PHNOM PENH – It’s commonly said that Cambodia is one of China’s most unwavering allies and partners. But that might quietly be changing as the Southeast Asian nation becomes more and more dependent on the superpower.
Cambodia’s government wants to realign back towards the United States and Europe over concerns it has become too reliant on Beijing, according to sources familiar with the situation. The shift comes as Phnom Penh focuses on stabilizing economic growth ahead of a major political succession that is expected to happen next year, the same sources said.
Despite a clear deterioration in diplomatic relations in recent years, the United States is still Cambodia’s largest export market. US-Cambodia bilateral trade rose by 33% last year and 47% in the first seven months of this year, according to Cambodian government data.
At the same time, Cambodia-China trade rose 37.3% in 2021 but Phnom Penh’s trade deficit with China widened to US$8.1 billion from $6 billion in 2020, according to Cambodian Ministry of Commerce figures.
“We want to be less reliant on China,” a mid-ranking government official bluntly told Asia Times.
But what Phnom Penh wants and what is possible is another matter, with some analysts and observers reckoning that Cambodia is now so deep in China’s orb that it cannot readily or easily extract itself to realign with the West.
To be sure, nobody expects Cambodia to sideline China. Just this month, the two sides signed a $1.6 billion deal to build Cambodia’s second expressway, connecting the capital Phnom Penh to Bavet on the Vietnamese border.
The deal comes just months after the opening of the $2 billion China-built expressway between Phnom Penh and Sihanoukville, a coastal hub for Chinese investment. An MoU signed this month will see the Chinese language taught in Cambodian secondary schools.
But Cambodia’s authoritarian leader Hun Sen surprised many this year when he co-sponsored UN General Assembly resolutions that condemned Russia’s invasion of Ukraine, motions on which Moscow ally China abstained.
Making his first presidential visit to Southeast Asia for a regional summit hosted by Phnom Penh last weekend, US President Joe Biden thanked Hun Sen for his work on the UN resolutions.
And it was in Phnom Penh last Sunday that the Association of Southeast Asian Nations (ASEAN), which Cambodia chairs this year, formally elevated ties with the US to a “comprehensive strategic partnership,” the same level that China was upgraded to last year.
“Cambodia’s decision to incorporate some items from the drafts of the East Asia Summit’s joint leaders’ statement, which was not released because of Russian objections, in its own chairman’s statement is a slight signal to the United States of Phnom Penh’s intentions,” said Charles Dunst, an associate at The Asia Group, a strategic advisory firm.
Hun Sen last visited Beijing to meet with Chinese President Xi Jinping in February 2020, before the Covid-19 pandemic struck Cambodia. Since Xi clenched a third presidential term last month, only Vietnam’s communist chief and German Chancellor Olaf Scholz have visited Beijing. There appear to be no plans, so far, for Hun Sen to make a trip.
It’s unclear exactly how much China has invested in Cambodia since 2013 when Beijing launched the Belt and Road Initiative but some estimates put it around $15 billion by 2017. The figure is likely much higher today.
“Cambodian’s foreign policy towards the US and European countries are the same as in the past and it does not mean to protest against China or other countries,” reckons Sam Seun, a political analyst at the Royal Academy of Cambodia
“The government of Cambodia just tries to balance their foreign policy towards her requirement in social and country development because the US’s and EU’s markets are the most crucial for Cambodia to sell its products,” he added.
But that’s far from the case. Heavily reliant on the West following the end of the country’s three-decade civil war in the 1990s, Cambodia’s relations with the United States and Europe have deteriorated considerably after 2017.
That year, Cambodia’s government forcibly dissolved its only real political rival, the Cambodia National Rescue Party (CNRP), on the spurious accusation it was plotting a US-backed coup.
It unilaterally canceled joint military drills with the US and began training with the Chinese military instead while it banned several US Congress-funded organizations with operations in the country.
The ruling Cambodian People’s Party’s (CPP) lurch toward a de facto one-party state, when the US had expensively tried to foster democracy in the country since the 1990s, was viewed by many in Washington as an explicit rejection of a US partnership by the Cambodian government.
