Concern Over Chinese Investment

Investment in Cambodia from Chinese companies is devastating the country's natural resources, an opposition party politician says.

hun-sen-pan-guangxue-305.jpg Hun Sen speaks with Chinese Ambassador Pan Guangxue during a road construction ceremony, Oct. 9, 2012.

Cambodia’s largest opposition party has expressed concern that China’s investment in the country is heavily skewed towards exploiting natural resources, wreaking havoc on the environment.

China is Cambodia’s largest investor by a wide margin, having poured U.S. $9.7 billion into the country over the past 18 years, a government report said Wednesday.

Most of the investment has been in energy, mineral resources, the garment industry, banking and finance, real estate, and tourism, it said.

But opposition Sam Rainsy Party lawmaker Son Chhay warned that China is having excessive control over Cambodia’s natural resources as companies from the Asian giant carry out extensive mineral exploration and logging and embark on hydropower projects in the impoverished country.

“Chinese investors are focusing on Cambodia’s natural resources,” with some of the projects wreaking devastation on Cambodia’s natural resources and forests, he said.

Investment in hydropower projects, such as the Stung Areng and Ta Tai dams under construction by Chinese companies in Koh Kong province, is causing the destruction of thousands of acres of forests amid logging activities, he said.

The Sam Rainsy Party has also called on Prime Minister Hun Sen’s government to better regulate bidding processes for construction and infrastructure projects that can help encourage competition and cut implementation costs.

Son Chhay said Chinese companies have been favored over those from other countries in securing projects such as the dams, allowing them to set costs too high.

“Chinese investors prefer to build hydropower dams because they can arbitrarily set the price [of the project] and they are offered longer concessions compared to other neighboring countries.”

“This is a problem that Cambodia should be aware of about Chinese investment in Cambodia. This is bad investment.”


Cambodia, Beijing’s top Southeast Asian ally, has borrowed vast sums from China in recent years to finance road, hydropower, and defense projects, many of which are contracted to Chinese firms.

“China gives us loans, but they allow companies to set high prices,” Son Chhay said.

Cambodia owes about U.S. $3 billion dollars in loans from China, he said, adding that the debt gives the giant neighbor too much political influence in the country.

Cambodia’s reported foreign debt levels vary, with the Sam Rainsy Party putting the country’s total foreign debt at over U.S. $10 billion in total, and the ruling Cambodian People’s Party and international sources giving a figure between U.S. $2 and $7 billion.

China is not giving Cambodia humanitarian aid, as perceived by many Cambodians, but rather loans it will have to pay back, Son Chhay said.

Many of the construction projects Chinese companies are granted through the loans, such as the building of national roads, are done at high cost and with “low quality,” he said.

The quality of the construction of National Road 7 came under widespread criticism for shoddy construction last year, including from Prime Minister Hun Sen.

Reported and translated by Samean Yun for RFA’s Khmer Service. Written in English by Rachel Vandenbrink.


Add your comment by filling out the form below in plain text. Comments are approved by a moderator and can be edited in accordance with RFAs Terms of Use. Comments will not appear in real time. RFA is not responsible for the content of the postings. Please, be respectful of others' point of view and stick to the facts.