As such, this week, Xi and Suu Kyi signed 33 trade deals via the One Belt One Road initiative, covering topics from politics, trade, investment, telecommunications, and mammoth infrastructure projects, as well as the creation of the Myanmar-China Economic Corridor sharing transport, energy, production capacity, humanitarian and cultural exchanges, border areas, and regional affairs (Times of India, 2020). We have also seen that in the fiscal year of 2018-2019, China represented 65 out of 113 approved investments into Yangon (the previous capital of Myanmar), Myanmar’s commercial centre. There is also a new project of a new, modern city opposite Yangon (Lintner, 2019).

There are promises of developing Yangon (Mynamar’s largest city) and introducing rail lines to Mandalay from the Chinese border, a technology China excels at, and a new port to be built in the Rakhine zone (Times of India, 2020; Lintner, 2019). Notice that many of these industries are within the Made in China 2025 project. However, the exact details of these 33 deals are not transparent, and political opponents and protestors have already begun to protest against the deals, as well as a widespread belief that cooperation with China is not likely to benefit the working classes (Times of India, 2020). In the case of tourism, a high-level Burmese official complains that the tourist boost has not helped common Burmese, as the Chinese tourists go to Chinese hotels, eat at Chinese restaurants, use Chinese businesses, and then leave (Lintner, 2019). We shall see this repeat in Cambodia, later this article.

This isn’t the first time China has tried to create such a corridor; we have seen the China-Pakistan Economic Corridor already, which has had $60 billion funnelled into it. Much like that, China has already promised $1.3 billion deep sea port, allowing for Chinese goods to enter the Bay of Bengal (Times of India, 2020).

We have seen that Japan, seeing the increasing influence of China in Myanmar and having its’ own regional leadership ambitions, has also recently asked the international community to stop criticising the Myanmar government lest they fall under the Chinese completely (Human Rights Watch, 2018a).

Cambodia

“As comprehensive strategic partners and ironclad friends, we are siblings who share a single future,” - Prime Minister Hun Sen (Nachemson, 2019)

The previous administration under Prime Minister Hun Sen was criticised for a lack of human right and human rights abuses (Fullerton, 2019); we see once again that when the West turns away from a country, China is quite happy to accept it, support it, and add it to the growing number of Sino aligned countries.

As the European Union increased sanctions on Cambodia, and the United States restricted visas and suspending aid of $8.3 million, because Prime Minister Hun Sen arrested his opposition before the election and dissolved the opposing National Rescue Party among many other human rights abuses, China promised to provide support against these sanctions (Nachemson, 2019). Prime Minister Hun Sen himself has now ruled since 1985, and under his regime, there is no freedom of speech nor freedom of media either in person, social media, or in print (Human Rights Watch, 2019b). Japan, worried about rising Chinese influence, continued to support $168 million over 2018 and didn’t push to honest elections in 2018 (Human Rights Watch, 2018b).

Cambodia has an Everything But Arms trade deal with the European Union; that they could export anything but guns, in other words, and provided $676 million to the Cambodian economy every year; this is currently under risk (World Bank, 2019). However, Chinese investment into Cambodia increased from $3.6 billion in 2016 to $6.3 billion in 2017, and a total of $7.9 billion between 2016 to 2019 (Nachemson, 2019; Xinhua, 2019a). It doesn’t sound like much, but it represents around 9% of Cambodias’ annual GDP in 2017 (World Economics, 2018). With China offering so much, no wonder Prime Minister Hun Sen feels no need to bow to Western ideals. That’s a lot of influence in a country, and we shall see the effects of this influence later.

Cambodia has received an quite a few One Belt One Road projects; over the course of 2013-2017, it received $4.1 billion (Fullerton, 2019). We shall look at a couple, and what it means. Cambodia is located in a very important location; it sits between the Bay of Bengal (pressure on India), the Gulf of Thailand, and the South China Sea (reinforcing Chinese ability to claim the sea against U.S. freedom of navigation missions). This country holds a good position for anyone trying to have air or naval power in any of these areas, such as against an increasingly militarist Indonesia, for example.

Apparently the United States think so as well. Recently, there has been the news that a new airport is being built in the jungles of Cambodia. What is concerning is the shape of the runway, which has a sharp turning bay. This is a sign that this runway is going to be used for military aircraft. This is important; our article on the current state of the Chinese navy shows that they have trouble using air force away from the mainland due to the limited technology of the current Chinese aircraft carriers; this would go someway to mitigating this weakness (Fullerton, 2019).

This airport is placed near several ports, which the U.S. fears will also be used by Chinese soldiers; this may be due to the Cambodian Prime Minister Hun Sen signing a secret deal with the Chinese to allow exclusive use of a naval institution near Dara Sakor, and possibly another base in the Gulf of Thailand. China has denied such allegations, stating that the building was purely for a resort; the Pentagon responded that the building far exceeded the size of a resort (Fullerton, 2019).

