Prime Minister Hun Sen returned from a five-day visit to China yesterday bearing with him $300 million in new loans for infrastructure projects, as well as $15 million in aid.
During the visit, an additional 12 agreements and protocols were signed, including several major infrastructure and agriculture loans that had already been pledged.
Speaking at Phnom Penh International Airport yesterday upon the return of the premier’s delegation, Foreign Minister Hor Namhong defended Cambodia’s close economic relationship with China, arguing that China’s rapidly growing economy benefited the entire world.
“China is growing in every sector-economy and finance and military-so there is no one who can stop them in world politics,” he said.
“As Samdech Techo [Hun Sen] has mentioned before, the development and growth of China will bring Chinese tourists to visit foreign countries including Cambodia. Would we rather accept Chinese tourists who visit Cambodia and spend money here, or Chinese refugees? It is easy to accept this simple point of view. Which one would be better off?”
In November, top Chinese legislator Wu Bangguo pledged $1.6 billion in support for 23 projects to be carried out between 2010 and 2015. He also announced that China would cancel $4.24 million in debt. Just before Mr Wu’s visit to Phnom Penh, China announced it would provide a $600 million grant for Cambodia to build a missing segment of the planned Singapore-Kunming rail link, between Phnom Penh and the Vietnamese border.
And last December, shortly after Cambodia deported 20 ethnic Uighur asylum-seekers to China, prompting an international outcry, Chinese Vice President Xi Jinping arrived in Phnom Penh with $1.2 billion in interest-free loans.
The most recent round of Chinese funding will go to three major projects: the construction of National Road 4 from Preah Vihear to Laos; the construction of National Road 6 from Mondolkiri to Ratanakkiri; and an unspecified irrigation project on the Vaico River in Svay Rieng province. Each will be allocated $100 million, said Mr Namhong.
The $15 million grant was given to Cambodia “for economic development,” according to Foreign Ministry spokesman Koy Kuong.
Also this week, funding was firmed up for several already announced projects. The Export-Import Bank of China will be providing nearly $167 million in loans for four major infrastructure projects that are already under way: the new Chroy Changva bridge in Phnom Penh, another new bridge spanning the Bassac River in Kandal province’s Takhmau City, a 95-km segment of National Road 41, and the Stung Pursat Dam in Pursat province.
Other deals inked during Mr Hun Sen’s visit include a $53 million contract for Chinese company Sinohydro Corporation Limited to build an unspecified irrigation project on the Sreng River, which flows through Siem Reap and Oddar Meanchey provinces.
The two countries also signed a consular protocol and another that regulates tapioca export from Cambodia to China.
And Canadia Bank signed two long-term loan agreements with the China Development Bank for $20 million and 66 million renminbi (about $10 million).
“We are basically looking to put more funds into agriculture and related areas,” said Dieter Billmeier, the bank’s vice president, of the loan.
Bilateral trade between Cambodia and China has already reached $1.1 billion this year, and both governments are pushing to raise that figure to $2.5 billion by 2015, according to Foreign Minister Mr Namhong.
He said Chinese leaders had expressed interest in importing Cambodian cassava, corn and sesame as well as rice.
“China has 1.3 billion people who will use our agricultural products,” he said.
(Additional reporting by Julia Wallace)