Royal University of Phnom Penh

Institute of Foreign Languages

Department of International Studies

IS 409: Foreign Policy II (Cambodia Focus)

Research Report

The 21st Century Chinese Maritime Silk Road: Impacts on Cambodia

Class: E4.2

Group members:

1. MORM Kulkitya

2. THONG Meng David

Lecturer: AN Sokkhoeurn

Academic Year

2014 – 2015

ContentsAbstract.............................................................................................................................................2

Chapter 1: Introduction.....................................................................................................................3

i. Background............................................................................................................................3

ii. Research Questions...............................................................................................................4

iii. Significance of study.............................................................................................................4

iv. Research Methodology..........................................................................................................4

v. Scope and limitations............................................................................................................6

vi. Report structure.....................................................................................................................6

Chapter 2: Literature Review...........................................................................................................7

Chapter 3: Impacts of the 21st Century Chinese Maritime Silk Road on Cambodia’s economy....8

i. Opportunities.........................................................................................................................8

ii. Threats.................................................................................................................................12

Chapter 4: Impacts of the 21st Century Chinese Maritime Silk Road on Cambodia’s security/

defense............................................................................................................................................14

i. Opportunities.......................................................................................................................14

ii. Threats.................................................................................................................................16

Chapter 5: Impacts of the 21st Century Chinese Maritime Silk Road on Cambodia’s Politic and

Diplomacy......................................................................................................................................17

i. Opportunities.......................................................................................................................17

ii. Threats.................................................................................................................................18

Chapter 6: Conclusion....................................................................................................................19

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Abstract

During the official visit to Indonesia in October 2013, Chinese President Xi Jinping made

a shock decision by announcing the creation of “The 21st Century Chinese Maritime Silk Road”.

After the announcement, many countries, especially ASEAN countries, welcomed that ambitious

plan while some other stressed the concern and reluctant to be part of that Silk Road. Thus, this

paper is going to look for the impacts, both opportunities and threats, of “The 21st Chinese

Maritime Silk Road” on Cambodia in terms of Economic development, security/defense, and

politics/diplomacy. Based on the findings, this Silk Road facilitates economic growth in

Cambodia, strengthens Cambodian economic connectivity and integration, and increases

Cambodian people’s income. However, this Silk Road also brings threats to Cambodia by

making the Cambodian economy into risky and under the domination of Chinese products. In

terms of security, this Silk Road enhances Cambodia’s defense sector on sovereignty or territory

and social order while, at the same time, it increases chances of being reduced the military aids

from other countries. Last but not least, in terms of politics, the Maritime Silk Road can

indirectly increase Cambodian Foreign Policy bargaining power due to the significant attention

from other countries to counter China. However, this does have its backdrop because it might

lead to the erosion of Cambodian Foreign Policy autonomy from China.

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Chapter 1: Introduction

i. Background

During the official visit to Indonesia in October 2013, Chinese new President Xi Jinping

made a shock proposal to build “The 21st Century Chinese Maritime Silk Road” in order to

further cooperate with other countries in ASEAN. Under the theme “1 Road 1 Belt”, this

Maritime Silk Road, known shortly as 1 Road, is the initiative complementing to the “Silk Road

Economic Belt”, known as 1 Belt, initiated by President Xi during his official visit to Kazakhstan

in September 2013 (Xinhua, February 2015).

The “21st Century Chinese Maritime Silk Road” uses the system of linked ports and

infrastructure projects to connect Asia and Africa with Europe continent. It starts from cities on

China’s southeastern coast of Fuzhou, to Vietnam, Indonesia, Bangladesh, India, Sri Lanka, the

Maldives, and East Africa. This Maritime Silk Road, then, connects to some countries along the

African coast such as Kenya, Djibouti, Tanzania, and Mozambique before crossing the Red Sea

and Suez canal to the Mediterranean. Finally, 1 Road crosses Athens, city of Greece and meets

with the land-based initiative known as 1 Belt at Venice, city of Italy (Blystone, 20 April, 2015).

. This initiative touches upon six major areas including i) Development connective

infrastructure aiming to build high speed railways, highways and economic corridors along the

Silk Roads, ii) Multifaceted development of connective infrastructure aiming to increase the trade

volume of China covering many sectors, iii) Strategy for greater use of local currencies in cross-

border exchange aiming to make Renminbi as international transactions and reserve currency, iv)

Cultural exchange aiming to promote people-to –people connection and mutual views, v) Cross-

border exchange with government of participating states aiming for policies coordinating and,

lastly, vi) Converting the special bonds and low-cost financing into real money (Rao, May 30

2015).

China claimed that the aims of this Maritime Silk Road are to boost inter and intra-

regional connectivity and trade relations among member countries. However, this initiative has

been viewed as the tool for consolidating China’s hard and soft power. Some elaborated that the

major strategic purpose of this initiative is to restore China’s bad images and relations with its

neighboring Asian countries such as Vietnam and the Philippines which had been damaged

because of the South China Sea dispute. Moreover, such trade ambitious initiative is viewed as to

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counter the American projection power to Southeast Asia, specifically US’s Pivot to Asia (China

U.S. Focus, 4 February, 2015).

