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

Executive Summary

Cambodia presents one of the most striking examples of the "growth-authoritarianism paradox" in contemporary Southeast Asia. Despite maintaining economy is forecast to grow at 5.8% in 2024 and 6.0% in 2025, fueled by a further rebound in tourism and strong manufacturing prospects, the country has simultaneously experienced unprecedented democratic regression and authoritarian consolidation. This transformation occurs under the expanding shadow of Chinese economic and political influence, creating a complex triangular relationship between economic modernization, political repression, and geopolitical dependency.

Cambodia is effectively a single-party state with fixed and controlled elections, a lack of independent media, ruling party interference and control of all state institutions, political control of the judiciary, and systematic harassment and targeting of critics in the political opposition and civil society. Yet paradoxically, this authoritarian consolidation has coincided with sustained economic growth, Chinese-financed infrastructure development, and modernization initiatives that have transformed Cambodia's physical and economic landscape.

The analysis reveals that Cambodia's economic growth model is fundamentally dependent on Chinese capital flows, political alignment with Beijing's strategic objectives, and the systematic suppression of domestic opposition. This "authoritarian developmentalism" presents both opportunities and risks for Cambodia's long-term stability and sovereignty.

I. Economic Growth Paradox

Macroeconomic Performance and Structural Transformation

Cambodia's economic performance has remained remarkably resilient despite global uncertainties and domestic political tensions. Cambodia's economic growth is estimated to have reached 5.4 percent in 2023. This year's economic growth is projected to marginally improve to 5.8 percent, while GDP per Capita in Cambodia (with a population of 17,423,880 people) was $2,084 in 2023, an increase of $73 from $2,011 in 2022.

The economy has demonstrated structural diversification beyond traditional sectors. Garment and agricultural exports are strong, and tourism is recovering while real estate and construction are undergoing a correction. This sectoral rebalancing reflects both domestic policy priorities and shifting global supply chains that have benefited Cambodia's manufacturing sector.

However, this growth model faces significant sustainability challenges. The reliance on garment exports, while providing employment and foreign exchange, creates vulnerability to global trade fluctuations and labor cost competition from other regional economies. The tourism sector, while recovering post-pandemic, remains highly dependent on Chinese visitors and regional stability.

Manufacturing Sector Development

Cambodia's manufacturing sector, particularly textiles and garments, has served as the backbone of economic growth and employment generation. The sector benefits from preferential trade agreements with major markets, including the European Union's "Everything But Arms" initiative and the United States' Generalized System of Preferences (though the latter has faced periodic reviews due to governance concerns).

Chinese investment has played a crucial role in expanding Cambodia's manufacturing capacity beyond traditional textiles into electronics assembly, automotive parts, and light manufacturing. This diversification has been supported by Cambodia's membership in the ASEAN Economic Community and regional value chain integration.

The manufacturing sector's expansion has created employment opportunities for rural populations, contributing to poverty reduction and urbanization. However, labor rights concerns, including restrictions on union activities and workplace safety issues, have generated international criticism and threatened trade preferences.

Tourism Industry Resilience and Challenges

Cambodia's tourism industry has demonstrated remarkable resilience, recovering from the COVID-19 pandemic impacts more rapidly than many regional competitors. The sector benefits from Cambodia's rich cultural heritage, including the Angkor Archaeological Park, and growing adventure tourism and ecotourism segments.

Chinese tourists have historically comprised the largest segment of international visitors, creating both opportunities and vulnerabilities. The concentration of tourism revenue from Chinese sources reflects broader economic dependencies and exposes the sector to geopolitical tensions between China and Western countries.

Domestic tourism development has gained attention as a strategy for reducing external dependencies and creating more sustainable revenue streams. However, this requires continued infrastructure investment and service quality improvements that strain government resources and regulatory capacity.

Agricultural Modernization and Rural Development

Agriculture remains crucial for rural livelihoods and export earnings, though its relative contribution to GDP has declined as the economy has diversified. Rice cultivation continues to dominate agricultural production, with Cambodia emerging as a significant rice exporter to regional markets.

Chinese agricultural investments have focused on large-scale plantation development, particularly for rubber and palm oil, as well as aquaculture projects. These investments have created employment opportunities but also generated concerns about land use rights, environmental impacts, and food security.

The agricultural sector faces ongoing challenges including climate change impacts, limited access to credit and technology, and competition from more mechanized regional producers. Government initiatives to promote agricultural cooperatives and value-added processing have shown mixed results.

II. Authoritarian Consolidation Mechanisms

Opposition Party Dissolution and Electoral Manipulation

Cambodia's transition to complete authoritarian control has been marked by the systematic elimination of political opposition through legal and extra-legal means. The moderate suspense of the election — whether or not it would introduce a return to competitive authoritarianism — was broken when the Candlelight Party was disqualified from participating over a registration technicality in May.

