicago O’Hare airport in the United States. Many issues need still to be cleared with a construction not slated before five years according to experts and a likely opening in a decade time.