The push and pull of China’s orbit

China’s Back Yard Cambodia

The push and pull of China’s orbit

A rush to invest in Cambodia’s infrastructure is part of a larger quest to expand regional influence

Published on September 5, 2015

In Phluk, Cambodia

The thump of jackhammers and the whine of drills pierce the air, workmen in orange safety hats beaver away, and a massive concrete wall rises slowly above the river.

Here, in lush northeastern Cambodia, the $800 million Lower Sesan 2 Dam stands as a potent symbol of China’s growing reach, and Beijing’s ambitious plans to expand its influence throughout Asia by building desperately needed infrastructure.

CHINA'S BACK YARD: This is part of an occasional series examining China’s efforts to win friends and clients in Asia and to assert a more dominant role across the continent.

Above: A boatman motors along the Sesan River at sunset close to the fishing village of Phluk in northeastern Cambodia, near the site of the hydroelectric dam that is under construction.

Nearly 5,000 people are likely to be evicted from their villages when the dam’s reservoir fills, and almost 40,000 living along the banks of the Sesan and Srepok rivers stand to lose most of the fish they rely on for food, yet this dam project is part of a much larger Chinese ambition. Chinese President Xi Jinping is making a bold move, billed as the great rejuvenation of the Chinese nation, to restore what he sees as Beijing’s historic place at the center of Asia.

A Chinese dam rises in Cambodia

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China is the major underwriter of an $800 million dollar hydro-electric dam being built in rural Cambodia. But the project threatens a way of life for villagers along the Srepak and Sesan rivers. (Jason Aldag)

This is a new assertive China, with a grand strategic vision to match its still considerable economic might, countering President Obama’s foreign policy “rebalance” toward Asia with hundreds of billions of dollars of new investment of its own in its neighbors. Even as Xi arrives in the United States for a historic visit later this month, keen to be seen as Obama’s equal on the world stage, he is working behind the scenes to surpass the United States as Asia’s regional power.

Nowhere is this more apparent than in Cambodia, a country that has found itself drawn into China’s orbit and lured away from the West with the promise of billions of dollars of easy money, offered with no strings attached, often in the blink of an eye, for roads, bridges and dams.

“Without infrastructure, you can’t revive,” said Commerce Minister Sun Chanthol, in an interview. “We have been blamed for always going to China, but it is because we need infrastructure fast and quick, nothing more than that. Are there any conditions put on Cambodia by China? I can tell you, absolutely nothing. No conditions at all.”

Xi says he wants to restore ancient trading routes, to create a new “Maritime Silk Road” through the seas of southern Asia and a new “Silk Road Economic Belt” across the deserts and mountains of Central Asia. The new Asian Infrastructure Investment Bank, based in Beijing, and a $40 billion Silk Road fund will provide some of the money. China sees opportunity in Asia much the way the United States once saw — and grasped — opportunities in Latin America. Beijing’s plans are already unfolding across the region, with China simultaneously making new friends, and new enemies, as it spreads its wings.

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President Xi Jinping aims to
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his nation with Asia and

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As part of a new assertive foreign policy, Chinese President Xi Jinping aims to re-create ancient Silk Road trading routes that linked his nation with Asia and the West.

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Economic Belt

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Source: Xinhua

Silk Road Economic Belt

As part of a new assertive foreign policy, Chinese President Xi Jinping aims to re-create ancient Silk Road trading routes that linked his nation with Asia and the West.

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The impact on Cambodians

Cambodia emerged in ruins from the chaos of the Vietnam War and the killing fields of the Khmer Rouge in the 1970s. Now at peace, its economy is growing fast but is in desperate need of transport infrastructure and power. China is stumping up the cash, with none of the tiresome and time-consuming conditions the World Bank attaches to its lending, Cambodian officials say, and none of the complaints about human rights that emanate from the United States. There isn’t even much obvious concern about corruption.

Yet in the villages around the Lower Sesan 2 Dam, the drawbacks of this Chinese largesse soon become apparent. Typically, this is a project being brokered by the two nations’ elites with little or no consideration of the impact on local communities.

With the threatened loss of most of the rivers’ fisheries resources because the dam will block key fish migration routes, experts say, hundreds of thousands of Cambodians could feel the impact across the vast Mekong River Basin. The dam could take away a key source of protein in a desperately poor country where many people depend on fishing.

The dam, according to a study by Ian Baird at the University of Wisconsin at Madison, will result in “increased malnutrition and poverty over a wide area in Cambodia.”

It is, another study suggests, the most damaging of dozens of dams proposed on the Mekong’s tributaries in Cambodia, Vietnam and Laos between now and 2030.

Yet the environmental assessment reports for the dam have failed to take this into account, and the project includes no provision for compensation for lost fish stocks.

“This dam is not in a great location, it is a relatively expensive project, and it will have a major environmental and social impact,” said Baird, who is a geography professor. “There is no way the World Bank or the Asian Development Bank would touch this.”

