Chea Serey, Assistant Governor of National Bank of Cambodia, believes the newly upgraded China-ASEAN comprehensive strategic partnership will deepen the relationship. She also shared her views on China-Cambodia trade and the Belt and Road Initiative.
Wang Guan: Governor Chea, I am sure you’ve heard this as much as I do. Many Western commentators say that Cambodia is “too reliant on China economically”, pointing out that China holds nearly half of Cambodia’s national debt as well as the ever increasing Chinese investment in your country. What will be your response?
Chea Serey: As an economist and a trained accountant, I will speak from the number that I have in front of me and not on perception. If you look at the government public debt, Cambodia government public debt, it stands at about 32% of our GDP and that is well below the threshold by the IMF and of the 32%, 45% of the debt is owed to China. But this is a small percentage.
Second of all. if you look at China investment in ASEAN, which stands at $14.3 billion in 2020, Cambodia received $1.2 billion. That is less than 8% of the total investment. So to term us as “too relying”, I think it’s a bit exaggerated. But let’s be fair that Cambodia is a country that has been ravaged by war. We are the government. Our role is to develop the country, to create job for our people, to reduce poverty. And therefore we welcome investment from any country, from any development partner. And we did receive investment from other countries as well. I mean, in the 90s and in the year 2000, we received a lot of assistance from our development partners, the World Bank, the Asian Development Bank. But we also received assistance from the United Kingdom, the United States, from Malaysia, South Korea and Japan. But in the last 10 years, we’ve seen China investment and development assistance taking over those countries, but it’s not over too relying at the moment. And again, as our Prime Minister mentioned, we still walk up whoever wants to come to Cambodia. The country is open.
The Cambodia-China relationship went back to long time ago. Actually, if you have been to one of our temples or actually many temples, you will see the pictures of trade between the Khmer people and the Chinese people back then.
And in fact, one of the famous explorer from China, Zhou Daguan, made his journal which was one of the most important witnessing of the life in the kingdom back in the 12th century. As you also mentioned out the relationship between our leaders. Late king Sihanouk and late premier Zhou Enlai in the 60s has also strengthened that relationship and you’re rightly pointing out the term “strong as steel” Cambodia-China relationship. We’ve had bilateral trade with China in 2020 – just give you some numbers – the trade between our two countries reached about 8.2 billion U.S. dollars. And we expect it to expand to $10 billion in 2023 in term of investment.
We’ve also had a lot of developmental assistance from the government of China, particularly in building infrastructure and in the sector of energy and mining. But we’ve had this China-Cambodia free trade agreement. Hopefully, it will be going into full force in 2022 and we look forward to seeing more relationship between the two countries.
Wang Guan: This week, China and ASEAN elevated their relationship to comprehensive strategic partnership – one of the highest designation of the relations, cooperation among governments. How do you see that new designation impacting lives and economies in ASEAN and in your country Cambodia in particular?
Chea Serey: I think that on the top of the existing initiative like the set the ASEAN free trade agreement with China, we also have the Lancang-Mekong initiative for Cambodia, Laos, Myanmar, and Vietnam initiative with China, where it helps the CLMV country, we term it, to reduce developmental gap with our neighboring countries.
I’m sure that this new strategic, comprehensive partnership will deepen the relationship. And especially from the speech of President Xi, there was a clear sort of goal and it’s very promising. He mentions about $1.5 billion in assistant to ASEAN for the next three years to recover from COVID. He also mentioned to increase import from ASEAN country worth $150 billion and particularly on agri products.
Now I want to focus on agriculture product, Cambodia export to China about 1.2 billion, mostly in agricultural products, but we import about $7 billion from China. So there are rooms for improvement in terms of virtual trade, but I think in term of agri product and if that is what President Xi mentions, increasing import from ASEAN, focusing on agri product, I think this is where the opportunity lies for Cambodia because we have 60% of our people in the farming sector.
Cambodia still has a lot of land that has been not yet exploited and therefore we believe that we can fill that gap with agri products and I do believe that China is also looking for reliable suppliers of food.
Wang Guan: Indeed, agricultural cooperation can be crucial. Also we know that Cambodia joined the Belt and Road Initiative since its inception. What do you make of this initiative, The Belt and Road Initiative?
Chea Serey: I can’t talk about other countries, but I can speak for Cambodia that we have a lot benefited from The Belt and Road Initiative, particularly a lot of infrastructures. I mentioned earlier the country was ravaged by war; a lot of our basic infrastructure was destroyed. And so with this Belt and Road Initiative, we were able to rebuild roads and bridges.
And recently through the BRI, we are going to have our first highway from Phnom Penh to Sihanoukville. That is to the great benefit for Cambodia because Sihanoukville is a port city and we need that connectivity to improve our logistic cost and trade. So definitely this is something that we have also benefited a lot. CGTN
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.
