Cambodia Scores More Aid From China

China agreed to provide its ally Cambodia with aid and investments totaling more than U.S. $2 billion during Cambodian Prime Minister Hun Sen’s five-day visit that wrapped up Wednesday.

Beijing signed deals for U.S. $48 million in grants and U.S. $500 million in soft loans for mostly infrastructure projects, adding to the billions of dollars in previous assistance to its impoverished neighbor.

The fresh loans will help Hun Sen’s government pave 400 kilometers (250 miles) of roads a year over several years, Cambodia’s Minister of Commerce Prasidh said.

"The assistance and investment from China is very important for Cambodia's social and economic development," he told reporters at a press briefing in Phnom Penh after Hun Sen’s return from Beijing.

The two sides also signed a memorandum of understanding on establishing an oil refinery project in southern Cambodia “with an investment of 1.67 billion U.S. dollars,” according to China’s state news agency Xinhua.

The China Development Bank, China Export and Credit Insurance Corporation, and China Perfect Machinery Industry Corporation (Sinomach) along with the Cambodian Petrochemical Company are investing in the 5-million ton refinery, which is Cambodia’s first.

In December, Sinomach President Zhang Sugang said the oil refinery will cost U.S. $2.3 billion and that it will take 36 months to be constructed on the 80-hectare (200-acre) area in between Sihanoukville and Kampot.

Other deals inked during the trip covered projects such as irrigation systems and the construction of two bridges across Cambodia’s Bassac River.

China has helped Cambodia to build seven bridges and 2,000 kilometers (1,200 miles) of roads over the past decade, Cham Prasidh said.

Transparency concerns

Opposition lawmakers questioned the transparency of the deals, expressing concern that Hun Sen’s Cambodian People’s Party was giving the projects to well-connected companies that he said did low-quality work.

“The government must be held responsible if it is using the loans for low-quality construction linked to corruption,” Sam Rainsy Party lawmaker Son Chhay told RFA’s Khmer Service.

The quality of a Chinese company’s construction of a key Cambodian highway—National Road 7—came under widespread criticism for shoddy work last year, including from Hun Sen.

“Any country providing the loans must also be responsible,” Son Chhay said, adding that opposition parties would re-examine the deals if they win this year's upcoming general election.

China is Cambodia’s largest investor by a wide margin, having poured more than U.S. $9.7 billion into the country over the past 18 years, according to a government report in February.

Critics say China has used the financial assistance to buy Cambodia's diplomatic support.

In a joint statement issued at the end of Hun Sen’s visit, the two countries pledged to step up cooperation in regional mechanisms such as the Association of Southeast Asian Nations (ASEAN) and reaffirmed a target to boost annual bilateral trade to U.S. $5 billion by 2017.

During his trip, Hun Sen met with China’s President Xi Jinping on the sidelines of the regional Boao Forum conference in Hainan province and held talks with China’s Premier Li Keqiang in Beijing.

He also paid a visit to the China Aerospace Science and Technology Corporation, which is in negotiations to sell a communications satellite to a Cambodian company in a deal that could be worth U.S. $300 to $400 million, Cham Prasidh said.