New numbers on China's Cambodia aid

By Milton Osborne - 19 September 2012
The Interpreter

In my post of 17 July I suggested that it was no surprise Cambodia acted as China wished in relation to the South China Sea issue at the time of the ASEAN Ministerial Meeting held in Cambodia.

Given Chinese aid, it was always likely that Cambodia would balk at agreeing to a joint communique that, in effect, was critical of China. While critics of Cambodia's actions referred to it as China's 'puppet' or 'pawn', far too little attention was given to just how large China's aid to Cambodia, particularly relative to other sources.

For many years it has been difficult to quantify the exact size of China's aid, but a new assessment from the Washington-based Center for Strategic and International Studies draws attention both to the size and the relative importance of the aid by comparison with that received from other donors:

China offers Cambodia $2.5 billion in investments and soft loans.

Chinese prime minister Wen Jiabao pledged to give Cambodia $500 million in loans for infrastructure projects following a September 1­2 visit to China by Cambodian prime minister Hun Sen. China also approved a $2 billion industrial park project that would produce 3 million tons of steel per year and employ up to 10,000 Cambodians. Chinese investment in Cambodia totaled $1.9 billion in 2011, more than double the investment by all ASEAN countries combined and 10 times that by the United States. Cambodian officials rejected speculation that the aid was a Chinese thank-you for Cambodia's support for China on the South China Sea, parts of which are disputed between China and four of Cambodia's Southeast Asian neighbors.

Cambodia Says No Strings Attached in Recent Chinese Aid

Chinese Premier Wen Jiabao, right, with Cambodian Prime Minister Hun Sen during their meeting in China on Sept. 2. (Associated Press)

September 6, 2012
By Patrick Barta
The Wall Street Journal

China has done a lot to support Cambodia over the years with millions of dollars in aid, loans and investment. But after reports this week that China has pledged another $500 million in soft loans and grants—and publicly thanked Cambodia for its support in Southeast Asia—Cambodian officials want to be sure no one suspects the little country is falling too much under China’s sway.

Cheam Yeap, chairman of the Commission on Economy, Finance, Banking and Audit at the Cambodian National Assembly, said China’s loans have nothing to do with Cambodia’s recent support for China in disputes involving the South China Sea, parts of which are claimed by China and several Southeast Asian states. That backing includes a now-famous episode in July when members of the Association of Southeast Asian nations failed to reach a consensus on how to resolve conflicts in the sea at their latest summit in Phnom Penh, failing even to issue their customary joint communiqué at the end.

Representatives from the Philippines and other nations blamed Cambodia for resisting any agreement that would embarrass China, which has long indicated its desire to negotiate settlements in the South China Sea on a bilateral basis, away from multilateral forums.

The latest loans are just “encouragement from China’s premier Wen Jiabao” Mr. Cheam Yeap said, adding that China doesn’t ask for anything in return. Rather, China just “sees that Cambodia is in need for [money] to develop the country,” he said. “This is not the first time that China has provided concessional loans to Cambodia.”

US, China jockey for influence with ASEAN [-The US thanks Indonesia rather than Hun Xen]

Wed, September 05 2012
Bagus BT Saragih, The Jakarta Post, Jakarta

As US Secretary of State Hillary Clinton wrapped up her mission in Jakarta to enhance ties with the Association of South East Asian Nations (ASEAN) and bolster the grouping’s role in the South China Sea spat, China pledged to give Cambodia US$500 million in loans and grants as a token of gratitude for Phnom Penh’s move in accommodating the Asian superpower’s interests in the region.

Clinton concluded her state visit to Indonesia by making a courtesy call on President Susilo Bambang Yu-dhoyono and paying a visit to ASEAN headquarters in South Jakarta.

In her meeting with Yudhoyono, Clinton discussed the South China Sea issue as well as Indonesia’s key role in ASEAN toward producing a peaceful resolution with China regarding the conflicting territorial claims.

“On the latest developments in the South China Sea, Secretary of State Clinton expressed the US’ appreciation for Indonesia’s role, particularly having managed to retain ASEAN unity. Indonesia and the US have agreed to push for a code of conduct within the zone, particularly ahead of the ASEAN and East Asia summits in Phnom Penh in November,” Marty, who accompanied Yudhoyono at the meeting, told a press conference at the Presidential Office on Tuesday.