Although there are different views on this Silk Road project, after the announcement,

many countries, especially ASEAN countries, welcomed that ambitious plan while some other

stressed the concern and reluctant to be part of that silk road.

ii. Research Questions

The main objective of conducting this research is to find out opportunities and threats that

Cambodia gain from the launch of the 21st Century Chinese Maritime Silk Road.

Research Question:

What are the impacts of the 21st Century Chinese Maritime Silk Roads on Cambodia?

Sub – Research Questions:

[A.] Does the 21st Century Chinese Maritime Silk Road impact Cambodia’ economy?

A.[B.] Does the 21st Century Chinese Maritime Silk Road impact Cambodia’s

security/defense?

B.[C.] Does the 21st Century Chinese Maritime Silk Road impact Cambodia’s politic?

iii. Significance of study

Despites various existing studies on Sino-Cambodia Relations, a few gaps have been

found in those previous researches. First, those studies provided knowledge on Sino-Cambodia

relations, but most of the studies covered a large scope without limiting the timeframe. Thus, this

research study is of paramount important for providing comprehensive knowledge on Sino-

Cambodia Relations in the context of the “21st Century Chinese Maritime Silk Road”.

Second, previous researches did not pay attention to opportunities and threats that

Cambodia could receive from the launch of the Chinese Maritime Silk Roads of the 21st Century

due to the fact that this initiative was just launched less than 2 years ago. This means that

previous researches did not provide comprehensive information on whether Cambodia should

welcome or withdraw apart from this initiative. Hence, this research paper, by studying

opportunities and threats on Cambodia’s economy, security, and politic from this initiative, will

complement previous research studies.

iv. Research Methodology

a. Study Design

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This research paper is the qualitative study with the aims of assessing opportunities and

threats that Cambodia gains from being a part of the new China’s initiative, which is “The

Chinese Silk Road of the 21st Century”. The methodology used for this research study is

Retrospective Study design.

b. Measurement procedure

To conduct this research in a fruitful report, it is important to operationalize some key

terms. Four key terms which are Impacts, Economy, Security, and Politics will be

operationalized. The term “Impacts” refers to any opportunities or threats that Cambodia gains

from being a part of the 21st Century Chinese Maritime Silk Roads. The term “Economy” devotes

to the trade and investment, physical infrastructure, and tourism while the term “Security”

devotes to military assistant. Finally, the term “Politics” in this research paper refers to Foreign

Policy bargaining power.

c. Data Collection

In this study, both primary and secondary sources are employed so that this research can

maintain the originality, reliability, validity, and accuracy of the study. To proceed with data

collection, In-depth Unstructured Interview is utilized for primary data collection as this method

provides flexibility and allows for the extraction of useful information as much as possible from

the interviewees. Six interviewees have been approached to gather primary data for this research

paper. Those 6 interviewees are lecturer Roth Vathana, Cheunboran Chanborey, Chheang

Vannarith, Heng Sarith, Lak Chansok, and Oudom Deth. Moreover, Content – Analysis from

highly discerning sources such as articles, journals, publications from the recognized and

accredited organizations and authors will be used for secondary data collection.

d. Sampling Design

The sampling of this research study is various think – tanks or scholars who have

experiences in this field. This study utilized Non – Probability Judgmental or purposive sampling

design because such sampling design may prove to be effective in the circumstance that only

limited numbers of people, who are think – tanks or scholars, can provide useful primary data.

Moreover, such sampling is low- cost and requires less time to select the interviewees compared

to other sampling methods.

e. Data Collection Process

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In the data collection process, the team members, altogether, went to interview each

interviewee via either face-to-face or Skype in the case that any of those scholars were at abroad.

The interviewees were asked to answer their academic perception regarding “The Chinese

Maritime Silk Roads of the 21st Century” and its impacts toward Cambodia. Once the team

members get all the data from the interviewees and cross-checking them with secondary data, the

analysis part started aiming to answer the sub-research questions and the main research questions.

v. Scope and limitations

Our scope of study will focus only on the period from October 2013 onward. The reason

for choosing such timeframe is that the research topic and questions focus only on the time from

the announcement of the Chinese Maritime Silk Roads of the 21st Century onward. This means

that the timeframe prior to the launch of the Chinese Maritime Silk Road of the 21 st Century is

not deemed necessary in this topic and out of the study scope.

Regarding the dimension of the study, this research paper will look only to the 3

paradigms – Economic, Diplomatic/Politics, and Security/Defense.

