Chai Zhizhou explains China's aid policy - "non-conditional"
LAST week the People's Republic of China strode boldly to the forefront of Cambodia's
foreign donor community with a multi-million dollar package of loans and grants aimed
at overhauling the parlous state of the Kingdom's infrastructure and industrial base.
Following up on Prime Minister Hun Sen's visit to China in February, China's Deputy
Minister of Trade and Economic Cooperation Sun Guangxiang spent last week touring
Cambodia with a high-powered delegation of Chinese officials and business leaders.
Sun and his delegation arrived in Cambodia with deep pockets, bearing loan and grant
guarantees totaling more than US$220 million.
Chai Zhizhou, Economic and Commercial Counselor at the Embassy of the People's Republic
of China in Phnom Penh, described the aid package as a way of "bringing together
Chinese and Cambodian expertise to help develop Cambodia".
According to Chai, China is currently providing development aid to "more than
100 of its diplomatic allies ...from Africa to Romania", but admits that the
Chinese aid package for Cambodia "is one of the largest".
So is the timely injection of Chinese funding a sign of a new willingness on China's
part to fill the aid gap largely vacated by western donors in the wake of the 1997
Not at all, says Chai.
"The Chinese government has enjoyed excellent relations with Cambodia since
1955," Chai says. "This financial aid is merely the latest evidence of
the mutual friendship and support that exists between our two countries."
According to Chai, the two governments have compiled an extensive list of industrial
and infrastructure projects that Chinese government and industry will work together
to develop with Cambodian authorities.
Top of the list is a series of projects to expand Cambodia's industrial base, with
loans aimed at building and expanding factories that produce everything from cement
One of the largest projects, however, is a dam construction project that was ironically
originally undertaken by foreign donors that pulled the plug after the 1997 coup.
"These dams [in Kampong Thom and Svay Rieng respectively] were
originally supposed to have been built by the ADB and Vietnam, but they did nothing,"
Unlike the original foreign donors, Chai stresses that Chinese aid will be dispatched
with little or no delay. "Within two or three months the [dam] projects will
Chai is keen to emphasize the "no strings attached" nature of this latest
Chinese development aid to the Kingdom.
"There have been reports in the press that these Chinese government loans to
Cambodia carried interest rates of eight percent," Chai says. "That's not
true - the loans are interest-free."
In spite of the Cambodian government's perpetual cash-crisis woes, Chai says the
issue of when the Cambodian government will be able to repay the loans is not a matter
of concern for the Chinese government.
"There hasn't been any discussion of a [loan] repayment schedule," Chai
says. "There's no time limit [on the loans repayment]."
According to Chai, the Chinese government's aid to Cambodia differs philosophically
from that of western aid donors in its "non-conditional" approach.
"The Chinese government doesn't offers loans or grants and say, 'We give you
money, so you must therefore... '," Chai explains. "China doesn't put conditions
on foreign aid... [instead] China maintains that every country has to follow its
own distinct plan of development."
Chai suggests that the traditional insistence of Cambodia's western donors on guarantees
from the Kingdom's government regarding human rights and democratic reforms may be
"China is committed to assisting Cambodians unite their society and develop
their democracy," Chai says. "But economic development is necessary [first]
in order for democracy to develop."