In the small village of Phluk, just downstream from the dam site, fishermen who stand in the river casting their nets say dynamite used by Chinese engineers — as well as murky cement-filled waters flowing from the construction site — have already depressed catches significantly.

There is anger here and despair.

“There are no more big fish: we can’t make any money from fishing any more,” said Uta Khami, a 54-year-old father of seven. “My father first took me fishing when I was 12. My family survived because of the fish from this river. I regret this so much, it almost takes my breath away.”

The majority investor in the project is China’s state-owned HydroLancang, in partnership with Cambodia’s Royal Group, whose owner, prominent local tycoon Kith Meng, was once described in a leaked U.S. Embassy cable as a “ruthless gangster” nicknamed “Mr. Rough and Tough.”

But it is far from the only Chinese project in Cambodia to generate a popular backlash. Cambodian civil society groups cite a 90,000-acre land concession to China’s Union Development Group (UDG) to build an international trade and eco-tourism center on Cambodia’s southwestern coast.

The project has seen thousands of people forcibly evicted, given inadequate compensation and resettled on poor quality land, in poor houses, with limited access to electricity, clean water or toilets, according a report by the NGO Forum on Cambodia, a coalition of civil society groups.

Another Chinese dam project, in the pristine, densely forested Areng Valley, also in the southwest, was suspended in February after sustained protests by locals and a social media campaign that spread among urban youth.

Although the United States remains Cambodia’s largest trading partner, and a large importer of garments, China has emerged in the past decade as the country’s largest donor and largest source of foreign investment.

Activists say the dam will adversely affect the livelihoods of people who live along the Mekong River Basin.

‘China’s influence is growing’

Mey Kalyan, a senior adviser to the Supreme National Economic Council, says China enjoys a “special kind of relationship with Cambodia.”

Many Cambodians have some Chinese ancestry, even if few speak Mandarin; many shops and houses display Chinese-style Buddhist shrines and have Chinese characters pasted on their walls wishing happiness and health to their residents.

“China’s influence is growing, very much to the anger of the United States,” Mey said. “In terms of the investment, so far so good, although there is always room to improve.”

But even Mey admits that China needs to recognize that Cambodia is a democracy, with an emerging and increasingly demanding middle class, and a vibrant civil society, not a Communist one-party state.

“In China, when the party decides to do something, they do it — and the same mentality comes here,” he said. “But the Cambodian system is very different from the Chinese system. We need more dialogue, more sensitivity.”

Kung Phoak, president of the Cambodian Institute for Strategic Studies, says China suffers a “severe deficit of trust,” not just in Cambodia but throughout the region.

China has a habit of dealing with Cambodia’s elite, he says. Although the nation’s democracy is deeply flawed, Kung says that nonetheless “the government is now very responsive to public opinion, and the people remain deeply skeptical and suspicious of China’s various activities in the country.”

But Asia has suffered enough from superpower rivalries in the past, and Kung says Cambodia does not want to be asked to pick sides between the United States and China.

“We want to be as neutral as possible,” he said. “China is rising. In the past, the United States was the dominant player in the Asia-Pacific, but now it is not just the U.S., you have China, too. There must be a broad strategic realignment, especially for a small country like Cambodia.”

Indeed, Cambodia is a country scarred by superpower rivalry like few others.

During the Vietnam War, the United States supported a corrupt military regime here while simultaneously dropping 2.8 million tons of bombs on Cambodia, significantly more than the Allies dropped during the entire Second World War; along the Sesan River, villagers still recall where Americans bombed Viet Cong camps hidden in the forest.

The violence of that era helped propel the Khmer Rouge to power; the genocidal Maoist group, backed first by North Vietnam and then by China, killed around 2 million people while running the country from 1975 to 1979.

Peace finally returned to Cambodia in 1991. For the past two decades, with significant support from Western donors, Cambodia’s economy has expanded at more than 7 percent a year, one of the fastest rates in the world.

But China has expanded its influence in recent years, backing Prime Minister Hun Sen after he seized power in a coup in 1997 and won controversial elections in 2013, despite Western allegations of fraud. In return, Cambodia returned 20 Uighur asylum seekers to China in 2009, despite a forceful protest from Washington, and used its position within the regional ASEAN group to stifle criticism of China’s actions in the disputed South China Sea.

Since those contested 2013 elections, Hun Sen’s government has moved in an increasingly repressive direction, human rights groups say, drafting laws to regulate nongovernmental organizations and trade unions that could have damaging effects on the nation’s freedom of assembly.

The United States finds itself in the uncomfortable position of feeling the need to speak out but knowing this could push the government further into China’s hands.

When U.S. Ambassador William Todd wrote in May that Cambodia’s image was being “affected” by the NGO law, the foreign ministry responded by calling him “extremely insolent.”

