Historically, China’s regional interests in the context of the containment of Vietnam has had devastating effects on Cambodia and prolonged the Cambodian civil war. The Chinese government was a major military and technical supporter of the Khmer Rouge, but it also courted King Sihanouk. In 1993, the royalists won the elections held under UN supervision, but were forced by the threat of continued civil war into a coalition with former Prime Minister Hun Sen. In 1997, the conflict escalated when Hun Sen’s troops pre-empted an alleged royalist coup. In reaction to the open violence, Western donors withheld assistance flows to Cambodia. The Chinese government, on the other hand, was among the first to endorse Hun Sen as Cambodia’s sole Prime Minister.
Following this turning-point in their relations, Hun Sen, formerly disliked as a Vietnamese puppet, quickly turned out to be one of China’s closest friends in the region. Hun Sen severed relations with Taiwan and was generously rewarded: in 1999, the Chinese government began to provide military assistance to the Royal Cambodian Armed Forces loyal to Hun Sen. Chinese state and private companies also became major investors, notably in the textile industry and agro-business, and acquired numerous land concessions. China is interested in the Cambodian offshore oil and gas reserves that were discovered in 2004. China pledged US$ 600m to Cambodia in 2006 and US$ 250m in 2008, and most recently, in October 2009, a pledge of US$ 850m was announced. This has effectively enabled the Cambodian government to play off old and new donors against each other. While external pressure has forced Hun Sen’s aid-dependent government on several occasions in the past to seek reconciliation with political challengers, to agree to elections and to respect human rights, he recently reiterated his pleasure at the absence of strings attached to China’s development assistance. Some of the infrastructure projects financed and constructed by China at the request of the corrupt Cambodian government are highly questionable, examples being a hydroelectric power station in a national park and protected area, which had been rejected by traditional donors because of its ecological and economic unsustainability.
In sum, China’s investment in Cambodia has paid dividends: Hun Sen’s government acts as China’s voice in ASEAN, China has access to the Cambodian port of Sihanoukville, which could be of strategic relevance, and the Cambodian government has become particularly silent over China’s upstream dam-building projects along the Mekong, although they will certainly have an adverse effect on Cambodians who depend on agriculture and fishing.
Concerned about the effects of China’s engagement in Cambodia, traditional donors have tried to integrate the Chinese government into the existing coordination body. So far these attempts have had mixed results.