Introduction
China’s Belt and Road Initiative (BRI) aims to boost global economic growth and link the East Asia region to Europe through physical infrastructure projects. China has been expanding its massive infrastructure projects throughout Oceania, Africa, Latin America and Asia, significantly broadening China’s dominance in the regions.
The expansion of Chinese influence is a byproduct of the BRI that Southeast Asian states, including Cambodia, have had to weigh in when deliberating whether or not to participate in this mega initiative. While it is indeed a cause for concern, destination countries in return would receive many benefits, including economic development, heightened people-to-people exchange and some geopolitical advantages.
The BRI has been particularly successful in making inroads in Cambodia. The proliferation of BRI projects in the country is displayed through numerous infrastructure projects, large amount of investment and financial assistance.
Economic Boon for Cambodia
In terms of economic development, Cambodia has attracted around US$2.32 billion of Chinese investment in 2021, thus retaining China’s position as the top investor in the country. Cambodia also benefits from trade with China, mainly exporting garment and agricultural products to the Middle Kingdom which currently is the biggest importer of Cambodian rice.
This extensive growth of Cambodia’s economy has inevitably led to the growth of income for those in the agricultural sector and created employment opportunities for Cambodians. ASEAN Secretary-General Kao Kim Hourn has even stated that the BRI has provided a huge contribution to the irrigation system of Cambodia which largely ensured the food security.
Furthermore, China has also loaned Cambodia approximately US$237 million in soft loan deals and canceled US$89 million of Cambodian debt to China. Such cooperation has sustained the economic growth of Cambodia and also assisted Cambodia to broaden its market globally.
Infrastructure projects are regarded as the BRI’s most important undertaking, with many such of projects in Cambodia aiming to improve the people’s livelihood. These include the Sihanoukville Special Economic Zone, Phnom Penh-Sihanoukville Expressway and the Morodok Techo National Stadium. The Morodok Techo National Stadium, for instance, has enabled Cambodia to host the SEA Games 2023 successfully. Among the upcoming projects are new international airports for Siem Reap and Phnom Penh, a future expressway connecting Phnom Penh and Bavet, bridges as well as roads.
People-to-People Exchange
The BRI has also paved the way for more people-to-people exchange between the two countries. Scholarship programs, cultural exchange, tourism and cooperation in the health sector are among the manifestations of the BRI in Cambodia.
The scholarship programs, for example, have provided thousands of Cambodians with the opportunity to pursue higher education in China, improving Cambodia’s human resource potential and the competitiveness of Cambodian students. Currently, about 2000 Cambodians have received such scholarships.
The BRI has also brought many Chinese tourists to Cambodia which boosts local tourism industry and opens employment opportunities. The establishment of direct flights between the two countries has supported for this. In 2019 alone, two million tourists from China generated around US$1.8 billion in revenue for Cambodia. The Covid-19 pandemic disrupted this flow of people and cash but the two governments are still actively promoting two-way travel nonetheless, with Cambodia expecting to attract one million Chinese tourists in 2023.
The health sector should be considered as well. During the pandemic, China provided over 20 million doses of Covid-19 vaccines to Cambodia, christening Cambodia as the world’s most vaccinated country. China also provided medical team assistance to manage the pandemic as well, facilitating a quick reopening of the country’s economy.
Geopolitical Advantages and Disadvantages
The BRI has also provided geopolitical advantages to Cambodia. The expansion of Chinese influence has provided a check to the United States’ decades-long effort to become the sole influential superpower in the region. Spooked by this, the United States has responded by promoting the Build Back Better World Initiative (“B3W”), President Joe Biden’s counter to the BRI that he brewed with other G7 countries. From a macroscopic view, such a competition of strategic development plans allows Cambodia and Southeast Asia to reap benefits from both sides.
Moreover, the expansion of Chinese influence in Cambodia has brought significant security ties between the two countries. China has provided various forms of security equipment assistance to Cambodia and aimed to assist the nation in developing its military base. For instance, the Chinese government provided a military training program, weapons and military equipment. China recently provided support for Cambodia to expand and improve its Ream Naval Base, which enhances Cambodia’s capability but making the United States nervous over Cambodia’s apparent gravitation towards China’s orbit.
However, some disadvantages cannot be overlooked. Regardless of the benefit of the competition between China and the United States, Cambodia, like other Southeast Asian states, is increasingly getting to a point where it would be forced to choose a side, which is a risk to the region and the country’s geopolitical stability.
For instance, Cambodia has been encouraged by the United States to maintain its independent and balanced foreign policy for the sake of the Cambodian people’s interest. With both the United States and China trying to cast influence on Cambodia, with varying degrees of success, Prime Minister Hun Sen has been forced to iterate that Cambodia will remain neutral and not choose between the two.
Cambodia should also be aware of the need to maintain neutrality and assure ASEAN centrality in this growing climate of global power contest, ensuring regional cooperation to offset the possible implication of geopolitical tension in the region. While Cambodia needs China for the sake of national interests and development, the country must also guard against the undue influence that could undermine its national sovereignty.
Moreover, massive infrastructure projects ushered by the BRI could lead to a debt crisis for small states like Cambodia. It should be noted that the infrastructure development in Cambodia is not free but a loan that China offers in the long term. Currently, Cambodia owes China around US$4 billion and this figure will continue to grow as long as Cambodia keeps approving Chinese development plans.
The onus is now on the Cambodian government to manage its humungous debt to China properly. Neighboring Laos, in comparison, owes China US$12.2 billion, or half of its foreign debt, at the time when it is facing a shortage of foreign reserves while not yet being able to service its debt to China, plunging the nation to a debt crisis and a state of national emergency.
Cambodia should consider Laos as a cautionary tale and reminder to exercise good governance when handling Chinese financial loans and projects. This can be done by prioritizing anti-corruption agenda, improving transparency and ensuring accountability.
Conclusion
In conclusion, Cambodia should embrace the BRI due to the positive benefits in terms of infrastructure development, economic development, people-to-people exchange and some geopolitical advantages. The country, however, must exercise caution as to the potential geopolitical disadvantages – rising from the intensification of US-China rivalry – and the loss of national sovereignty due to China’s undue influence.
Indeed, the BRI has benefited Cambodia tremendously, yet it must remain neutral and enhance regional cooperation with the rest of the Southeast Asian states to mitigate the risks of the superpowers’ rivalry. Additionally, Cambodia must also be aware of the risk of a debt crisis that might transpire from bad management of Chinese investment.