Cambodia's ASEAN help leads to Chinese aid [-Payout time for Comrade Hun Xen...]

Wednesday, September 5, 2012
By Prak Chan, Reuters

PHNOM PENH -- China has pledged more than US$500 million in soft loans and grants to Cambodia and Prime Minister Wen Jiabao thanked it for helping Beijing maintain good relations with the regional grouping ASEAN, a Cambodian junior minister said.

A summit of the 10 members of the Association of Southeast Asian Nations (ASEAN) in July failed to issue a joint communique for the first time in the group's 45-year history after disagreement over the wording of a section on territorial claims in the South China Sea.

Cambodia, which chairs ASEAN meetings this year, was accused by some countries in the group of stonewalling in support of its ally, China.

The South China Sea has become Asia's biggest potential military flashpoint. China's claim over the huge area has in particular set it against ASEAN members Vietnam and the Philippines.

After the [South China Sea] stick, now comes the Chinese carrot for Hun Xen

Cambodian PM's visit aims to enhance ties with China

Xinhua | 2012-9-3

• [Hun Xen] asked China to consider lending Cambodia between 300 to 500 million US dollars a year 
• Ding Liguo, executive chairman of the board of Delong Holdings Group, told [Hun Xen] that the firm planned to invest 2 billion US dollars in an industrial zone and a steel plant in Cambodia.

The two-day visit of Cambodian Prime Minister Hun Sen to China had brought closer relations and cooperation in politics, economics, trade, investment and health between the two countries, said a Cambodian senior official on Monday.

Hun Sen visited Urumqi of Xinjiang Uygur Autonomous Region in northwest China on Sept. 1-2 in order to attend the 2nd China- Eurasia Expo.

Speaking to reporters at Phnom Penh International Airport on Monday upon the premier's return from China, Secretary of State for the Ministry of Economy and Finance Aun Porn Moniroth said that during in Urumqi, Prime Minister Hun Sen met with Chinese Premier Wen Jiabao on Sept. 2.

"The talk was held in a close and deep atmosphere with the spirit of friendship and close cooperation," he said.

In the meeting, Wen pledged to continue helping Cambodia in developing physical infrastructures, which are the key elements for social and economic development, he said.

Analysis: China's sway over Cambodia tests Southeast Asian unity

Sunday, 12 Aug 2012

PHNOM PENH (Reuters) - Students in their twenties sit behind old wooden desks in Cambodia's capital, Phnom Penh, scribbling away as a teacher barks out phrases in a foreign language above the roar of motorcycles outside.

Unlike in most other countries in the region, the students at this private language school and others nearby are not learning English -- it's Chinese.

Along the street, signs with golden Chinese letters on newly painted red-and-yellow buildings offer cheap crash courses in Mandarin.

"Before, people came to this area to study English but now it's Chinese," said Gua Fa, a teacher and manager of the Ming Fa Chinese School. "The students all want to be tour guides, Chinese translators, or work in banks and restaurants."

It's another sign of China's growing influence in Cambodia, something that is upsetting the unity of the 10-member Association of Southeast Asian Nations (ASEAN).

Investment from China vital for Cambodia's economy

2012-08-06
Xinhua

PHNOM PENH -- Investments from China and other foreign countries are very important to spur Cambodia's economic development, Heng Samrin, President of Cambodia's National Assembly, said Monday.

His remarks were made during a meeting with Cheng Zhaohong, general manager of Shandong Shantui Construction Machinery Import- Export Company, on the occasion that the firm opened a branch in Cambodia.

Heng Samrin said that the presence of Shantui Company in Cambodia reflected Chinese investors' trust on Cambodia's political stability and favorable business environment.

Thitinan vs Cambodian Ambassador [M'am You Ay]

Jul 30, 2012
By Bangkok Pundit
Asian Correspondant

Thitinan had an op-ed on Friday in the Bangkok Post entitled “China, US widen Asean rifts”. The Cambodian Ambassador responds in a letter to the editor in the Bangkok Post. BP has excerpted some of the choice insults:

I wish to clear up some points of misperception written by Thitinan Pongsudhirak in the opinion section of the Bangkok Post on July 27 entitled “Asean rifts widen as China, US rivalry grows”.

