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Logo of Phnom Penh Post newspaper Phnom Penh Post - China's PM comes laden with gifts

China's PM comes laden with gifts

The government's press release announcing the arrival on April 7 of Chinese

Prime Minister Wen Jaibao in Phnom Penh reads like a child's Christmas wish

list.

In florid diplomatic tones, the statement proclaims a two-day

spree of gift-giving that will shower Cambodia with fire trucks, crime fighters,

temple preservation and its own information superhighway.

All that, and

the Kingdom's first national botanical garden thrown in for good measure.

In 48 hours, a total of 11 agreements will be signed by the government

and the People's Republic of China, the Jaibao entourage will visit King

Sihamoni and Prime Minister Hun Sen, among others, and then attend

groundbreaking ceremonies for two Chinese-funded developments - the new

$49-million Council of Ministers office and the $280-million Kamchay

Hydroelectric Power Dam near Kampot.

"The major purpose of the visit is

to increase the relationship with Cambodia," said Li Jie, First Secretary of the

Chinese Embassy in Phnom Penh. "This is the first time Premier Wen Jaibao has

visited Cambodia."

Symbolic niceties aside, the visit will be more

significant for the money that changes hands in the form of soft loans, grants,

aid donations and debt reduction - not to mention what many believe will be a

marathon of backroom deals and private investment bids.

"Some Cambodians

like the arrangement because it is untransparent," one senior Western diplomat

told the Post. "But we all know these are loans are contingent on something.

There may be conditions we don't know about - all loans entail this. But we

don't know what the side agreements are, what the conditions are for

payback."

According to the minutes of a recent Council of Ministers

meeting, Cambodia expects to receive a credit package worth $200 million to $300

million. A local news agency reported that the meetings may also yield $80

million in non-refundable aid and $80 million in zero-percent loans.

"Today the most important Chinese influence is in the economic field,"

said government spokesman Khieu Kanharith. "China allows us to export thousands

of products to China with no tariffs."

Last year bilateral trade

increased 50 percent. In July 2005, Hun Sen returned from Beijing with almost

$400 million worth of loans, grants and promised investment. But observers and

diplomats have expressed concern about China's generous stance with Cambodia -

asking specifically how the Cambodian people are benefiting from the

relationship, and at what cost to the country's dwindling natural

resources.

"From experience, China does not help other countries with

economic development - China does not help at all," said Sam Rainsy Party

parliamentarian Son Chhay.

"In every country that China has relations

with, China uses its influence to take natural resources and raw materials from

those countries in order to serve its commercial needs."

China, the

biggest benefactor to the Royal Cambodian Armed Forces and Cambodia's largest

foreign investor since 2004, has been a salient absence at recent Consultative

Group meetings and has drawn criticism for what some consider to be blatant

disregard for the environment and human rights.

"If you look at the

rubber plantations and the deforestation caused by some of the road construction

- I am not sure that Cambodia is benefiting from this relationship," said

opposition leader Sam Rainsy on April 6.

"People talk about 'win-win'

situations but I see 'win-win-lose' in which corrupt officials win and the

unscrupulous investors win, but the Cambodian people lose."

Rainsy spoke

in reference to the construction of a road network in northwest Cambodia by a

Shanghai-based company and the agreement signed last week between a Chinese

rubber-producing conglomerate and a Cambodian firm to plant a 63,000-hectare

rubber plantation in Preah Vihear province.

And Chhay said that only

China "goes and builds buildings for national institutions in other countries in

order to motivate [their governments]. China builds the new buildings for the

National Assembly and builds new buildings for the Council of Ministers. This is

'passive corruption;' it means that China agreed to build the buildings for the

legislative and executive institutions in order to get commercial

contracts."

China's biggest single investment in Cambodia is equally

controversial. The Kamchay Hydroelectric Power Dam, to be completed by Chinese

company Sinohydro in 2010, has raised fears with environmental NGOs and the

public that the dam would flood 2,600 hectares in Bokor National Park, and

destroy the livelihoods of local villagers.

"The Chinese are like locusts

now," the diplomat said. "They consume natural resources, animals, mineral

rights - and they work outside of environmental protection. The Chinese don't

know how to control their companies."

Complicating matters is the

tumultuous historical relationship between the two regional neighbors. According

to journalist Tom Fawthrop, Cambodia's "special links" to China began in the

1960s with former King Sihanouk's neutral foreign policy and close personal ties

with Chinese leaders Mao Tsetung and Chou Enlai.

But a decade later,

China's bitter rivalry with Vietnam convinced its government to support the

Khmer Rouge regime through the 1970s, and then spend $300 million annually to

fund Khmer Rouge rebel groups in the 1980s. In 1988 Hun Sen famously wrote that

"China is the root of all that is evil in Cambodia."

Kanharith said that

in the past "we had a good relationship with China. But that good relationship

had to be postponed when Cambodians were fighting each other. Lon Nol broke off

our relationship with China, but later China was supporting the [Khmer Rouge].

In short, China has always been involved in the political issues of

Cambodia."

According to Kanharith, relations began to improve after the

1993 Paris Peace Agreements, to which China was a signatory.

Since then

bilateral ties have warmed to the extent that Cambodia has embraced Beijing's

"one-China" policy regarding its territorial claims to Taiwan.

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