This electoral manipulation represents the culmination of a broader strategy to eliminate meaningful political competition. The dissolution of the Cambodia National Rescue Party (CNRP) in 2017, followed by the harassment and exile of opposition leaders, created a political monopoly for the Cambodian People's Party (CPP).

The Candlelight Party, the only opposition party to control commune council positions, wasn't allowed to stand in the Senate elections, just as it wasn't at last year's general elections, over a trumped-up issue of paperwork. This pattern of using administrative and legal technicalities to exclude opposition participation has become a hallmark of Cambodia's authoritarian consolidation.

Civil Society Space Narrowing and NGO Restrictions

The space for civil society operations has contracted dramatically under increasingly restrictive legislation and administrative pressure. In the past two years, the Cambodian government has intensified its onslaught on political opposition, civil society, and the few remaining independent media outlets in the country.

New laws governing associations and NGOs have created extensive reporting requirements, restricted foreign funding, and expanded government oversight powers. Many international NGOs have been forced to cease operations or significantly reduce their activities due to regulatory constraints and security concerns.

Local civil society organizations face particular pressure, with leaders subject to harassment, arrest, and prosecution under broadly defined national security laws. The closure of independent research institutes, advocacy organizations, and community-based groups has eliminated crucial sources of independent information and policy analysis.

Media Control and Press Freedom Limitations

Cambodia's media landscape has been systematically transformed through ownership concentration, licensing restrictions, and legal intimidation. Independent media outlets have been forced to close or have been acquired by government-aligned business interests, creating an increasingly homogeneous information environment.

Journalists and media workers face regular harassment, legal threats, and physical intimidation for reporting on sensitive topics including corruption, human rights violations, and environmental issues. Self-censorship has become pervasive as media professionals seek to avoid government retaliation.

The expansion of digital media and social media platforms has created new challenges for information control, leading to increased government efforts to regulate online content and monitor digital communications. The proposed cybercrime law threatens to further restrict online expression and expand surveillance capabilities.

Judicial System Politicization and Legal Weaponization

Cambodia is an authoritarian state, as power is centralized in the hands of the Cambodian People's Party (CPP) under leader Hun Manet. Civil society groups, independent media and opposition parties are repressed, and elections are not free and fair. The judicial system has been transformed into an instrument of political control rather than an independent arbiter of legal disputes.

High-profile political prosecutions have followed predictable patterns, with charges brought against opposition figures, civil society leaders, and journalists who challenge government policies or expose corruption. These cases typically result in convictions that align with political objectives rather than legal evidence.

The courts' lack of independence has broader implications for economic development and governance quality. Foreign investors and international partners increasingly view Cambodia's legal system as unreliable for contract enforcement and dispute resolution, potentially undermining long-term economic competitiveness.

III. Chinese Influence Dimensions

Quantitative Analysis of Chinese Investment Flows

China has emerged as Cambodia's dominant economic partner, with investment flows spanning multiple sectors and development priorities. China is a major donor, with spent and planned disbursements of ODA totalling US$1,750 million in 2019-2024, while other donors such as Japan (US$1,693 million) and South Korea (US$790 million) trail significantly behind.

Between 2000 and 2021, China provided $17.7 billion to Cambodia through loans, grants, and donations of various kinds. This massive capital flow has financed major infrastructure projects, supported government operations, and created extensive economic dependencies.

Chinese investments have concentrated in infrastructure development, real estate, manufacturing, and natural resource extraction. The scale and scope of Chinese economic engagement far exceeds that of any other bilateral partner, creating asymmetric dependencies that influence Cambodia's policy choices and international alignment.

Belt and Road Initiative Projects and Impacts

In 2017, China financed approximately 70% of Cambodia's road and bridge development. China built a major expressway between Sihanoukville and Phnom Penh, which began operating in 2023. As of at least 2024, the expressway is the largest BRI project in Cambodia.

The China-proposed Belt and Road Initiative (BRI) has greatly contributed to transforming infrastructure, as well as the economic and trade landscapes in Cambodia over the last decade. Major projects include port development in Sihanoukville, airport expansion, hydroelectric dams, and telecommunications infrastructure.

China's investments in Cambodia have catalyzed a remarkable transformation of its infrastructure. New highways, railways, seaports and airports have been built or old ones upgraded, facilitating efficient transportation of goods and movement of people within and beyond Cambodia's borders.

However, these infrastructure investments have generated concerns about debt sustainability, environmental impacts, and social displacement. The concentration of Chinese workers and contractors in major projects has limited local employment benefits and technology transfer.