We have also seen a 99-year lease of land to China once again; like Colombo in Sri Lanka, 20% of Cambodias entire coast line has been leased to a Chinese state-owned company (Nachemson, 2019).

Cambodia has been moving closer to China over time; China invested $90 million into Cambodia’s defence sector in 2019 during the second One Belt One Road forum. Prime Minister Hun Sen has also asked Chinese companies to develop a railroad system in Cambodia as well. Another state-owned company China Road and Bridge Corp. has promised to build a $2 billion expressway from Phnom Penh to Sihanoukville as well, the first expressway in Cambodia (Nachemson, 2019).

The European Union also placed a tariff on Cambodian rice of $200 per tonne of rice. However, Chinese imports of Cambodian rice are set to increase from 300,000 tonnes to 400,000 tonnes (Nachemson, 2019); this is due to two reasons.

China can easily direct higher purchases of rice; its the easiest tool China has in trade, and is the basis of the new phase one trade deal China needs food, and this is another source of that which will reduce dependance on the U.S.

The Case of Sihanoukville

We discussed the city of Colombo, Sri Lanka is a previous article. Colombo is a case of Chinese investment gone well. We shall consider the case of Sihanoukville, a case where initial investment went well, before Chinese investment faltered and Chinese influence led to unhelpful changes in the legal environment.

The city of Sihanoukville was a target of One Belt One Road, and flooded by Chinese developers, bringing Chinese workers and Chinese infrastructure, with President Xi promising a $2 billion expressway to link it with the capital city of Phnom Penh, with Chinese companies building special economic zones, power stations, and ports. What really took off though was gambling; 90% of the $3.5 to $5 billion of gaming revenue was estimated to take place online. Of that, it was estimated to have 200 online gambling services employing 200,000 people (Turton, 2020).

Things went bad when the local population borrowed heavily in businesses to cater to the new Chinese influx of workers and opportunities as well as nearby property; all seemed well. Until President Hun Sen announced that online gambling would be criminalised in August 2019; 4 of the local casinos have closed and 7,000 employees have been laid off. It is believed that this decision by Hun Sen was made by pressure from China, whose mainland population was targeted by Cambodian scammers and used as money laundering by illegal gangs in China. 100,000 Chinese left; half built buildings, broken infrastructure, and closing the local commercial businesses; they had no loyalty to the area, and it was left unfinished (Turton, 2020). China has promised a second round of investment in 2019 (Nachemson, 2019).

We know that economics are linked, and the effect fall throughout the city. After this event, in the food industry, orders from local restaurants drop by 80%, 87% less eat-ins, daily revenue in restaurants dropped from $1,500 to $200, with food delivery wages dropping from $3,000 to $800. 58% of restaurants stopped (Turton, 2020).

Moving to the housing industry, we found that housing leases dropped by 96.7%, land leasing dropped by 97.5%, a 50% drop in house sales, and a two-thirds drop in land sales. Commercial rental prices dropped by 30%, with hotel prices dropping by 50% (returning to pre-OBOR levels). Many small or medium sized projects have either downsized or completely stopped. (Turton, 2020). China has promised, however, that the next round of investment will increase employment by four times the initial investment round with 800,000 new jobs (Nachemson, 2019).

Regardless of the reasoning (opposing gambling and illegal activity is hardly something I can complain about), it shows that when you take Chinese money, your ability to refuse decreases even at the cost of the domestic standards of living, and if the opportunity shrinks, the projects are completely abandoned and left to either rot or force the local government to pick up the tab to finish the projects; the Cambodian government has earmarked $300 million to finish the roads and to rebuild the sewage systems (backed by Beijing, however) (Turton, 2020). Thus is the danger of One Belt, One Road. A greater danger is that, as the Chinese economy slows down, the chance of them continuing to invest into Cambodia may drop as well; Cambodia now sits hoping that the E.U. won’t stop the Everything But Arms deal, or that the Chinese economy keeps going (World Bank, 2019).

The massive amount of influence that China has is causing domestic unrest; some complaining about the massive influence China has, some complaining about the influx of Chinese workers, some complaining about Chinese companies outcompeting local companies; some believe that rising tensions could lead to issues in Chinese goals in Cambodia (Nachemson, 2019).

However, even here, we can see the attraction for undeveloped countries to take Chinese money. Sihanoukville had, due to this Chinese investment, a housing boom, a wage boom, a booming food market, a growing middle class, and developed infrastructure. If the gamble pays off, Chinese investment is a fast injection of capital and growth into the heart of a developing country, who often has a government who needs to be seen as doing something to maintain power.