Ostensibly for corruption allegations, Washington responded with targeted sanctions on high-ranking Cambodian officials, including the navy chief Tea Vinh, a brother of Defense Minister Tea Banh. A member of Hun Sen’s own bodyguard unit was also sanctioned. Cambodia’s place in America’s preferential GSP trade scheme hasn’t been updated since it expired in 2021
The European Union partially cut Cambodia’s trade privileges the previous year over democratic deterioration in the country. A French court is currently investigating allegations that Hun Sen was linked to a grenade attack in 1997 that killed 16 people.
Relations with the US have principally soured over Washington’s accusations that Cambodia intends to give China exclusive use of its Ream Naval Base, the nation’s largest. Phnom Penh has vehemently denied this for years.
But Chinese contractors are currently redeveloping parts of the base, near Sihanoukville, but the Cambodian government denied US requests to help finance the development.
Biden raised the issue again when in Phnom Penh last weekend in his talks with Hun Sen and “underscored the importance of full transparency about activities by the PRC military at Ream Naval Base,” the White House said in its statement.
Claims that Phnom Penh wants to pivot back to the West aren’t new. Phnom Penh has been saying as much for years. But they have taken on urgency until recently for several reasons, which some analysts reckon signifies a new genuineness by the Cambodian government.
Public opinion is far from positive about Chinese influence in Cambodia. Although certain Chinese investment projects have been warmly received by ordinary Cambodians, such as the new China-built expressways, for the most part there has been a widespread backlash as crime and social disorder have often followed Chinese investment, especially in cities like Sihanoukville. The city has been dubbed a “Chinese colony” by Cambodians for years.
Because of a spike in disorder, Hun Sen’s government outlawed online gambling in 2019. Within weeks, an estimated 120,000 Chinese nationals left the country. The largest cohort of foreign visitors, Chinese nationals have stayed away because of the Covid-19 pandemic.
This year, Cambodian authorities initiated a new crackdown on gambling sites and Chinese-run firms after a series of media reports highlighted widespread human trafficking and modern-day slavery at Cambodia’s casinos.
Beijing says it will assist the Cambodian authorities in punishing the culprits, but this is again likely to impact the Chinese-dominated gambling sector, the main draw for Chinese tourists.
“Many senior Cambodian officials genuinely want improved ties with the United States, believing that their country has aligned too closely with China,” said Dunst.
This is essentially a practical decision, he added. “Why align with China when you can balance Beijing and Washington and extract economic benefits from both?”
Cambodia’s economy is in relatively good health. The Asian Development Bank said this week that it expects it to grow by 5.3% in 2022 and around 6.2% next year. But while China dominates investment, America’s allies dominate trade.
Vietnam – which is engaged in disputes with Beijing over rival claims to territory in the South China Sea – has become Cambodia’s third-largest trading partner this year, after several years of rapid trade growth. Japan, another alleged member of a purported anti-Beijing coalition, is another key trading partner.
And the US itself has become ever more important for Cambodia’s economy. Cambodian exports to the US hit $5.6 billion, up 47.3%, in the first six months of this year, accounting for 41% of all Cambodia’s shipments.
“Now, everything is about trade,” said a Cambodian official. “We want to become richer, but we don’t want geopolitical problems that come with the rivalry between the United States and China.”
It’s also about political succession. Hun Sen, who has been in power since 1985, is planning to soon hand down the prime ministership to his eldest son, Hun Manet, the current military chief who graduated from the elite United States Military Academy at West Point.
The ruling CPP voted in December to accept Manet as the party’s next prime ministerial candidate once his father steps down. Hun Sen could step down as early as next year, some believe.
However, succession will be an arduous process. Some factions within the CPP, particularly apparatchiks allied to Interior Minister Sar Kheng, had opposed Manet’s rise, although it is believed that these officials were hushed during party debates late last year.
Manet has little political experience, having only served in the military and not in the National Assembly. It’s also uncertain how the Cambodian people, a majority of whom have only known a Hun Sen-led government, will respond to a new, likely less dynamic prime minister.
