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For China, a friend in need

Prime Minister Hun Sen shakes hands with China’s President Xi Jinping in Beijing last week, during Hun Sen’s visit for the APEC summit
Prime Minister Hun Sen shakes hands with China’s President Xi Jinping in Beijing last week, during Hun Sen’s visit for the APEC summit. AFP

For China, a friend in need

As the annual ASEAN Summit starts today, Cambodia’s pockets are millions of dollars deeper thanks to China.

Less than a week before the regional summit in Myanmar – where the South China Sea dispute is expected to again rear its contentious head – Beijing pledged fresh economic development loans to the tune of $500 million to $700 million annually to Cambodia.

In a year where the powerhouse has ratcheted up tensions in disputed waters and has sought to counter the United States' promised Asian policy “pivot”, China is looking to buy its key ally at the summit’s negotiating table, experts said yesterday.

“You can always count on China to be good to its neighbours this time of year,” said Carlyle Thayer, a Southeast Asia expert and emeritus professor at the Australian Defence Force Academy.

“The money is meant to send a message that China is the big sugar daddy of Southeast Asia and will outbid the US. It’s a lesson for Laos, Myanmar and Singapore that supporting China will be rewarded.”

During a meeting with Chinese leader Xi Jinping at the Asia-Pacific Economic Cooperation summit where the loans were promised this weekend, Prime Minister Hun Sen assured support for China’s efforts to “safeguard national sovereignty, security and territorial integrity,” according to Chinese media.

China is Cambodia’s biggest investor, partner for large infrastructure projects, financier and trade partner. Its direct investment in Cambodia reached a staggering $10 billion as of 2012, according to the Cambodian government.

“In exchange for capital investments, China expects unfettered strategic, business, economic and diplomatic support,” said Peter Tan Keo, founder of the Center for ASEAN-US Studies, an American think tank.

The purchased support is particularly relevant as the ASEAN member states are expected to pick up discussions over the Code of Conduct in the South China Sea, a decade-old agreement that has seen negotiations stagnate.

President Benigno Aquino of the Philippines said he plans to make the disputed territory a priority after Beijing’s increasingly aggressive behaviour in the resource-rich waters, including boosting naval patrols and positioning an oil rig in seas disputed with Vietnam in May, sparking deadly anti-Chinese riots.

But analysts said it was unlikely the code would see staunch supporters while China dangles a $40 billion “Silk Road Fund” to boost trade ties between Asian countries. The fund notably excludes the Philippines.

“They will not allow the dispute in the South China Sea [to damage] such strong economic relations,” said Chheang Vannarith, an analyst at the University of Leeds.

And while Cambodia no longer wields the influence of being the ASEAN chair, it can still prevent consensus and report back to its funder.

“When the door closes [at the summit], and it's only ASEAN members in the room, it will all get back to China,” said Thayer. “To play the multilateral game, you have to have a few key players you can count on. And Hor Namhong [Cambodia’s Foreign Affairs Minister] is a China man.”

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