Within the research process, two major limitations have been found. One of the main

obstacles of our study is difficulties in reaching the respondents due to the fact that those are

think – tank and scholars who rarely has enough time for us to conduct the interview. Moreover,

due to time and resources constrained allocated for this research, our primary source of data,

mainly the number of interviewees, is too small resulting in the lack of saturation points of

information.

vi. Report structure

This research paper will try to answer the research question in a systematic way by

dividing the whole research paper into 6 paragraphs such as:

Chapter 1: Introduction

i. Background

ii. Research Questions

iii. Significance of study

iv. Research Methodology

v. Scope and limitations

vi. Report structure

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Chapter 2: Literature review

Chapter 3: Impacts of the 21st Century Chinese Maritime Silk Road on Cambodia’s economy

i. Opportunities

ii. Threats

Chapter 4: Impacts of the 21st Century Chinese Maritime Silk Roads on Cambodia’s security &

defense

i. Opportunities

ii. Threats

Chapter 4: Impacts of the 21st Century Chinese Maritime Silk Roads on Cambodia politics and

diplomacy

i. Opportunities

ii. Threats

Chapter 6: Conclusion

Chapter 2: Literature Review

Sino-Cambodia Diplomatic Relations has been officially established since the 1950s,

although, according to many historical documents, Cambodia was proved to have unofficial

relations with China since the 13th century. There have been many documents studying,

separately, Sino-Cambodia Relations. However, all of those studies focus on the benefits and

drawback that either Cambodia or China gets from this bilateral-relations without limiting the

timeframe. None of the previous research focused on Sino-Cambodia relations in the context of

the “21st Century Chinese Maritime Silk Road”.

Chheang (October, 2009) identified bilateral relations between Cambodia and China

based on historical and economic link. In his work, Cambodia-China relations witnessed by the

official visit of Chinese diplomat Zhou Dakun to Cambodia during the 13th century. This relations

have been sustained up until now. Moreover, bilateral relations between these two countries was

also seen through the presence of many Chinese traders and retailers, as estimated 3%-5% of

Cambodia’s population is Chinese ethnic, as well as Chinese-Made Products in Cambodia.

Besides, a handful of studies of Sino-Cambodia relations based on interests can be found.

According to Burgos & Ear (June, 2010), Cambodia is the strategic location for China to exert

greater influence in the region, secure abundant natural resources- both in the land and in the sea,

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and safeguard or launch a response to security threats from Taiwan or South China Sea. Along

with the study of Sigfrido & Sophal, Heng (2012) and Dahley (August, 2013) argued for other

interests of China on Cambodia such as Economic interest: secure natural resources and export

market;, Political interest: support for one China Policy, and Ideological Spread of Chinese

culture. At the same time, various works by Vannarith (September 2014), Sigfrido & Ear (June,

2010), Long (July, 2009), Leifer (January, 1964), and Heng (2012) focused on Cambodia

interests from Sino-Cambodia relations such as Economic interest: trade, investment, donor,

development, infrastructure, and electricity overcome; Political interest: promoting peace,

national reconciliation, diplomatic support, and legitimacy.

Other studies have focused on the major drawback of Sino-Cambodia Relations. Chheang

(September, 2014), Sigfrido & Ear (June, 2010), Ou (03 June, 2011), Heng (2012), and Dahley

(August, 2013) argued for “No Strings Attachments” policy of Chinese government to Cambodia.

Those academicians claimed that No Strings Attachment Policy of Chinese turns blind eyes on

various issues in Cambodia such as the low quality of Chinese development assistance, lack of

transparency and effectiveness, labor abuse, human right violation, livelihood and ecological

disruption of local people et cetera. However, Ou (03 June, 2011) further argued that it does not

come purely without string attachment. In fact, as Ou stated, Chinese trade and investment do

come with string – that are the expecting of free reign in Cambodia both politically and

economically and unconstrained access to Cambodia wealth and natural resources.

Chapter 3: Impacts of the 21st Century Chinese Maritime Silk Road on Cambodia’s

economy

i. Opportunities

The 21st Century Chinese Maritime Silk Road is an ambitious trade initiative by China.

There are many factors pushing China to announce the creation of such ambiguous initiative.

However, in addition to China, other countries, specifically Cambodia, do gain advantages from

this initiative. One of the main aspects that the 21st Century Chinese Maritime Silk Road of Xi

Jinping brings opportunities to member countries lies in the economic paradigm. Within this

paradigm, the first opportunity is the possibility that such ambitious initiative may facilitate

Cambodia’s economic growth. This claim rests on the observations of the inflow of Chinese

investment to Cambodia and trade volume at Sihanouk Ville Autonomous Port. Chinese

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investment in Cambodia has increased since the announcement of this new Silk Roads.

According to Xinhua (20 January, 2014), the investment from China in 2013 was U.S.$427

million, up 62% in compared to the U.S.$263 million. China’s investment projects to Cambodia

have been focused on all sectors such as garment and manufacturing industries, banking and

finance, mining, energy, real estate, tourism, telecommunication, transport, and agriculture.