Political Influence and Diplomatic Alignment

China's economic investment has been accompanied by unprecedented political influence over Cambodia's domestic and international policies. Cambodia consistently supports Chinese positions in international forums, including ASEAN, the United Nations, and multilateral organizations.

This diplomatic alignment has included support for Chinese policies on Taiwan, Hong Kong, Xinjiang, and South China Sea territorial disputes. Cambodia's positions often conflict with those of other ASEAN member states, creating tensions within regional organizations and limiting multilateral cooperation.

The Cambodian and Chinese top leaders have agreed to define 2024 as the year of people-to-people exchange to promote tourism and connectivity between the two countries. This political relationship extends beyond government-to-government ties to include party-to-party cooperation, military exchanges, and cultural programs.

Military Cooperation and Security Partnerships

Chinese military assistance and cooperation have expanded significantly, including equipment provision, training programs, and infrastructure development at Cambodian military facilities. The Ream Naval Base development has generated particular international attention due to its potential strategic implications.

Security cooperation includes intelligence sharing, joint exercises, and capacity building programs that have enhanced the Cambodian military's capabilities while deepening institutional ties with Chinese security forces. This cooperation has implications for regional security balance and Cambodia's relationships with other security partners.

The military dimension of China-Cambodia cooperation has generated concerns among ASEAN partners and the United States about potential Chinese military presence in Cambodia and its implications for regional stability and balance of power.

IV. Social and Political Implications

Civil Liberties and Human Rights Impact Assessment

The intersection of economic growth and authoritarian consolidation has produced complex impacts on civil liberties and human rights in Cambodia. The 2024 Democracy Index ranking and recent crackdowns on independent media confirm that Cambodia's authoritarian regime is not simply consolidating power—it is actively dismantling the final spaces for democratic participation and civic expression.

Economic growth has improved living standards for many Cambodians, providing access to education, healthcare, and consumer goods that were previously unavailable. However, these material improvements have been accompanied by restrictions on political expression, association, and assembly that limit citizens' ability to participate in governance.

The government's approach to development has prioritized economic growth over civil liberties, creating a trade-off that has been accepted by some citizens in exchange for improved living conditions. However, this social contract faces increasing strain as inequality grows and corruption remains pervasive.

Public Opinion and Political Legitimacy

The CPP's political legitimacy rests on its ability to deliver economic growth and stability while maintaining control over information and political discourse. Public opinion research in Cambodia faces significant constraints due to restrictions on polling and survey research, making accurate assessment of popular attitudes challenging.

Available evidence suggests that government support remains substantial in rural areas where economic improvements are most visible and where access to independent information is limited. Urban areas, particularly among educated populations, show greater skepticism toward government policies and greater awareness of political restrictions.

The generational divide in political attitudes appears significant, with younger Cambodians expressing greater interest in political participation and civil liberties. However, limited channels for political expression and economic dependencies have constrained oppositional mobilization.

Elite Capture and Corruption Dynamics

Cambodia's economic growth has been accompanied by extensive elite capture and corruption that have concentrated benefits among political and business elites connected to the CPP. Major economic opportunities, including Chinese investment projects, have been controlled by networks of well-connected individuals.

A 2024 study found that funds stolen by criminal syndicates in Cambodia was estimated to exceed $12.5 billion annually—half of the country's GDP, illustrating the massive scale of corruption and illicit financial flows. This includes human trafficking, online scamming operations, and money laundering activities that have flourished under weak regulatory oversight.

The corruption dynamics have implications for economic development sustainability and social stability. While some corruption proceeds are reinvested in the domestic economy, the overall impact distorts market mechanisms and reduces economic efficiency.

Social Mobility and Inequality Trends

Economic growth has created new opportunities for social mobility, particularly for individuals able to access education and employment in growing sectors like manufacturing and services. The expansion of higher education and vocational training has increased human capital development.

However, inequality has also increased as economic benefits have been concentrated among urban populations and individuals with political connections. Rural-urban disparities remain significant, despite infrastructure improvements and agricultural modernization efforts.

Access to quality education, healthcare, and economic opportunities continues to depend significantly on family resources and political connections, limiting meritocratic advancement and maintaining social stratification patterns.

V. Critical Analysis: Sustainability and Implications

The Growth-for-Rights Trade-off

Cambodia's experience illustrates both the potential and limitations of the "growth-for-rights" bargain that characterizes many authoritarian development models. Economic growth has provided material benefits that have enhanced living standards and created new opportunities for many Cambodians.

However, this model faces inherent sustainability challenges. The suppression of political competition and civil society limits the government's ability to receive feedback, correct policy errors, and adapt to changing circumstances. The lack of independent media and research institutions reduces the quality of policy information and analysis.

