Deals Kick Off Cambodian Visit

China inks several deals with Cambodia as ties between the two countries grow stronger than ever.

hunsenvisit305.jpg Cambodian Prime Minister Hun Sen (R) and Chinese Premier Wen Jiabao (L) at the Great Hall of the People in Beijing, Dec. 13, 2010.

China and Cambodia have signed a slew of high-profile investment deals at the start of Premier Hun Sen's visit to Beijing, including a multimillion-dollar coal-fired joint venture power plant, underscoring Beijing's growing business and strategic interests in the Southeast Asian state.

Chinese Premier Wen Jiabao and Hun Sen agreed after talks on Monday to establish a "comprehensive strategic partnership for cooperation" between the two countries, reports by official Chinese media said.

The two countries signed 13 deals on cooperation in areas such as energy, infrastructure, finance, and consular affairs, they said.

Ahead of the five-day trip, Hun Sen said 14 agreements would be signed with China.

"Possibly, the 15th agreement on exporting cassava from Cambodia will also be signed," the Cambodian premier said during the inauguration of a new pagoda in Sen Sok district of the Cambodian capital Phnom Penh.

A construction agreement for the U.S. $362 million coal-fired plant in Cambodia's southwestern Sihanoukville province would be among the inked ventures, he said. Others include loan and financial aid packages for construction of a national highway in Cambodia's southern Kampot province and a canal.

China would also assist with the construction of a second Chruoy Changvar bridge in Phnom Penh and a bridge across the Tonle Bassac in Takhmao district of Cambodia's southern Kandal province, Hun Sen was quoted as saying.

"In the past, we already signed a rice export agreement with China. We hope to sign the cassava exports to China during the visit, and we are also  suggesting a corn export deal with China," the Cambodian premier said.

"Our farmers will make use of rice and cassava exports because the Chinese market is very big," Hun Sen was quoted as saying by China's Xinhua news agency.

The power plant, in Preah Sihanouk's Stoeng Hav Industrial Zone, will have a capacity of 270 megawatts, the Cambodian government said in a statement.

It will be built and operated by Cambodia International Development Group, a joint venture between unnamed Cambodian and Chinese companies on a 33-year concession which begins next year, Cambodian media reported.

Strengthening ties

Hun Sen's state visit is aimed at further strengthening already close bilateral ties.

The signed deals are a continuation of a long-running relationship which has put China at the top of the list of foreign investors and aid donors in Cambodia.

Beijing has poured billions of dollars into Cambodia in recent years.

Nearly 400 Chinese companies have already invested in key infrastructure projects, including hydroelectric dams and coal power plants.

The Chinese played an important role as counterweight to Vietnamese influence during the 1970s and 1980s, but U.S. Secretary of State Hillary Clinton warned during a recent visit that Cambodia should not become "too dependent" on Beijing.

Southeast Asian nations are increasingly weighing up the benefits of being more closely aligned with Beijing or with Washington, as China begins to make its presence strongly felt in the region.

Trade on the rise

Last month, officials estimated that Chinese investment in Cambodian infrastructure projects could amount to as much as U.S. $1.6 billion dollars over the next five years.

Chinese-Cambodian trade totaled more than U.S. $900 million in 2009.

China also inked a U.S. $1.2 billion aid package to Cambodia soon after Hun Sen's government ordered a group of 20 Muslim Uyghurs returned to China when they applied for U.N. refugee status while fleeing ethnic violence at home.

Beijing has denied any link between the two events.

Sino-Khmer relations began in 1958. During the 1970s, Maoist China was one of only a few nations to maintain diplomatic links with Pol Pot's ruling Khmer Rouge, who were blamed for the deaths of up to two million people.

Closer ties developed in the 1990s after the Paris Peace Agreement of 1991, which paved the way for Cambodia's first general elections in decades.

Former Cambodian King Norodom Sihanouk has always maintained close personal ties with Beijing and keeps a second home in the Chinese capital.

Hun Sen will also have talks with Chinese President Hu Jintao on Wednesday, and travel to the northern port city of Tianjin and the eastern city of Nanjing.

Written by Luisetta Mudie.


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