Moreover, not only investment but also trade volume has been increasing. Container volume at

the Sihanouk Ville Autonomous Port was increased by 19%, from 98 635 Twenty-Foot-

Equivalent Units (TEUs) in the first four months of 2014 to 117 676 TEUs in the same period of

2015. At the same time, Containerized Cargo Tonnage also rose from 1.18 million tons to 1.29

tons, equivalent to 9% increase and oil import increased to 440 070 tons from 410 792 tons,

equivalent to 7% increase (Xinhua, 28 May, 2015). The increase of Chinese investment in

Cambodia and trade volume reflects the positive contribution of Chinese’s investment in the

developing Cambodian economy as Chea Vuthy, deputy general of the Cambodia Development

Council, and Ok Bong, secretary of state at the Cambodian Ministry of Commerce stated in

Xinhua (20 January, 2014). V. Roth (personal communication, June 06, 2015), also support such

argument. According to V. Roth, the 21st Century China Maritime Silk Road is the sea port trade

based initiative. Thus, by being a part of this initiative, Cambodia would be able to increase its

investments and trade volume with China as well as other countries along the Road.

Furthermore, another opportunity Cambodia might gain from being the member of the 21st

Century Chinese Maritime Silk Road is the strengthening of Cambodia’s Economic connectivity

and integration. This new Silk Road is the multidimensional purposes supported by some newly-

created-financial-institutions such as the BRICS Development Bank, the Asian Infrastructure

Investment Bank (AIIB) and the Silk Roads Fund. Those institutions are rich in financial

resources as, for example, the BRICS Development Bank, announced by Brazil, Russia, India,

China, and South Africa in July 2014, partakes 100 billion US dollars as the start-up capital,

AIIB, to be established by the end of 2015, possess the initial fund of $100 billion U.S dollars,

50% of it is from China’s fund, and the Silk Road Fund possess the initial financial contribution

of $40 billion U.S. dollars (Xinhua, 05 March 2015). The latter two, AIIB and Silk Road Fund,

would serve as the major cornerstone for supporting Cambodia infrastructure development since

the aims of AIIB and the Silk Road Fund are to Finance infrastructure development in countries

along the Road, to boost intra-regional and inter-regional connectivity and economic integration

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as well as to complement the role of Asian Development Bank (ADB) and World Bank (WB) in

capital lending. Thus, as the founding member of AIIB, Cambodia must surely benefit from

infrastructure development and regional connections projects such as roads, rail, sea ports,

telecommunication, electricity power grids projects et cetera. Benefits will go more beyond that

as Cambodia, with the support from AIIB and the Silk Road Fund, would be able to concretize its

economic reform agenda and grasp benefits from regional economic integration as well as

strengthen its economic competitiveness (Chheang, 09 April, 2015). Moreover, during the

inauguration of hydroelectric dams in Koh Kong in January 2014, Cambodia’s Prime Minister

HUN Sen stressed that “Lack of Capital is a main obstacle for the developing countries, including

Cambodia, in the development of infrastructure and the Asian Infrastructure Investment Bank

(AIIB) and the Silk Road Fund will fill the shortage” (Chheang, 09 April, 2015). Similarly, VA

Sim Sorya, a spokesman for the Cambodia Ministry of Public Works and Transport, state in

Xinhua (26 March, 2015) that the major challenge for developing Cambodia infrastructure is the

capital and Cambodia hope to get more capital for connectivity development from the AIIB and

Silk Road Fund”. Sorya further added about the slow development of railways and waterways in

Cambodia (Xinhua, 26 March 2015). Thus, as part of the Chinese Maritime Silk Roads, and in

addition to the AIIB and Silk Roads Fund, Cambodia is expecting to get financial support on the

construction of a new railway under the “Pan-Asian High-speed Railway” project linked China to

Myanmar, Laos, Thailand, Cambodia, Malaysia, and Singapore (Yang, 09 May 2014). The

already-operational Singapore-Kunming line runs from China’s southern provincial capital of

Kunming of Yunna China to Vientiane, Capital city of Laos, to Bangkok, Capital city of

Thailand, to Malaysia and ending up in Singapore. However, Cambodia is working with China to

gain financial aid to build a new railway from Phnom Penh to Vietnamese border in order to

complement the missing line of Singapore-Kunming railway (Loeung, 23 January 2014). This

new railway, length about 255 Km with an estimated cost of $686 million U.S, would serve as

the important rail facilitating travel and transportation of goods inside and outside Cambodia. In

the same line, V. Roth & C. Cheunboran (Personal Communication, June 06, 2015) also stressed

the important of the 21st Chinese Maritime Silk Roads in logistical development. Cheunboran

further said that “The $100 billion of AIIB and $40 billion of Silk Road Fund would serve as

financial support for physical infrastructure improvement lacked in Cambodia”.

