Analysis | How ‘new’ Chinese revived an ‘old’ ethnic dominance in Cambodia’s economy
- Chinese ‘old’ and ‘new’ keep the economy of Hun Sen’s Cambodia humming
- But investment by Beijing has also entrenched the patronage system and given rise to anti-Chinese sentiment
Political interdependencies have emerged alongside the influx of Chinese investments, businesses and economic migrants in Cambodia since the 1990s. The majority of Cambodia’s garment factories, which account for more than three quarters of total exports, are owned and managed by Chinese from mainland China, Hong Kong and Taiwan. China is the biggest investor in Cambodia, adding nearly US$5.3 billion to the economy between 2013 and 2017. Officials hope that annual bilateral trade between the two countries will reach US$10 billion in 2023.
In all, with Chinese investors, traders, service entrepreneurs, factory managers, tourists, diplomats, teachers, journalists and subcontractors flocking to Cambodia, China’s influence over economic and political affairs in the small Southeast Asian country is undisputed.
In considering the ways in which China’s new-found assertiveness affects Cambodian society, the perspective of Cambodia’s domestic private sector is intriguing for two reasons.
First, the private sector reveals an internal division between the politically connected and the bereft. An exclusive group of tycoons has been co-opted by top officials of the People’s Party. They receive lucrative benefits in business – including import monopolies, public contracts and land concessions – in return for loyalty and financial contributions to individual party officials and the ruling party as a whole. Meanwhile, the lion’s share of the private sector comprises of small and medium-sized enterprises (SMEs) – mostly family-owned and operated – that cope without political support and instead try to steer clear of lower-level rent-seeking officials.
Second, most entrepreneurs in Phnom Penh, tycoons and SME owners alike, are children or grandchildren of Chinese migrants who came to Cambodia, especially during the French colonial period and upon Mao’s takeover of China.
Migration from China to Cambodia largely ceased after decolonisation in 1953, and resumed only towards the end of the 20th century.
