Cambodia's Balancing Act: Growth, Authoritarianism, and China's Shadow

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 Cambodia's Balancing Act: Growth, Authoritarianism, and China's Shadow

Over the past two decades, Cambodia has been one of Southeast Asia’s fastest-growing economies. Glittering high-rises in Phnom Penh, a booming construction sector, and a surge in garment exports tell a story of modernization. But beneath this economic transformation lies a more complex and fragile balancing act: sustaining growth while entrenching authoritarian rule and deepening dependence on China. Cambodia’s political and economic model—marked by centralized power, weak institutions, and strategic alignment with Beijing—raises critical questions about its long-term sustainability.

Economic Growth: Impressive but Uneven

From 1998 to 2019, Cambodia’s GDP grew at an average of 7% per year. Garment exports, tourism, construction, and agriculture fueled this expansion. Even after the COVID-19 pandemic, Cambodia showed signs of recovery, with 5.5% growth projected in 2024 and beyond. Foreign direct investment (FDI), especially from China, poured into special economic zones (SEZs), infrastructure, and energy projects.

Yet this growth has come with caveats:

  • Over-reliance on a few sectors, especially garments and construction, leaves the economy vulnerable to external shocks.

  • Wage growth has not always matched productivity gains, and the formal job market remains limited for young Cambodians entering the workforce.

  • Inequality—both geographic and socioeconomic—has widened, with rural areas often left behind.

  • Environmental degradation and land disputes, especially linked to large-scale developments, threaten long-term development and social stability.

Political Repression: A Tightening Grip

While Cambodia’s economy opened up, its political space narrowed. The Cambodian People’s Party (CPP), led for nearly four decades by Hun Sen and now succeeded by his son Hun Manet, has systematically dismantled opposition, silenced critics, and curtailed civil liberties.

  • The main opposition, the Cambodia National Rescue Party (CNRP), was dissolved by the Supreme Court in 2017.

  • Independent media outlets, such as Voice of Democracy (VOD), have been shuttered.

  • Civil society groups face restrictive laws, and activists are routinely harassed or jailed.

  • National elections—most recently in 2023—are widely seen as uncompetitive and lacking credibility.

This model of “authoritarian development” mirrors strategies seen in other parts of Asia. It allows for top-down governance and investor-friendly policies but at the cost of pluralism, checks and balances, and long-term institutional resilience.

The China Factor: Lifeline or Leash?

China’s role in Cambodia’s development cannot be overstated. It is Cambodia’s largest investor, donor, and trading partner. Chinese-funded projects include:

  • Infrastructure: Roads, bridges, power plants, and real estate developments.

  • Sihanoukville: Transformed into a hub for Chinese casinos and businesses, often with minimal integration into the local economy.

  • Ream Naval Base: Undergoing expansion with reported Chinese support, raising alarms among the U.S. and regional neighbors.

China has also provided political cover to the Cambodian government. When Western countries imposed sanctions or suspended trade preferences over human rights concerns, Beijing stepped in with new loans, grants, and public support.

However, this relationship comes with risks:

  • Debt dependency: Cambodia owes a significant portion of its external debt to China, raising fears of long-term leverage.

  • Sovereignty concerns: The growing Chinese presence—especially at strategic locations like Ream—has fueled public unease and geopolitical friction.

  • Economic overexposure: The influx of Chinese capital, especially in speculative real estate, has contributed to bubbles and distorted local markets.

Trade-Offs and Risks

Cambodia’s model—rapid economic growth under authoritarian rule backed by China—has worked in the short term. But serious structural challenges remain:

  1. Can growth continue without political reform? As the population becomes younger, more educated, and connected via social media, the demand for accountability may rise.

  2. Will international backlash intensify? The partial suspension of the EU’s Everything But Arms (EBA) trade scheme and growing Western scrutiny suggest that rights violations carry economic costs.

  3. How sustainable is Chinese support? A slowdown in China’s economy or a strategic recalibration could alter Beijing’s willingness to underwrite Cambodia’s development indefinitely.

  4. Is the social contract fraying? Economic promises alone may not satisfy a generation seeking dignity, justice, and voice.

A Fragile Balancing Act

The Hun Manet government inherits not just power but the pressures of this precarious equilibrium. To maintain stability, it must continue delivering growth—but also confront deeper questions of legitimacy and independence.

So far, gestures toward reform have been cautious and limited. Without significant institutional strengthening, diversification of foreign partnerships, and respect for civil liberties, Cambodia’s balancing act could prove unsustainable.

The shadow of China looms large. But so too does the unmet promise of a more inclusive, transparent, and self-reliant Cambodia.

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