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In addition to the positive development in Trade/investment and physical infrastructure

improvement in Cambodia, tourism sector is also projected to gain positive sign when Cambodia

engages in the 21st Century Chinese Maritime Silk Roads. This will earn Cambodia the

opportunity to further reduce poverty rate and increase population’s income through the increase

of jobs from tourism sectors. Many tourism experts and officials, for example Thong Khon,

Cambodian Minster of Tourism, Zhao Yily, Chief Strategy officer of Qunar travel agencies in

China, Louk Lennaerts, Chief Visionary Officer of Serenity Holding in Vietnam, and Michael

Parnwell, a professor of Southeast Studies and regional tourism at the University of Leeds,

believe and argue for such ideas since the trend of improving tourism sectors has already been

leveraged after the announcement of the 21st Century Chinese Maritime Silk Roads. Cambodia is

one of the Southeast Asia Countries abundant by touristic sites – both naturally, such as the four

coastal provinces with long white beach, many beautiful islands at Southwestern of the country,

national park, Durian Plantation, waterfall at the Northeastern part of the country, and culturally,

such as Angkor Wat temple, Bayon temple, as well as other marvelous temples our ancestors

have built (Lak, n.d). Such rich in touristic sites gives comparative advantages for Cambodia to

attract more tourists, especially tourists along the new Silk Roads, making Cambodia’s state

revenue share by tourism sectors increase yearly as just the 1st quarter of 2014 revenue from this

sectors reach $700 million U.S (Lak, n.d.). One of the best evidence is the increase of Chinese

tourists 20% year-on-year, as stated by Thong Khon, Cambodian Tourism Minister, making the

number of Chinese tourists to visit Cambodia reach 560 000 in 2014, accounting for 12.4% of

international visitors to Cambodia. This data makes China became the 2nd largest source of

foreign tourists to visit Cambodia (Xinhua, 13 February 2015). As Khon further expressed,

Cambodian Ministry of Tourism predicted that Chinese tourists will further increase to 700 000

in 2015 and to 2 million by 2020. Another positive sign in Cambodia’s tourism sectors is the data

from China, the most populous country in the world with population about 1.357 billion people.

According to the data from China National Tourism Administration and World Tourism

Organization, extracted by Yanzi (October24, 2015), the number of Chinese tourist travel abroad

has been increasing by 20% over the last 4 years, accounted to about 100 million in 2013. China

is the world number one of tourism source with $129 billion U.S spent by Chinese tourist in

2013. As the startup of the 21st Chinese Maritime Silk Roads, many travel agencies in China is

now designing new tour program in order to boost the number of Chinese to visit Southeast Asia.

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Those tour agencies, for example Qunar, one of China’s most popular online travel agencies, are

now collaborating with travel service providers to offer more diverse and interesting travel routes

to explore the culture along the new Maritime Silk Roads, specifically Southeast Asia, with an

affordable prices (Yanzi, October24, 2015). Michael Parnwell, a professor of Southeast Studies

and regional tourism at the University of Leeds, stated in Yanzi (October 24, 2014), there is a

significant shift in lifestyle among Chinese people. Chinese people are now enjoying incentive

and opportunity to travel, making Chinese tourists travel abroad to spread further, especially to

Thailand, Cambodia, Malaysia, and Vietnam. The increase in Chinese tourism does not only

increase state’s revenue and economic growth, but also contribute to the poverty reduction in

Cambodia via the creation of more jobs and opportunities brought by this sector. As Khon further

elaborated, many Chinese tourists are now wealthy and, as estimation, by 2020, about 630

million Chinese people will be in middle-class range. Those people will expand their demand

beyond their daily basic needs and turn to other demands such as enjoyment and travel.

Moreover, those tourists will purchase quality products and souvenirs, eat in lavish restaurants,

and stay in stars-range hotels during their travel (Xinhua, 13 February 2015). This will enable

more jobs in Cambodia, for example, souvenir selling, tour guide, Touk-Touk driver, run

restaurants and hotels et cetera, as to fulfill the demand of those tourists. As a result, it

contributes to the poverty reduction in Cambodia. According to the Lak (n.d), tourism sector

plays a major role in poverty reduction in Cambodia as Cambodia GDP per capita rose from $760

in 2008 to over $1 000 in 2013.

ii. Threats

Although the 21st Century Chinese Maritime Silk Road brings opportunities to

Cambodia in term of Economic paradigm, this new initiative also brings threats to Cambodia’s

economy. One of the main threats that this trade ambitious initiative would bring to Cambodia is

the heavy reliance on Chinese products. The 21st Century Chinese Maritime Silk Road,

announced by Xi, called for good maritime cooperation between China, Southeast Asian

countries, Sri Lanka, other counties in Indian Oceans, Africa and Europe. As estimated, this

would encompasses around 4.4 billion people, equal to about 63% of the world’s population and

aggregate Gross Domestic Production (GDP) of about $2.1 trillion U.S, equal to 29% of the

world’s aggregate wealth. Some leaders, for example Sultan Hamegkubuwono X, Sultan of the

historic Yogyakarta Sultanate in Indonesia, the Governor of the modern Yogyakarta Special

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Region, shared the concerned that the new Maritime Silk Roads from China to other countries

along the road might lead those countries became the consumer market of Chinese goods and

services forever (Rao, May 30, 2015). In line with those leaders, V. Roth (Personal

communication, June 06, 2015) and S. Heng (Personal Communication, June 14, 2015) also

stated that this new Silk Roads initiative will bring the domination of Chinese products on a

whole region, specifically Cambodia’s market. The concern goes beyond the fall of countries,

along the Silk Road, ’s market to China. V. Roth (personal communication, June 06, 2015)

further elaborated the concern about Chinese market. Although the aim of Maritime Silk Road is

to boost connectivity and trade activities along the road, he added, Chinese authority still practice

“Infant Industry Concept” meaning that Chinese authority still applies protectionism policy

against international competition to protect and encourage domestic products. Yet, Chinese

people are not willing to be open-mined.

