Is Beijing hitting out at offshoring in Cambodia?

In a telling article published this week in The Diplomat, a strong case was made by two Beijing-based analysts warning investors about the dangers of offshoring garment production from China to Cambodia and Vietnam. With regard to Cambodia, the authors warned firms considering moving production southward about its relatively high labor costs, criticized the country’s supply-chain structures, commented on the relatively low productivity of Cambodian workers, and warned that the garment sector in Cambodia was regularly subject to strikes because of the industry’s unionized workforce.

They aren’t the only ones concerned about the future of the Cambodian economy, and they began by quoting Ken Loo, secretary general of the Garment Manufacturers Association in Cambodia, as saying that twice as many garment factories have closed in the first six months of this year than the whole of 2018, a worrying trend since the garment sector is the country’s largest single employer and contributes the most to its export-driven economy. But the piece is remarkable as Chinese authors rarely openly criticize Cambodia, a country Beijing has strongly courted through an enormous influx of aid and investment, resulting in Phnom Penh being widely viewed as China’s closest ally in Southeast Asia.

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