Logo of Phnom Penh Post newspaper Phnom Penh Post - US think tank warns of China's 'ulterior motives'



US think tank warns of China's 'ulterior motives'

Concept art for the planned Dara Sakor Seashore Resort in Koh Kong. Facebook
Concept art for the planned Dara Sakor Seashore Resort in Koh Kong. Facebook

US think tank warns of China's 'ulterior motives'

A US think tank on Tuesday warned that spreading Chinese investment in the Indo-Pacific follows a pattern of leveraging geopolitical influence at the expense of the nations receiving investment, including Cambodia.

The report looks at a sample of 15 Chinese port development projects, noting that the goal of the projects seems to be to “generate political influence” and “stealthily expand China’s military presence”. One of the three main case studies is the Union Development Group’s planned multi-billion-dollar tourism hub in Cambodia’s Koh Kong province.

The report, Harbored Ambitions, was co-authored by Devin Thorne and Ben Spevack for the Center for Advanced Defense Studies, a nonprofit research group.

Cambodia analysts said the report was largely accurate, although government spokesman Phay Siphan described the research group as "prejudiced."

Union Development was awarded a concession of nearly 40,000 hectares, almost four times the amount allowed under the law, and has been in conflict ever since with villagers set to be displaced by its project.

"In an apparent violation of Cambodian law, corporate obfuscation helped China broker a deal with Phnom Penh for 20% of Cambodia’s coastline. Consequences of the Koh Kong mega-development include economic losses, environmental degradation, and reported human rights abuses," the paper states.

While Union Development is ostensibly a private company, the report notes that representatives of the Chinese Communist Party have taken a vested interest in the project, periodically visiting the site and obtaining progress reports.

According to the study, the company was founded as a foreign corporation, but switched to a domestic company in order to receive a 99-year lease from the Cambodian government. Since then, it has reverted back to full Chinese ownership.

It was supported from its inception by the current head of the Belt and Road Initiative Leading Group, the steering committee in charge of Chinese President Xi Jinping's ambitious plan to increase trade connections between China and nations in Asia and Europe.

“While the development in Koh Kong province has the potential to advance China’s domestic and international interests, it has come at the expense of the local population, the environment, and potential future income for Cambodia,” the report claims.

It goes on to note certain “strategic” benefits of the development that go far beyond economics. The coastline is located “directly opposite the proposed locations of the Thai Canal”, a planned route to bypass the Malacca Strait, giving China more privileged access to maritime trading routes.

A port at the site would also be large enough to house frigates and destroyers and their crews, or provide logistical support to nearby warships. On top of that, the paper theorises the facilities could be used to exploit cheap labour to address China's growing food shortages.

While the development could theoretically be economically beneficial to Cambodia via tourism and taxes, the deal itself awards Cambodia minimal gains.

The lease, 100 percent owned by Union Development, allows the company to develop the area with no payment for the first 10 years of the 99-year lease. After the initial grace period, which ends this year, the lease will cost $1 million per year, increasing by $200,000 every five years.

“In essence, Hun Sen’s administration has valued the 36,000-hectare concession at less than 30 USD per hectare,” the report claims, adding that the development damages Cambodian industries like fishing, shipping, and tourism.

The development plan has also been subject to human rights controversies, with thousands of families evicted. Some claim they were never compensated, and holdouts report being forcibly removed while their crops and homes were destroyed.

“On the surface, the only objective of Chinese President Xi Jinping’s hallmark Initiative is to increase infrastructure connectivity within Asia and beyond so as to facilitate ‘win-win’ economic development,” the report states in its conclusion.

However, the strategic locations of the projects, Communist Party presence, government financial control, lack of transparency and seeming unprofitability of some projects all point to additional motives.

Government spokesman Phay Siphan said on Wednesday that he believes China’s investment will benefit Cambodia, which wants to help, and questioned the “prejudice” of an American think tank.

“We do need the investment from China,” he said.

But Miguel Chanco, lead regional analyst for the Economist Intelligence Unit, said the report’s characterisation of China’s economic policies was largely accurate.

“It is certainly a fair interpretation of China's port projects in other countries,” he said via email, noting subsequent “difficult situations” following investment in Sri Lanka and Pakistan.

“The question for me is how desperate Cambodia is for such Chinese investment – I would say very because it has backed itself into a corner where it can no longer rely heavily on Western aid,” he said.

Bill Laurance, a research professor at James Cook University with 40 years of experience in the developing world, said China is “intensely self-interested”.

“I see China as having little real interest in developing or aiding other nations,” he said. “As China becomes bolder and more powerful, it is willing to use intimidation, threats, economic might, and even military pressure to achieve its aims."

MOST VIEWED

  • Phnom Penh placed in two-week lockdown

    The government has decided to place Phnom Penh in lockdown for two weeks, effective April 14 midnight through April 28, as Cambodia continues to grapple with the ongoing community outbreak of Covid-19, which has seen no sign of subsiding. According to a directive signed by Prime Minister

  • Cambodia on the verge of national tragedy, WHO warns

    The World Health Organisation (WHO) in Cambodia warned that the country had reached another critical point amid a sudden, huge surge in community transmission cases and deaths. “We stand on the brink of a national tragedy because of Covid-19. Despite our best efforts, we are

  • Hun Sen: Stay where you are, or else

    Prime Minister Hun Sen warned that the two-week lockdown of Phnom Penh and adjacent Kandal provincial town Takmao could be extended if people are not cooperative by staying home. “Now let me make this clear: stay in your home, village, and district and remain where

  • Businesses in capital told to get travel permit amid lockdown through One Window Service

    The Phnom Penh Municipal Administration has issued guidelines on how to get travel permission for priority groups during the lockdown of Phnom Penh, directing private institutions to apply through the municipality's One Window Service and limit their staff to a mere two per cent. In

  • Vaccination open to foreigners in Cambodia

    The Ministry of Health on April 8 issued an announcement on Covid-19 vaccination for foreigners residing and working in Cambodia, directing the Ministry of Labour and Vocational Training and local authorities to register them. Health minister Mam Bun Heng, who is also head of the inter-ministerial

  • Ministry names types of business permitted amid lockdown

    The Ministry of Labour and Vocational Training singled out 11 types of business that are permitted to operate during the lockdown of Phnom Penh and Takmao town, which run through April 28. Those include (1) food-processing enterprises and slaughterhouses; (2) providers of public services such as firefighting, utility and