Another threat to Cambodia’s economy is the risk of economic. There is a general

agreement that the 21st Chinese Maritime Silk Road will enable more and more Chinese investors

to Cambodia. However, Chinese investors may bring both opportunity and threat to Cambodia.

The concern of the inflow of Chinese investors to Cambodia rests on the fact that some of those

investors are footloose companies which come to developing countries for the quest of natural

resources with low Cooperate Social Responsibility (CSR) obligation (V. Roth, personal

communication, June 06, 2015). This means that Chinese investors operate their companies

without national loyalties which are flexible in moving their operations anywhere very quickly.

Chinese investors are well-known for such footloose industries as witness during the increasingly

rising labor costs in China that hundreds of manufacturing factories in China were closed and

transferred to lower-wage countries such as Cambodia and Vietnam (Galbraith, July 20, 2011).

This posts a major concern for Cambodia. Some scholars and lawmakers have expressed their

concern that Chinese investors come to Cambodia to enjoy low labor wage and trade quotas, for

example, Generalized System of Preference (GSP), AFTA/CEPT that Cambodia gains from US,

EU, Japan and regional association as the name of low income county. Since those Chinese

investors are well-known as footloose companies, Cambodia might get a risk of the outflow of

Chinese investors and the closure of hundreds of factories when Cambodia status is moved up to

lower-middle income country because those Chinese investors or companies would not further be

able to enjoy zero or reduced export tariff quotas under the name “Made in Cambodia”. As a

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result, Cambodian unemployment rate will increase because of such massive closure, leading to

the turmoil of Cambodia’s economy. Moreover, some of the Chinese investors come to

Cambodia for the quest of natural resources with low sense of CSR. John Ciorciari, a public

policy professor at the University of Michigan, and Son Chhay, Cambodian National Rescue

Party Lawmaker, stated that China provided investments to Cambodia in the aim of accessing to

natural resources and labor, resulting in worse havoc of environment and ecology of Cambodia

(Phon, 23 December 2014). Currently, there are many Chinese’s investments operated in the field

of mining resources and hydroelectric dams, for example, the investment in hydropower at Stung

Areng and Ta Tai dams which was constructed by Chinese mega-company in Koh Kong

Province named Sinohydro Resource Ltd. The construction of these two hydropower electric

dams badly destructed thousands of acres of forests because of the logging activities during the

construction process (Vandenbrink, September 7, 2013).

Chapter 4: Impacts of the 21st Century Chinese Maritime Silk Road on Cambodia’s

security/ defense

i. Opportunities

Similar to economic aspect, the 21st Century China Maritime Silk Road also brings

opportunities to Cambodia’s security/defense. By collaborating with China and other member

countries of this ambitious project, Cambodia would be able to further strengthen its defense

sector and enhance social order in society. Through the “21st Century Chinese Maritime Silk

Road” initiative, Cambodia is able to receive more and more military aids and cooperation from

China. Chinese military aids are one of the main contributors to enhance and strengthen

Cambodian military power and improve technological capacity for the protection of territorial

and sovereignty due to the fact that more powerful neighbors such as Vietnam and Thailand have

always targeted Cambodia sovereignty since ancient time (C. Cheunboran, personal

communication, June 06, 2015 & S. Heng, personal communication, June 13, 2015). In 2013,

China provided 1,000 guns and 50,000 ammunitions to Cambodian General Commissariat of

National Police Force with the signing Memorandum of Understanding between Cambodia

National Police Force, Neth Saveorn, and Chinese Deputy Chief of General Department of

International Cooperation, Li Zhuqun (The Phnom Penh Post, 2013). By increasing aids to

Cambodia, according to Mr. Li Zhuqun, China would like to be in good hand with Cambodia

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counterpart in promoting and protecting social order. Since “Chinese Maritime Silk Road”

mainly focuses on economic perspective, it means that there will be more Chinese investors

investing along the “Chinese Maritime Silk Road”. Therefore, it is of necessary for Cambodia to

be able to maintain domestic stability and security within the territorial. Hence, with more

Chinese military aids, Cambodia will be able to increase its capacity to maintain stability and

safety of Cambodian citizen as well Chinese investors and workers that are currently living and

working in Cambodia.

