Cambodia is China’s leverage point on ASEAN

Author: Davis Florick, Missouri State University

Chinese interference has negatively impacted Cambodian politics and allowed Prime Minister Hun Sen to lean more fully into authoritarianism. As illiberalism calcifies in Cambodia, the country grows further isolated from the international community — making it further dependent on China and unlikely to escape Beijing’s influence in the short- or medium-term.

Sen has pursued authoritarian methods to maintain political control. During the 2018 parliamentary elections, his Cambodian People’s Party won all 125 seats. In April 2020, Sen used COVID-19 to justify enacting a new law on ‘national security and social order’ that has been used to detain individuals that release information which could be used to disparage the government’s handling of the pandemic.

With each authoritarian step, Sen has further isolated himself from the United States, the European Union, Japan, South Korea and many non-governmental organisations with operations in Cambodia. This has forced Sen to become reliant on China for support. Over the last three decades, whenever Sen had opposition politicians arrested and the international community cut aid, China filled the financial gap. Prior to Sen’s unanimous election victory in 2018, China’s ambassador to Cambodia even attended one of his political rallies to demonstrate support.

From 1994–2014 China provided nearly 44 per cent of Cambodia’s total foreign direct investment. In the last decade, China pledged over US$2 billion worth of foreign investment to Cambodia. Examples of Chinese financial assistance during this period are US$600 million in aid and loans in 2012, US$100 million for defence spending in 2018, US$351 million for a 47 kilometre road in Phnom Penh in 2018, and concessional loans to support a new international airport and a 190 kilometre expressway from Phnom Penh to Cambodia’s coastline.

Cambodia’s debt to China accounts for more than 25 per cent of its GDP, with some estimates placing the figure close to 40 per cent. These loans are generally set at an interest rate of 2–3 per cent. This is in contrast to the zero per cent interest rate loans most bilateral or multilateral creditors offer to developing countries. These loans are often due quicker than loans from multilateral creditors.

Cambodia pays back China in other ways, too. For example, Cambodia has repeatedly undermined ASEAN unity on the South China Sea. China now hopes to complete the South China Sea Code of Conduct on its terms. When Cambodia becomes ASEAN chair in 2022, Beijing will likely attempt to gain favourable treatment. Domestically, Prime Minister Sen violated his own national laws by giving China control over 20 per cent of Cambodia’s coastline in a secret deal to support the Koh Kong port project.

Many of China’s physical capital investments have occurred near Cambodia’s Ream naval base. This facility on the Gulf of Thailand appears to be a focus of China–Cambodia cooperation. Almost half of the base is managed by China. Two facilities the United States helped pay for have been torn down and replaced with new buildings and roads, as well as a potential deep water structure, despite lacking the naval assets that would warrant this capacity. Instead, Cambodian defence ministry officials have said deep water and repair facilities are needed for vessels Ream may host in the future. In response to China’s growing military influence in Cambodia, on 8 December  the US embargoed all arms exports and is restricting dual-use technologies to Cambodia.

Phnom Penh’s willingness to block ASEAN policymaking has alienated Cambodia from some of its most influential regional counterparts and Cambodia’s growing reliance on China risks isolating it further from Southeast Asian states like the Philippines, Singapore, Thailand and Vietnam. Some officials in the region have suggested that ASEAN cannot continue to function if its rules continue to provide Cambodia with veto authority.

Concerned over Sen’s repression, the European Union let its ‘Everything but Arms’ agreement with Cambodia expire last year. EU tariffs have increased on Cambodian products precisely when Phnom Penh cannot afford it. The US–Cambodia relationship has also suffered due to Cambodia’s poor human rights record and engagement with China.

Beijing now is Phnom Penh’s last resort, giving Sen credibility on the international stage and much needed defence assistance. In return, Cambodia is China’s leverage point inside ASEAN and allows it to press its political and military claims in Southeast Asia.

Cambodia’s increasing reliance on China for economic assistance has not come without cost. In this case loans appear to be linked to Cambodian diplomatic and defence cooperation. Chinese access to the Ream naval base would provide China a waystation in the Gulf of Thailand, which could be used to support naval operations in a crisis. Even if Cambodia wanted to, it will be difficult to walk away from China in the foreseeable future.

Davis Florick is a PhD candidate in the Department of Political Science, Missouri State University.

The views expressed are the author’s and do not represent official U.S. Government or Missouri State University positions.

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