Western donors have invested significant resources in promoting democracy in Cambodia since a peace accord was reached in Paris in 1991 to end civil war here. Even when Hun Sen has trampled over that democracy, they have been reluctant to walk away, a reluctance Cambodia’s prime minister has cannily exploited. Now, China’s rising influence further undercuts Western leverage.

“The growing relationship, especially the economic relationship, with China, does give Hun Sen the sense that he has more room for maneuver, that it is even less likely that foreign donors would step back,” said Gregory Poling, a fellow and specialist in Southeast Asia at the Center for Strategic and International Studies in Washington.

“But this has been the case really since the end of the Paris peace accords. Hun Sen has made a bet that the ‘success story’ that is Cambodia is so important to foreign donors that he can get away with everything, up to and including murder, without the donors really stepping back.”

TOP: Muon Phoek, 6, is seen inside his home in Srea Kor, Cambodia. The sign in Khmer states that the family disagrees with the relocation policy and wishes to stay in the village. ABOVE LEFT: Mai Sisophoeun, 10, carries water back to her home along the Sesan River in the fishing village of Phluk. ABOVE RIGHT: Chenda Luy, 70, says she has no interest in the relocation and compensation that the government has offered.

Critical infrastructure

Meanwhile, ties with China grow ever stronger. In April, Chinese President Xi Jinping told Hun Sen relations between the two countries are “blessed with vital opportunities.”

Hun Sen, who once described China as “the root of everything that is evil,” because of its support for the Khmer Rouge, these days calls it Cambodia’s “most trustworthy friend.”

While the United States has provided significant support for social spending here, Commerce Minister Sun says it has not invested enough since rebuilding “the American road” from the capital Phnom Penh to the coastal city of Sihanoukville in the 1990s.

Although the United States remains

Cambodia’s largest trading partner, China

is the country's greatest donor and largest source of foreign investment — and its

influence is growing.

Lower Sesan 2 Dam

Under construction

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Source: Open Development Cambodia

“In my opinion, I think the U.S. is quick to criticize, quick to blame,” said Sun, who rejects complaints about the NGO law.

“You don’t put in any funding for infrastructure, and then when we go to China, you blame us,” he said. “When they ask why you always come to China for funding, I say ‘No, Cambodians have been starving for years. When someone offers me a bowl of rice, obviously I eat it.’”

While many Cambodians complain that Chinese roads are poorly built and prone to potholes, they serve a purpose. Two decades ago, the journey from Phnom Penh to the northeastern town of Stung Treng took four days: now, thanks to a Chinese road, it takes about seven hours.

“There is a bridge here, and a road now, and they are two very important things,” said Dy Polen, a restaurant owner. “Yes, the bridge is cracking, and I do care about quality, but it is better than before.”

If Dy welcomes Chinese investment in Cambodia, he says he doesn’t “know clearly” about the Americans.

“I know the Americans bombed Cambodia. My grandparents were killed by American bombs, both of them were blown into the trees.”

Even opposition leader Sam Rainsy said he considers China to be an important counterbalance to larger neighbors Thailand and Vietnam.

“Cambodian people feel threatened by these two large neighbors, so we are not unhappy to see a third player come in,” he said in an interview. “It is difficult to resist Vietnamese influence without a counterweight from China.”

In Myanmar four years ago, public opinion forced the government to suspend a controversial Chinese dam project, and some experts wondered if Beijing might learn a lesson: that gaining support from local communities might be a wiser long-term investment strategy than simply engaging with authoritarian regimes.

But there is no sign of that here, among the sugar palm trees and along the rivers of Cambodia.

In the village of Srae Kor, hand-painted signs on wooden houses proclaim the determination of many residents not to leave their homes, even when the Lower Sesan 2 Dam’s reservoir fills and the floodwaters rise.

“I prefer to die in my village and remain with my ancestors,” said 62-year-old La Thoeu as she spun cotton from a kapok tree to make wicks for candles. “The river is my life. I live a happy life. I catch fish. I will not leave this place.”

The land where the government wants to move them is rocky, villagers say, the compensation inadequate to make up for years of lost revenues from fishing and orchards. Some even traveled to see the houses offered to those resettled by the UDG project, and were appalled by their poor quality. But protests outside the Chinese Embassy, and several petitions, have yet to elicit a response. Despite the vast sums spent on the project, it appears to be winning few friends for Beijing.

“China is moving so fast and so furious, but in some ways it is not so nimble on its feet at avoiding a backlash,” Baird said. “You wonder how savvy they are.”

Xu Jing contributed to this report.

[CORRECTION: An earlier version of this post reported that Kung Phoak, president of the Cambodian Institute for Strategic Studies, had described his nation’s elite as “corrupt.” He did not. The post has been reworded to reflect that.]

A fisherman named Veng casts his net while wading in the Sesan River near the hydroelectric dam project.

CHINA'S BACK YARD: This is part of an occasional series examining China’s efforts to win friends and clients in Asia and to assert a more dominant role across the continent.

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