First, those who said the Peace Palace was ”funded and adorned by Chinese arts” are simply ignorant people.

…

Second, the assertion that China has become an ”open patron state of Phnom Penh” with more than US$10 billion (310 billion baht) in aid and investment is purely insulting.…

Third, the allegation that Cambodia ”shared the draft version of the joint statement with the Chinese, who then vetoed it” is extremely disparaging and slanderous. Those who make such scathing remarks against Cambodia have no other intention than to defame Cambodia’s credibility.

When and where did Mr Thitinan obtain this information, or did he copy it blindly from one other journalist without credible facts to substantiate their allegations? Or is it a deliberate smear campaign against Cambodia?

…

The answer is clear: these two Asean countries had their own hidden plan to sabotage the AMM and made the JC a hostage of their bilateral disputes.

BP: She obviously went to the Kasit School of Diplomacy. Interestingly, the words “incorrect” and “wrong” do not appear once in the Ambassador’s letter. Perhaps, their usage may have been a better way to convey the point….

M'am You Ay fielding another reply to the Bangkok Post

Ambassador replies

30/07/2012
Bangkok Post

I wish to clear up some points of misperception written by Thitinan Pongsudhirak in the opinion section of the Bangkok Post on July 27 entitled "Asean rifts widen as China, US rivalry grows".

First, those who said the Peace Palace was ''funded and adorned by Chinese arts'' are simply ignorant people.

The building's construction was fully funded with the national budget of Cambodia and its internal adornments reflect quintessential Khmer ancient art forms.

The building was designed and built by young Cambodian architects and engineers. China provided assistance only for the construction of the adjacent building and not the Peace Palace.

Why ASEAN can't unite

By Milton Osborne - 27 July 2012
The Interpreter

Hugh White says it is difficult to imagine Indonesia putting its relations with China at risk by supporting Vietnam over its claims in the South China Sea. This focuses attention firmly on an issue that used to be debated frequently but now seems to have been forgotten (or is it just that to do so is thought to risk causing offence?): how united is ASEAN and does it risk being little more than a talking shop?

To ask the question is not to suggest ASEAN in its collective identity is unimportant, nor to suggest that the problem that emerged at the recent Ministers' Meeting in Phnom Penh, when the members of ASEAN could not agree to issue a communiqué, is without significance. But what happened in Phnom Penh underlines the fact that ASEAN in its present form does not prevent substantial disagreements between its members.

Indeed, particularly with the membership of the three 'Indochinese' states, it seems more likely than not that there will be important issues where agreement will not be achieved. As I suggested in my post last week, Cambodia's readiness to hew to China's wishes in relation to the South China Sea was entirely predictable. And I see no reason to expect that Cambodia, while Hun Sen remains in power, will do other than act with concern to take the fullest account of Chinese interests.

China’s Coercive Economic Diplomacy

Chinese willingness to use economic leverage to settle international disputes in its favor is a worrisome trend.

July 25, 2012

By Bonnie S. Glaser

The Diplomat

When the 10 member nations of ASEAN failed to reach agreement on the wording of a joint communiqué for the first time in 45 years, most pundits blamed this year’s ASEAN chair, Cambodia, for failing to forge a consensus. Behind Phnom Penh’s passivity, however, was pressure from Beijing to keep any mention of the South China Sea, especially the recent faceoff between China and the Philippines in the Scarborough Shoal, out of the final statement. That the Chinese had sway over Cambodia should not come as a surprise. Beijing has provided billions in aid to Cambodia. In 2011 alone the amount of foreign investment pledged to Phnom Penh by China was 10 times greater than that promised by the United States.

For more than a decade, China has pursued a strategy in Southeast Asia that relied heavily on economic carrots to increase the stake of the Southeast Asian countries in maintaining good relations with China. The China-ASEAN FTA, Chinese foreign direct investment, foreign assistance, and trade have all been used to encourage countries to consider Beijing’s interests when formulating policies and eschew actions that China would view as objectionable. In the past few years, however, China has directly used economic relations to compel target countries to alter their policies. And this growing trend is worrisome.

