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Can Cambodia Balance China with the West?

Wang Huning, a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee and member of the CPC Central Committee Secretariat. Xinhua/Rao Aimin

The recent statement by China’s Wang Huning, a member of the Political Bureau of the Chinese Communist Party, that China would find ways to help Cambodia to mitigate the risks deriving from the removal of Everything-but-Arms (EBA), was certainly a welcome piece of news.

However, it would not have gone down well with the European Union and the United States who already possess a prior assumption that Cambodia is a vassal or client state of China. Wang Huning’s message would probably aim to send a signal that China is prepared to assist Cambodia in all circumstances to counter against external pressures to be imposed by the EU.

Such a signal of overly showing coziness with China, despite how necessary it is, does not augur well for Cambodia’s efforts to convince the West that Cambodia is not a vassal or client state of China. The main objectives of Cambodia’s foreign policy are to stay independent and neutral, protect national sovereignty and interests through economic diversification strategy.

Economic diversification strategy here does not mean that Cambodia plays down the significant role of the EU and the US, given these are the two main export markets that China cannot replace at least in the next five years. The EU and the US will remain the main economic partners of Cambodia.

There is an increasing need for Cambodia to diversify its infrastructure development partners and maintain preferential trade treatment schemes from the EU and the US. The more development options the better for future development of the country.

Recently Cambodia has reached out to nontraditional trading partners such as Russia, the Eurasian Economic Union (EEU), India, Africa and the Middle East. This certainly indicates that the country is indeed trying to create leverages with countries to begin the process of hedging.

Cambodia is thriving to stay relevant in the international system by leveraging its international role. Taking side with any major power could push Cambodia into a geopolitical trap.

Some Cambodian leaders are aware of the risks stemming from over-reliance on any single major power. That is no such a thing as a “free lunch”. Hence, Cambodia must be cautious and has to adapt and adopt a strategy to mitigate geopolitical risks posed by over-reliance on China, either real or imaginary.

The $90 million defence deal with China, made public at the official meeting between Cambodia and China in Beijing in late April, needs to be more transparent so that suspicion and misunderstanding could be reduced.

The latest defence deal adds fuel to the brouhaha over the imaginary naval base, which in turn could further increase geopolitical risks for the Kingdom.

No matter how the optics look, the ongoing geopolitical rivalry between the US and China, which is set to escalate, will surely affect Cambodia. The US and its allies might choose to exert collective pressures on Cambodia, if they are not convinced that Cambodia is not a truly client state of China.

Economic pressures, such as revocation of the EBA might be used first. The EBA trade scheme allows Cambodia to export products other than weapons to the EU duty-free and quota-free. In 2017, Cambodia exported roughly $5.8 billion worth of goods to the EU, accounting for around 40 percent of Cambodia’s exports.

Over 99 percent of Cambodian exports to the EU, Cambodia’s largest export market, were eligible for EBA preferential duties, which included textiles, footwear, and agricultural products, such as rice. Since joining the trading scheme in 2001, the textile industry in Cambodia has experienced tremendous growth, and today employs around 700,000 workers.

The US and China have chosen Cambodia to be their competing ground. Recently US embassy and the Chinese embassy faced off over conflicting remarks on matters pertaining to historical issues from the military coup in 1970 to Khmer Rouge era to trade and foreign policy.

Cambodia’s ability to implement hedging strategy to dilute and mitigate geopolitical risks is crucial for long-term peace and stability in the country. Competition between China and the West will continue to influence Cambodia’s foreign policy and will chart the nation’s course as it navigates through turbulent times ahead.

Cambodia is vulnerable to geopolitical rivalry and a potential game changer in Southeast Asia and the Indo-Pacific region. The US and the EU might have calculated that by putting pressures on Cambodia they could force Cambodia to keep distant from China.

Reality proves the other way. The threat to revoke the EBA, which costs Cambodia up to 650 million dollars a year, will force Cambodia to fall completely into China’s camp and this might be an irreversible trend.

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