Wider World by CS

New summit, new deals

Monday, 19 November 2012

Cheang Sokha

Prime Minister Hun Sen (2nd R) and China’s Premier Wen Jiabao (C) inspect an honour guard  in Phnom Penh, Sunday, Nov. 18, 2012. Photograph: Heng Chivoan/Phnom Penh Post

In a move that’s become de rigeur for the lead-up to Cambodia’s ASEAN summits, the chair and China last night signed off on hundreds of millions of dollars in trade agreements and reiterated their desire to boost bilateral trade to $5 billion by 2017.

Eang Sophalleth, personal spokesman for Prime Minister Hun Sen, told reporters that the inking was done following a bilateral discussion between Hun Sen and his Chinese counterpart, Wen Jaibao, who arrived in Phnom Penh yesterday evening.

He said that during the bilateral meeting – held behind closed doors and sealed off to the media – the premier told Wen Jibao that the development of Cambodia was tied in part to Chinese aid and loans, and requested further assistance.

“Prime Minister Hun Sen has proposed boosting the trade volume between the two countries to $5 billion by 2017,” said Eang Sophalleth, referring to a figure first advanced in April during a meeting between Hun Sen and Chinese President Hu Jintao on the eve of the ASEAN summit.

The two leaders also witnessed the signing ceremony for a number of joint ventures, said Sophalleth. The projects total hundreds of millions of dollars and include a water treatment plant in Kampong Thom, an education, training and rehabilitation center in Preah Sihanouk and a cement factory in Kampot.

While details were not immediately forthcoming on all the projects, officials at the Cambodia Cement Chakrey Ting Factory confirmed the premiers signed off on a $67 million Bank of China loan for the $100 million-plus joint venture. 

According to Sophalleth, Wen Jiabao said that China will review Cambodia’s request for further aid. China has already assented to provide approximately $52 million in grant aid to Cambodia for the development of its water resources.

“China will continue to fully support Cambodia for its social and economic development and will cooperate with Cambodia whether bilaterally or multi-laterally for the development of Cambodia,” Eang Sophalleth quoted Wen Jiabao as saying to Hun Sen.

In recent years, China has drastically increased loans, aid and investment into Cambodia – which has welcomed the country’s “no strings” policies even as economists and political observers have warned that the loans’ high interest rates could prove problematic for Cambodia in the future.

The jump follows a regional trend, which has seen a marked uptick in Chinese investment over the past decade. Surin Pitsuwan, the outgoing secretary general of ASEAN, praised the arrangement, saying Chinese money had been a major boon to the region.

“Our free trade agreement with China has been working wonderfully, the countries of Southeast Asia have been benefiting a great deal, trade has jumped almost 20 per cent a year and we hope that there will be more investment from China into the landscape of Southeast Asia,” he told the media during a press briefing on Sunday.

“Trade overall has grown tremendously. We welcome China’s accommodation, we welcome China opening up the markets and, as I said, we expect more investment from China,” Surin said.