And there’s little way of knowing whether Hun Manet will be as politically astute as his father. Naturally, then, Hun Sen and the younger generation of officials now rising through the ranks feel that the government needs to stabilize Cambodia’s foreign relations and its economic relations before succession takes place.
Making Cambodia even more dependent on China would give a Hun Manet-led government less wiggle room while normalizing relations with the US and the Europeans, the two largest importers of Cambodian goods would stabilize the country’s crucial export industries including garment-making.
As well as Hun Manet’s succession, it is believed that there will be a corollary “generational succession”, with a younger breed of technocratic officials taking over most ministries. Most of these younger officials, Hun Manet included, studied in America or Europe and thus have less of an affinity with China and Vietnam, Cambodia’s other historic partner.
While there’s every reason for Phnom Penh to make this geopolitical realignment back towards a middle path between the US and China, analysts say they are still awaiting a clearer signal that the Cambodian government will make this move.
“There have been no serious signals from the Cambodian side as to any serious shift away from Beijing or any new confidence-building measures with Washington,” said a source who requested anonymity.
Analysts reckon Cambodia would need to make a grand gesture to show its genuine intent. Its offer last year to allow a US defense attache to visit the Ream Naval Base was half-hearted; the US official called off the visit after he was denied access to certain parts of the base. Allowing some measure of US engagement in the base’s redevelopment would be such a gesture.
An American response could be to renew Cambodia’s status in America’s GSP preferential trade arrangement. That might not be consequential since this removes few tariffs for Cambodian exports, but it would be a symbolic gesture.
However, the Biden administration has shown some signs of warming up to Phnom Penh. It included Cambodia when exempting several Southeast Asian countries from tariffs on solar panel exports, which has greatly helped Cambodia’s manufacturing sector.
And Biden’s recent visit to the Cambodian capital was certainly less frosty than when Barack Obama visited as president in 2012. In a goodwill gesture, Biden arrived with the promise of returning dozens of looted artifacts to Cambodia.
There will also be an indication of US opinion during the Senate confirmation process of Robert William Forden, who the Biden administration has nominated as the next ambassador to Cambodia. The incumbent W Patrick Murphy, who some analysts perceive as rather dovish on China, is expected to leave early next year.
“Until something concrete appears, [Cambodia’s interest in realignment] can be written off as just ‘more talk’ from the Cambodian side, seeking to avoid a full break with the States,” a source said, adding that the key question is whether realignment is even possible.
“Beijing’s network in Cambodia … is both very wide and very deep; it might simply be too late,” the source said.
That’s a common view among many analysts. “I’ll believe it when I see it,” said Sophal Ear, associate dean and associate professor at the Thunderbird School of Global Management at Arizona State University.
“Cambodia should be concerned about becoming too reliant on China because that was the case already a decade ago,” he added. “The thing with dependence is that it’s not like you can just dim it down. When you’ve got 44% of your public debt held by China, you don’t just find another creditor who will loan you billions.”
The onus is now on Phnom Penh not to do anything that would further alienate the US. Hun Sen has threatened to dissolve the Candlelight Party, the new main opposition party, but doing so would most likely result in greater censure from Washington. Significantly, Hun Sen has somewhat walked back his threats of dissolution in recent weeks.
If Hun Sen was to allow the opposition party to win some seats in parliament at next July’s general election — it gained around 22% of the popular vote at this year’s local election — then Washington would likely deem the ballot free and fair enough.
Another measure could be whether Hun Sen continues to side with Western opprobrium of Russia at UN General Assembly votes once Cambodia ends its tenure as ASEAN chairman next year. The release of some political prisoners, especially US-Cambodian dual citizen Seng Theary, would be another indicator of Phnom Penh’s intentions.
If the ruling CPP is genuine, then extracting itself from Beijing’s embrace will prove difficult. But it’s also worth asking what Beijing has gained for all the time and money it has invested in Cambodia, which likely runs into the tens of billions. Chinese officials are now, no doubt, lobbying Phnom Penh not to start leaning back toward the West.
Follow David Hutt on Twitter at @davidhuttjourno