China's chequebook diplomacy in Cambodia a double-edged sword creating resentment

China's chequebook diplomacy in Cambodia a double-edged sword creating resentment

Tensions rise as locals worry about the threat of Chinese-owned businesses and enclaves to their livelihood, homes and rights, as the programme Insight discovers.

"There's real fear that one day, their city will be too expensive to live in." China is investing billions in Cambodia - but locals are paying the price of the boom. 

SIHANOUKVILLE, Cambodia: Billions of dollars have been flowing from China into Cambodia, turning parts of the once war-stricken country into modern cities. The economy is booming, jobs have been created and the market values of land have gone up.

All of these should make tuk-tuk driver Ngieb Rem a happy man. Instead, he finds himself working harder than before in port city Sihanoukville, as an influx of Chinese tourists has driven out many local and Western holidaymakers.

“We can earn about the same amount, but we’d spend longer hours,” complained the 38-year-old. “They’d surely ride with their own people (Chinese-run tuk-tuk). They won’t ride with us.”

Transformed by Chinese investment, the pace of development in Cambodia has left many locals like him reeling from shock and anger in several ways, as the programme Insight discovers. (Watch the episode here.)

A country that had once struggled to keep up with its Southeast Asian neighbours is now one of the world’s fastest-growing economies. But has it truly prospered from China’s money?

Or will the investments trap it in a debt that would turn it into a client state?

Cambodia once struggled to keep up with its neighbours in Asean but is now a fast-growing economy.
The Cambodian flag.

ECONOMIC INVASION

China is the biggest foreign investor in Cambodia, accounting for nearly 30 per cent of the investment capital in the country in 2017, when Beijing pumped US$1.6 billion (S$2.17 billion) into the kingdom.

By the end of that year, construction contracts signed were worth a reported US$17.54 billion. But with China’s influence and presence getting stronger, resentment is building up among locals who are concerned that their livelihoods will be threatened.

According to figures last year from Cambodia’s Ministry of Interior, there are about 210,000 Chinese nationals living in the country, compared with just over 100,000 in 2017.

Of these, more than 78,000 are living in Sihanoukville Province, where Mr Rem has lived for the last 16 years.

TNSR Cambodia 2
Sihanoukville, named after the late King Norodom Sihanouk.

He has witnessed first-hand how its port city has been transformed by Chinese casinos, hotels and restaurants over the last few years.

READ: China brings casino boom to Cambodian town – but doom to local businesses?

The cost of living has gone up, and Cambodians who had moved to the city to work find themselves unable to afford the rents now, he said.

“(Landlords) don’t even want to rent to you,” he added. “They want to rent to the Chinese because the Chinese (can) offer a higher price.”

In recent years, Sihanoukville has seen nearly three dozen Chinese-run casinos spring up.
Over the past two years, Sihanoukville has seen nearly three dozen Chinese-run casinos spring up, with another 70 under construction.

Local businesses have also suffered, as the Chinese prefer to frequent the Chinese-run establishments. Mr Ek Vithean, for example, gave up his restaurant business to let out his eatery’s premises to a Chinese businessman.

While the 46-year-old is making more money from the rental, he laments the Chinese invasion.

“Khmer people aren’t selling anything any more because the Chinese are selling everything now,” he said. “They do everything themselves. If they rent or buy from us, then it’s okay.

“Now it’s even hard for me to find a place to have local soup … Those small businesses like street food stalls? The Chinese have also started doing those.”

The scene at a local Cambodian restaurant, which owner Vuth Ung blames on the Chinese.
The scene at a local Cambodian restaurant.

WHY THE INVESTMENTS ARE WELCOME

It is inevitable that there would be some losers, particularly locals who need to rent, said Mr Ou Virak, the founder of Future Forum, a think tank.

“Obviously, when there’s a lot of money coming in and all at once, there’d be a lot of changes (and) social pains associated with those changes,” he said.

If you’re poor (and) don’t own anything, then how do you benefit from the rising real estate cost?

With their livelihoods coming under threat, there is a fear among some Cambodians in Sihanoukville that their city will be too expensive to live in one day, forcing them to move out.

Prime Minister Hun Sen, however, maintains that despite the growth of Chinese business and residential enclaves, it is wrong to suggest that the Chinese have taken over Cambodia.

He has pledged to continue accepting Chinese aid and investment in the country, which have helped shore up the economy of one of the poorest nations in Asia.