The concentration of economic benefits among political elites and connected business interests creates inequality and social tensions that may undermine long-term stability. The absence of institutional mechanisms for peaceful political competition increases the risks of instability and conflict.

Chinese Dependency and Sovereignty Concerns

Cambodia's deepening dependence on Chinese investment and political support creates significant sovereignty risks and limits policy autonomy. The massive scale of Chinese economic engagement has created debt burdens and asset dependencies that constrain Cambodia's policy choices.

The political alignment with Chinese strategic objectives has isolated Cambodia from some traditional partners and created tensions within ASEAN. This diplomatic isolation reduces Cambodia's ability to diversify its international relationships and may limit access to alternative sources of investment and support.

The concentration of key infrastructure assets under Chinese control or influence creates vulnerabilities that could be exploited in future conflicts or disagreements. The lack of transparency in Chinese investment agreements limits public oversight and accountability.

Regional and International Responses

Cambodia's trajectory has generated increasing concern among regional and international partners about democratic regression and human rights violations. The European Union has initiated procedures to partially suspend trade preferences due to governance concerns, while the United States has imposed targeted sanctions on individuals associated with corruption and human rights abuses.

ASEAN's response has been constrained by the organization's non-interference principles, though individual member states have expressed private concerns about Cambodia's direction. The regional response has been limited by competing priorities and the desire to maintain organizational unity.

International isolation risks undermining Cambodia's economic development model by limiting access to markets, investment, and technical assistance from democratic partners. However, Chinese support has provided alternative options that have reduced the immediate costs of international pressure.

Future Scenarios and Policy Implications

Cambodia's future trajectory will likely depend on the sustainability of its current growth model and the effectiveness of its authoritarian institutions in managing emerging challenges. Several scenarios are possible:

Continued Authoritarian Stability: If economic growth continues and Chinese support remains strong, Cambodia may maintain its current trajectory with gradual institutional development within authoritarian parameters.

Economic Crisis and Political Instability: Economic shocks, debt crises, or reduction in Chinese support could create instability that challenges the current political arrangement and potentially opens space for political change.

Gradual Liberalization: Generational change, civil society pressure, and international engagement might create incentives for gradual political opening, though this appears unlikely in the near term.

Increased Isolation and Stagnation: Continued international pressure and regional isolation could lead to economic stagnation and increased dependence on Chinese support, potentially reducing Cambodia's development prospects.

VI. Conclusions and Strategic Implications

The Cambodian Model's Broader Significance

Cambodia's experience provides important insights into the relationship between economic development and political governance in contemporary Southeast Asia. The country's ability to maintain economic growth while consolidating authoritarian control challenges assumptions about the relationship between development and democratization.

The role of Chinese investment and political support in enabling this model has implications for other countries in the region and beyond. Cambodia's experience demonstrates how authoritarian governments can use external support to resist domestic and international pressure for political reform.

However, Cambodia's trajectory also illustrates the limitations and risks of this approach. The concentration of power, suppression of opposition, and dependence on external support create vulnerabilities that may undermine long-term stability and development.

Policy Recommendations for Stakeholders

For International Partners:

• Maintain principled engagement while avoiding legitimization of authoritarian practices
• Support civil society and independent media through targeted assistance programs
• Coordinate multilateral pressure on governance and human rights issues
• Provide alternative sources of investment and support to reduce Chinese dependency

For ASEAN:

• Develop stronger mechanisms for addressing governance concerns within the organization
• Enhance support for civil society and media freedom throughout the region
• Strengthen regional institutions to resist external pressure and maintain autonomy
• Promote dialogue on development models and governance standards

For Cambodia's Development:

• Address fundamental governance and corruption issues as prerequisites for sustainable development
• Strengthen institutional capacity and transparency in public administration
• Create space for political competition and civil society participation
• Diversify economic relationships to reduce external dependencies

Long-term Implications for Regional Order

Cambodia's trajectory has significant implications for the broader regional order in Southeast Asia. The success of authoritarian consolidation alongside economic growth may encourage similar approaches in other countries facing governance challenges.

The deepening of Chinese influence in Cambodia affects regional balance and ASEAN cohesion. Other member states must consider how to respond to Cambodia's alignment with Chinese strategic objectives while maintaining organizational unity.

The international response to Cambodia's trajectory will influence the broader global debate about development models and the relationship between economic growth and political governance. Cambodia's experience will likely be studied and potentially emulated by other authoritarian governments seeking to maintain power while promoting economic development.

The ultimate sustainability of Cambodia's balancing act between growth, authoritarianism, and Chinese influence remains uncertain. The country's experience provides valuable lessons about the complexities of development and governance in the contemporary international system, but also highlights the risks and limitations of authoritarian development models in an interconnected world.