Actually, China has become the second biggest world economy in 2010 and has strengthened

its power through both economic and security/defense sector. Hence, China requires more

cooperation between regional partners especially ASEAN countries. To China, Cambodia is one

of the most favor countries for future strategic interest such as defense and diplomatic

cooperation. China has become Cambodia biggest military assistance provider in early 2013. In

1998, China had established a military institution 80 km from Phnom Penh in Kompong Speu

province where China paid most of construction and operation (Alfred & Prak. 2015). Since then,

the institution had provided numerous training to Cambodia Royal Arm Forces with four-year

course under the supervision of China Defense Minister and Chinese advisers who supervise

local military officers. Moreover, Cambodian Defense Minister Tea Banh and China Defense

Minister Liang Guanglie (R.F.A, 2012) had signed a memorandum of understanding in Phnom

Penh for more military assistance to Cambodia with the military provision of $17 million dollar

to construct a military training facility. Adding to the memorandum, on 25 November 2013, 12 of

Chinese Z-9 helicopter arrived in Cambodia through Chinese $170 million loan (English People,

2013). Additionally, Chinese ambassador Bu Jinguo handovered some 44 vehicles, 20 forklifts,

2,000kg of unspecific chemicals and $10,000 spare part value to Royal Cambodia Army under

Defense Minister Tea Banh on May 2015 (Parameswaran, 2015). According to Alfred & Prak

(2015), the Chinese military school had been built in around 148 hectare with more than 70

building since 2002. The buildings have been strengthening Cambodia military forces through

various trainings and seminars under the Chinese supervision.

ii. Threats

Alongside the opportunities Cambodia might get from this initiative, Cambodia also

faces the threat which is the reduction of military aids from other countries. As mentioned above,

Cambodia has received huge amount of aids and military assistance from China in recent years.

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According to S. Heng (personal communication, June 13, 2015), those aids and military

assistance outruns the U.S military assistance; thus, it would affect Cambodia foreign military

aids greatly. The increasing aids from China would means the reduction of military aids from

U.S, which U.S would consider providing aids to Cambodia’s neighboring countries such as

Vietnam and Thailand or other ASEAN countries such as Indonesia, the Philippines and so on.

As a result, it would lead to the reduction of Royal Cambodia Armed Forces capacity and

professionalism. Cambodia and United States have conducted numerous military drills such as

Angkor Sentinel and Naval military drill inside Cambodia territorial. United States once

suspended military aids to Cambodia in 2010 due to the fact that Cambodia government sent back

Uighur refugees to China under China’s demand. It was a huge blow to Cambodia military

assistance because United States military aids are more high-tech and better quality than those of

China military assistance.

Furthermore, Cambodian image would be painted badly in the long-term due to the

tremendous Chinese military aids. The acquisition of Chinese military aids to Cambodia

explicitly showed that Cambodia is becoming a backbone military puppet for China to defense

against Vietnam and other claimant states of the South China Sea. The increasing assertiveness of

Chinese military activities in South China Sea by building more islands and active naval patrol

around Paracel and Spratly Islands signal the China commitment in protecting its sovereignty and

resources (Deth, personal communication, June 12, 2015). Through “21st Century Chinese

Maritime Silk Road” plan, China requires one or more countries partner to secure the trading

route and secure the China interest within the ASEAN region. Hence, by accepting more China

military aids would mean Cambodia support China provocative action in South China Sea area.

As Carl Thayer, Southeast Asia security expert at Australia Defense Force Security, stated in

Alfred & Prak (2015) that “For China, it's the beginning of a long-term strategy of winning

influence in the Cambodian military by cultivating these people. China keeps very deep

intelligence files on everybody.”

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Chapter 5: Impacts of the 21st Century Chinese Maritime Silk Road on Cambodia’s Politic

and Diplomacy

i. Opportunities

The 21st Chinese Maritime Silk Road also paves the opportunities for Cambodia’s politics

and diplomacy. By participating in this Silk Road of Xi, Cambodia would be able to leverage its

important regionally and internationally and its foreign policy bargaining power. This is because

of the attention from other countries to have better relations with and better influence on

Cambodia. In order to attract Cambodia, in addition to economic cooperation and military

assistances, China also provides Cambodia with political support such as party-to-party, domestic

stability and international supporter in international arena. The goals are to promote bilateral

relations in the field of socio-economic development, political and military cooperation between

the two countries (C. Lak, personal communication, June 09, 2015 & S. Heng, personal

communication, June 13, 2015). Actually, Sino-Cambodia relations could be traced back to 13th

century when a Chinese scholar, under Chinese Emperor’s degree, visited Cambodia and reported

back to the Emperor (Cheang, 2011). After the domestic turmoil in Cambodia during 1997, China

and Cambodia had exchange official visit for numerous of times to promote bilateral relations,

economic and social development between the two countries. On 7 November 2014, Cambodia

Prime Minister Hun Sen paid an official visit to China and met with Chinese President Xi Jinping

at the Great Hall of the People. According to Chinese Ministry of Foreign Affair (2014) wrote in

the national website:

“China is wiling to, together with Cambodia, maintain high-level exchanges and inter-

party communication, exchange experience on governance and administration of state

affairs, boost cooperation in such fields as connectivity, agriculture, hydropower,

economic special zone, education, medical care, telecommunication and tourism, and

promote the building of the Silk Road Economic Belt and the 21st Century Maritime Silk

Road.”