Cambodian Prime Minister Hun Sen at Phnom Penh International Airport before flying to China in 2017.
Cambodian Prime Minister Hun Sen at Phnom Penh International Airport before flying to China in November 2017. (File photo: Reuters/Samrang Pring)

Sihanoukville city governor Y Sokleng described how Chinese development has benefited the people.

“Firstly, their investments have created jobs for our citizens. Secondly, our citizens (have become) more well-to-do in these past two years because the market value of their land increased,” he said.

Government spokesman Phay Siphan added that some farmers in Sihanoukville have become millionaires after selling their land.

“The money isn’t prejudiced against anybody,” he said. “We understand that the Chinese have (received) a lot of complaints from our people. But those people benefit from Chinese investment too …. They earn a lot of money.”

Real estate prices in Sihanoukville have skyrocketed in the past two years.
Real estate prices in Sihanoukville have skyrocketed in the past two years. (Photo: AFP/Tang Chhin Sothy)

STRUGGLES WITH EVICTIONS, LAND GRAB

Yet, forced evictions and land grab have become major problems.

Since the government began selling off land in 2001 to private investors – including Chinese and Vietnamese companies – for development, about 800,000 people have been displaced, according to the International Federation for Human Rights in 2016.

READ: Cambodians stand their ground against government’s land grabs

Between 2013 and 2015, the government collected about US$80 million through land sales. But because the Khmer Rouge regime had abolished land ownership, residents left without title deeds found themselves vulnerable to land grab by foreign companies and rich locals.

A protester being pushed back by district authorities as she demonstrates in support of land rights.
A protester being pushed back by district authorities as she demonstrates in support of land rights.

Mr Sun Sophat from Pu Thoeang village said several companies have claimed ownership of the land in his village and tried to drive out the residents.

“The market for the land was rising. The economy was improving, and the value of the land was rising. That’s why those companies claimed (to have legal documentation),” said the community representative.

To my knowledge, they wanted to get the land to sell it to Chinese companies.

Land rights activist Bov Sophea spent over a decade battling plans to develop her Boeung Kak lake village in Phnom Penh.

The dispute started in 2007 when the government leased the land to a company to develop the area, which residents believed would help the poor. But they were handed eviction letters instead.

Villagers who decided not to leave their homes were told to expect consequences. “They’d say, ‘Soon enough … you won’t even have a home or a single dollar,’” recalled Ms Sophea.

Armed security guards started to patrol the village, causing chaos. In 2012, she and 12 other women were jailed for their role in trying to stop the eviction.

Known as the Boeung Kak 13, the Cambodian women fought back against the land grab.
Known as the Boeung Kak 13, the women fought back against the land grab.

“My younger sister went down to fight for my release. They beat her and caused a miscarriage,” she added. “Until today, she hasn’t been able to conceive again.”

TOO HUGE A DEBT?

There are also broader concerns about the country’s growing debt. By the end of 2017, the government owed China more than US$4 billion, equivalent to about two fifths of Cambodia’s foreign debt.

The country is in danger of losing its flexibility in charting its foreign policy framework on its own, as Beijing is seen to be using its financial muscle, hoping to buy political influence and gain compliance.

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Beijing has pledged to help finance new airports and roads, including an expressway to connect Sihanoukville to Cambodia's capital.

For example, in 2016, Cambodia (and Laos) withdrew support for a strongly-worded statement by the Association of Southeast Asian Nations about Beijing’s activities in the South China Sea.

Just weeks later, the Permanent Court of Arbitration in The Hague dismissed China’s sweeping territorial claims to the waters, and Cambodia blocked any mention of this in another Asean statement.

“China’s money is just way too much,” said Mr Virak. “The smartest thing to do is to embrace China’s rise (and) presence but make sure we remain … somewhat independent, (with the) ability to make our own policy decisions.

“That’s easier said than done, given the money, the power and sheer numbers of Chinese.”

Asean has been stymied by Cambodia in responding to China's activities in the South China Sea.
Asean has been stymied by Cambodia in responding to China's activities in the South China Sea.

The loss of livelihoods, homes and even lives has left Cambodians in pain and anger. They want the government to listen to their woes and help improve their plight. But will the Hun Sen administration consider scaling back Beijing’s investments?

“What we ask of the government is to not develop the country over the tears of the citizens. We ask that the government think of the human rights and the livelihood of citizens,” said Ms Sophea.

“That’s all … Separate the companies from the citizens, not love the companies more than the citizens.”

Watch the episode here. The programme Insight is telecast on Thursdays at 8pm.

Source: CNA/dp

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