Cambodia has cancelled a counter-terrorism exercise with Australia, just two months after holding its first major army drills with China.

Key points: Cambodia "will be occupied by two major elections", "budget constraints" also a factor

Cambodia "will be occupied by two major elections", "budget constraints" also a factor Suspended US military exercise Angkor Sentinel last month

Suspended US military exercise Angkor Sentinel last month But Cambodia hosted Chinese troops for "humanitarian aid and disaster relief exercises" in December

Dawn Kouprey was one of the cornerstones of Australia's Defence cooperation program with Cambodia and a show of healthy military-to-military relations.

"We have decided to suspend the [exercise] in Cambodia, which is Dawn Kouprey," the Cambodian Ministry of Defence's Department of Politics and Foreign Affairs' Sun Samnang said.

"The reason for that is that we will be occupied by two major elections."

Sun Samnang said "budget constraints" were also a factor.

Cambodia is due to hold commune elections in June and national elections in 2018.

'Slap in the face to Australia'

Australian National University Strategic and Defence Studies Centre's John Blaxland described the news as "a bit of a slap in the face to Australia".

Dr Blaxland said Australia played a crucial role in Cambodia's "post-Khmer Rouge renaissance", which was partly brokered by then-foreign minister Gareth Evans, with Lieutenant General John Sanderson leading UN troops in the 1990s.

More than 1,200 Australian troops were deployed to Cambodia as part of the United Nations Transitional Authority in Cambodia (UNTAC).

Dr Blaxland said the suspension of Dawn Kouprey also hurt Cambodia's own interests.

"I'll wager that those special forces people involved in Cambodia are very disappointed that they may have been instructed to turn this off," he said.

Cambodia will continue to accept tertiary education scholarships, officer training and English language courses from the Australian military.

The South-East Asian nation will also send its soldiers to a separate counter-terrorism event in Australia in 2018, called Dusk Kouprey.

Sun Samnang said the Cambodian Government would decide on a "case-by-case" basis whether to host joint military exercises held on Cambodian soil after 2018.

Australia's Defence Department, Department of Foreign Affairs and Trade and embassy in Phnom Penh were contacted on Monday for comment.

Cambodia's alliances shifting towards China

The scrapping of joint training operations reflects a wider shift in Cambodia's strategic alliances.

Last month, Cambodia announced it would be suspending the large military exercise with the United States known as Angkor Sentinel, because it was too busy with elections.

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But in December, Cambodia hosted Chinese troops for Golden Dragon, eight days of "humanitarian aid and disaster relief" exercises.

The event involved 377 Chinese soldiers and 280 Cambodian troops, according to the China Military website run by China's People's Liberation Army.

Cambodia is one of China's closest allies in the region.

Prime Minister Hun Sen showed his loyalty in 2012, while hosting the Association of South-East Asian Nations (ASEAN) summit.

Hun Sen has poured money, Chinese equipment and foreign military training into the military and military police. ( Supplied: The Phnom Penh Post )

Cambodia blocked its neighbours on a resolution about the South China Sea dispute and the regional bloc was unable — for the first time in its history — to issue a joint communique.

The fiasco was repeated at last year's ASEAN summit in Laos, with the 10 nations releasing then retracting a communique.

Phnom Penh has also been relatively quiet about upstream dams in the Mekong River that threaten catastrophic damage to its fisheries and basic food security.

China, in return, has been generous.

During a state visit in October, Chinese President Xi Jinping pledged $308 million in aid, erased almost $117 million in state debt and offered nearly $20 million in military support, according to The Cambodia Daily.

Importantly, Chinese money is not accompanied by demands to improve human rights or strengthen democracy.

Hun Sen was shaken by the Opposition's popularity at the last poll and last week changed the political party law, in what has been described at a "triumph of dictatorship".

Australia remains silent on PM Hun Sen's aggression

The various armed forces play an important role in Cambodia's often-bloody politics.

While the police force should, in theory, play the primary role overseeing elections, the Ministry of Interior is run by one of Mr Sen's factional competitors within the ruling party, Deputy Prime Minister Sar Kheng.

In recent years, Hun Sen has poured money, Chinese equipment and foreign military training into the military and military police, which have been deployed to attack protesters in the past.

Australia has remained silent about the Prime Minister's assault against the Opposition, civil society and citizens dispossessed of their land by crony companies.

That diplomatic silence is widely seen as being linked to immigration.

Cambodia is the only country to have resettled Australian-bound refugees from Nauru, as part of a $55-million deal.

However, most of the refugees have left Phnom Penh and the Cambodian Government has shown little interest in supporting arrivals.