Investment Or Imperialism? Tracking China’s Big Ambitions In Cambodia
A few years ago this scene would have played out in China. More specifically, it would have played out in a Chinese coastal region to which millions of rural folks had arrived looking for work. A huge hangar, piles of fabrics of all colors at both ends, and some 200 heads lowered over sewing machines set up one behind the other. The atmosphere is not oppressive, just focused. But the workers here are too dark-skinned to be Chinese – though there are some: the managers of this clothes factory on the outskirts of the Cambodian capital Phnom Penh. From his office next door, He Enjia directs operations at Sunkind Textile. He left China in 1996 to set up his first factory in Cambodia. At the time, he was a pioneer. He moved for one reason – to get around export quotas on Chinese fabrics. Sixteen years later the sector has exploded. It generates over $4 billion of revenue a year, which makes it Cambodia’s biggest export by far. In a country of only 14 million inhabitants, the textile industry employs over 300,000 in the Phnom Penh region and plays a major role in the annual growth of 7% on average that the kingdom has been experiencing over the past decade. Attracted by the legal framework, which is very favorable for investors, the Chinese have taken the lead. “Cambodia is the easiest Asian country to invest in,” says Daniel Zarba, Director General of the Franco-Cambodian Chamber of Commerce. What’s more, the cost of production is lower in Cambodia than it is in China. “Here a worker costs on average $150 a month compared to $600 in China. Even if you take into account the fact that Cambodians are less productive, it still means your labor is two times less expensive,” says He Enjia. … The textile industry is part of a much wider phenomenon. In Cambodia, in the logging, mining, farming, construction, and energy sectors, the Chinese are filling their pockets. The six hydroelectric dams presently being built? All by Chinese companies. The mines in the north? Often run by Chinese groups. “I even saw Chinese soldiers guarding the entrance to a mine,” says a European man living in Phnom Penh. At the recently created Phnom Penh Stock Exchange, where only one – state-owned – company is listed, the Chinese presence is freely acknowledged. “In many sectors, Chinese investors are essential for us,” explains Charles Lu, deputy director of Phnom Penh Securities, adding that Chinese groups invested $9.1 billion in Cambodia between 1994 and 2012. …