The most recent target of the employment of economic measures by China for coercive purposes was the Philippines, which on April 10 sent a navy frigate to investigate the sighting of Chinese fishing boats in the lagoon of Scarborough Shoal, well within the Philippines’ 200-nautical mile Exclusive Economic Zone. After an armed boarding party discovered giant clams, coral, and live sharks aboard the boats, an attempt to arrest the fisherman was thwarted by two civilian China Maritime Surveillance vessels that arrived on the scene. The Philippines withdrew the frigate and replaced it with a Coast Guard Cutter. China dispatched an armed Fishery Law Enforcement Command ship to reinforce its sovereignty claim. The standoff continued for over a month.

Sacrava's Political Cartoon: Paper Tiger

Cartoon by Sacrava (on the web at http://sacrava.blogspot.com)

Koy's letter to the Post [-Cambodia is not a proxy of our Chinese "master" (sic!!!)]

Asean Members ‘Must Unite or Fall’

Indonesian Foreign Minister Marty Natalegawa addressing the United Nations in New York on Sept. 24, 2009. (Photo: CTBTO Conference)

THE JAKARTA GLOBE | July 24, 2012

Even though Asean finally managed to come out with a joint statement following its regional summit last week, a fickle unity will continue to undermine the grouping as long as it fails to address domestic problems in each of its member states, observers have said.

Aleksius Jemadu, dean of Pelita Harapan University’s School of Social and Political Sciences, said that as long as China and the United States could help Asean countries more than they could help themselves, the regional bloc would always face the threat of disunity.

“We can see it clearly in Cambodia’s case,” he said. “[Prime Minister] Hun Sen needs China’s help in developing Cambodia’s economy while Asean offers nothing in regards to this issue. That’s why they will reject any statement they think will make China angry.”

The same is true for the Philippines and the United States, he said.

Meltdown for Asean over South China Sea [... so much for Cambodia being the ASEAN chair]

Marty takes to the skies

Indonesian diplomats scurry across region attempting to put the pieces back together

Wednesday, 18 July 2012

Asia Sentinel

The combination of aggressive Chinese jawboning and Filipino pride are combining to create a diplomatic crisis in the Association of Southeast Asian Nations that Indonesia is trying desperately to untangle.

The squabble has sent Indonesian Foreign Minister Marty Natalegawa, who previously called the Phnom Penh deadlock “perplexing” and “very, very disappointing,” flying on a diplomatic mission across the region to attempt to find support for a common position on the South China Sea issue.

Senior diplomats and political figures involved with Asean are growing increasingly concerned that the 10-member alliance has become polarized, with the Philippines and Vietnam squaring off against China and Cambodia essentially doing Beijing’s bidding. Political insiders in Kuala Lumpur say Malaysia has quietly tilted towards Beijing.

Asean Woes Signal Cambodian Shift Toward China, Analysts Say

It was the first time in 45 years the bloc of 10 Southeast Asian nations failed to issue a joint statement at the end of a meeting.

18 July 2012

Sok Khemara, VOA Khmer

China has given billions of dollars in aid to Cambodia in recent years, making it the top donor.

WASHINGTON DC - Asean’s failure to sign a joint communique following meetings last week was due to Cambodia’s close siding with China, shunning its traditional ally, Vietnam, analysts say.

It was the first time in 45 years the bloc of 10 Southeast Asian nations failed to issue a joint statement at the end of a meeting, highlighting growing pressure within the grouping.

Phat Kosal, a researcher of Asian affairs at the University of Southern California, said Cambodia needs China’s aid to help it climb from poverty.

There will be “resentment” from Vietnam, he said, “but it does not break [the relationship] in the future, because Vietnam knows that Cambodia cannot do anything, as it is under the strong pressure of China, and because Cambodia needs assistance to solve its economic problems.”

Cambodia as divide and rule pawn

Jul 18, 2012
By Sebastian Strangio
Asia Times Online

PHNOM PENH - The official theme for Cambodia's chairmanship of the Association of Southeast Asian Nations (ASEAN) is "One Community, One Destiny" - but the outcomes of this year's meetings highlighted the bloc's growing divisions on the issue of China.