The hugely support from China would capture attention from other countries in ASEAN

and other superpower countries such as U.S., Japan, and India on Cambodia. This means that

Cambodia has become the important actor that China, U.S., Japan, India and other countries want

to have good relations with and to reduce the influence of China to Southeast Asia. Actually,

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ASEAN member states and other superpower countries such as the U.S., Japan, India begun to

see Cambodia as a potential country in term of geo-political affairs when Cambodia and China

reached consensus on “Comprehensive Strategic Partnership of Cooperation” in late 2013 during

Cambodian PM Hun Sen visitation to Chinese Premier Wen Jiabao. The Chinese Premier stated

the agreement would forge the Cambodia-Sino relations and increasing mutual and political

interest. Cambodia’s support to Chinese Maritime Silk Road is also the result from the

agreement. In addition, China had been supporting Cambodia when Cambodia was a chair of

ASEAN in 2012 financially and technically. As the result, ASEAN successfully adopted the

ASEAN Declaration of Human Rights, ASEAN Region Mine Center and Cambodia was able

persuade Brazil, the United Kingdom and the European Union to ratified the TAC during its

ASEAN chair. More or less, ASEAN member states had directly or indirectly supported

Cambodia during chairmanship was also due to the fact that Cambodia is an important country

with the support of regional superpower, China. Even though some countries such as United

States, Vietnam, Philippines accused Cambodia as China proxy in the South China Sea issues

during the failure of Joint Communiqué during Phnom Penh ASEAN Submit in 2012, Cambodia

always respect the ASEAN Treaty of Amity and Cooperation and respect all state’s sovereignty.

Cambodia government urged all claimant states not to use ASEAN as negotiation tables in South

China Sea issues but solves the problems bilaterally between China and claimant states in

ASEAN. Mr Phay Siphan (Simon, June 2015), Secretary of Council of Minister, Cambodia never

would like to see any clash or conflict within the region between any parties and Cambodia is a

friend to everyone. Additionally, Cambodia and China have never accused each other regarding

human rights issues and always support each other in regional and international agenda. So

through Cambodia support the “21st Century Chinese Maritime Silk Road” initiative, Cambodia

could receive a lot of benefits from China in both strategic and economic interests to further

speed up the Cambodia development and military enhancement.

ii. Threats

Meanwhile, this initiative also enables threats to Cambodia’s foreign policy which is the

reduction of Cambodia’s foreign policy autonomy. Cambodia, as one of the supporters of the 21st

Century Chinese Maritime Silk Road, could further get more aids and loans as well as military

assistance from China. Yet, those assistances are politically motivated. Hence, more or less, it

would affect Cambodia foreign policy formulation. To some extent, some countries see

18

Cambodia’s foreign policies as “Erosion and Unbalance” due to the losing autonomy that are

influenced by China (C. Cheunboran, personal communication, June 06, 2015, C. Lak, personal

communication, June 09, 2015, & S. Heng, personal communication, June 13, 2015). One good

example is the Cambodia Chairmanship of ASEAN Summit in Phnom Penh in 2012. Cambodia’s

secretary of Foreign Ministry of Foreign Affair and Cooperation, Seoun Rathchavy, (Simon,

2015) had conducted a closed door meeting with foreign diplomats on April 2015. The meeting

concluded as ASEAN could not be involved in South China Sea issues; thus the issues must be

solved bilaterally between the claimant states and China. Following the declaration of Cambodia

new position toward South China Sea issues, some critics said that China is using financial

support to buy Cambodia diplomatic support during ASEAN chair in 2012 (Radio Free Asia,

2013). The neutral stance was considered from skeptics as a way to get Cambodia out of South

China Sea issues; thus allow China to further exercise her provocative aggressive in the region.

For fifteen years, Cambodia-China relations has been cemented due to the Cambodian

government and policymakers are able to reap tremendous amount of economic and political aids

from Beijing that is able the incumbent Cambodian elites to consolidate their power, prosperous

through corruption and strengthening political entrenchment (John, 2013).

Chapter 6: Conclusion

In conclusion, the 21st Century Chinese Maritime Silk Road enables both opportunities

and threats to Cambodia. Actually, every initiative always has both good and bad points, but the

importance is how one country is going to maximize the advantages and minimize the drawback

from those initiatives. Similarly, it is not important whether the 21st Century Chinese Maritime

Silk Road produce opportunities or threats to Cambodia. However, it is of paramount important

how Cambodia maximizes the opportunities and minimizes the threats from this ambiguous

initiative. The 21st Century Chinese Maritime Silk Road is regarded as the golden chance for

Cambodia to improve country development. C. Cheunboran, C. Lak, V. Roth, O. Deth and S.

Heng (personal communication, 2015) are all support for this initiative. They further elaborated

that this Silk Road would produce fruitful short-term effects in term of economic, politic, and

security development due to the fast and availability of such “no-string” attached of China

foreign aids. Such aids are more comfortable and fasten the development projects such as

infrastructure development that is very vital for Cambodia economy, especially when ASEAN

Economic Community is created in 2015.

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