Last week in the Cambodian capital, the Foreign Ministers' meeting came to an acrimonious end when delegates from the 10-member bloc failed to issue their customary joint communique - the first time they have failed to do so in ASEAN's 45-year history - after disagreements over the territorial disputes in the South China Sea.

China claims sovereignty over most of the resource-rich sea, but four ASEAN nations - the Philippines, Vietnam, Malaysia and

Brunei - have advanced competing claims. Last week's meetings were overshadowed by a flare-up over a group of islands known as the Scarborough Shoal, a fish-rich reef claimed by both China and the Philippines. The two countries had a military stand-off over the shoal earlier this year, sending ships to the area.

ASEAN Concludes, Exposing S. China Sea Rifts

Cambodian Foreign Minister Hor Namhong speaks at the closing ceremony of the 45th Association of Southeast Asian Nations (ASEAN) Foreign Ministers' Meeting in Phnom Penh, Cambodia July 13, 2012.

July 13, 2012
Irwin Loy
Voice of America

Thayer says the issue may have exposed a rift among the ASEAN countries that have territorial disputes with China, and those that rely on China for trade. Cambodia has received hundreds of millions of dollars in soft loans and investment from China.

PHNOM PENH – Southeast Asian foreign ministers have failed to hammer out a joint statement summarizing key regional meetings this week. Members of the Association of Southeast Asian Nations stumbled over how to deal with a simmering dispute in the South China Sea. The unprecedented impasse has left some officials pointing a finger at chair Cambodia, and it raises questions on the cohesiveness of the 10-member bloc.

ASEAN’s failure to compile a basic statement has brought this week’s usually secretive back-room discussions to the forefront. As the meetings concluded on Friday, the Philippines blamed the impasse on Cambodia, which holds this year’s chair of the regional bloc.

​​The Philippines, one of four ASEAN claimants to the South China Sea, wanted the joint communique to include mention of discussions regarding the Scarborough Shoal, a set of disputed islands in the body of water.

Chinese Schools a Hit in Cambodia

A Chinese school in Phnom Penh, July 20, 2009.

As trade and tourism links with China grow, more Cambodians are seeking Chinese-language education.

2012-04-25

Radio Free Asia

Chinese schools are booming in Cambodia, locals say, as parents seek a leg up for their children amid growing business opportunities with China, the country’s largest trading partner and major aid provider.

More Cambodian parents are sending their children to be educated in Chinese because they see it as a key language for business in Cambodia’s future, said Chea Chengkhun, the principal of a Chinese school in Phnom Penh.

“The language will help to develop this country. It will also help our economy. We will have better living standards because we know Chinese,” he said.

He said Chinese schools like his are becoming popular and there are now about 70 to 80 nationwide, with 50 to a few hundred students each.

Hun Sen: we won’t be bought [...'cause we are already paid in full by China!!!]

Prime Minister Hun Sen delivers a speech to the ASEAN delegates during a press conference yesterday afternoon. (Photo by Meng Kimlong)

Thursday, 05 April 2012
Shane Worrell with additional reporting by Cheang Sokha
The Phnom Penh Post

After a week of global media reports dissecting Cambodia’s relationship with China, Prime Minister Hun Sen had apparently had enough yesterday – lashing out at the media and analysts he termed “crazy” in what proved an unexpected conclusion to the 20th ASEAN Summit.

The premier spent a good part of the concluding press conference defending his government from claims that China was buying its support.

“Cambodia is not [being] bought by anyone (sic!),” he said, referring to the millions of dollars in loans and aid Chinese President Hu Jintao pledged on Saturday.

Hun Sen went on to praise China at length for “saving” the ASEAN economy in 1997 and showing generosity to Europe during the 2008 economic crisis, but insisted he had never felt pressure from Chinese leaders to “do this or do that”.

That, of course, was precisely the suggestion of some analysts, who posited that last weekend’s visit by Hu had been made with the intention of enlisting Cambodia’s aid in squelching debate on the controversial South China Sea issue.