The Ironclad Embrace: Cambodia's Deepening Ties with China and the Road Ahead

The Ironclad Embrace: Cambodia's Deepening Ties with China and the Road Ahead

Executive Summary:

Cambodia's relationship with China has rapidly expanded, driven by substantial Chinese investment, robust political alignment, and growing military cooperation.³ This study provides a comprehensive analysis of these intertwined dimensions, exploring the benefits Cambodia derives, the risks it faces regarding sovereignty and dependency, and the broader strategic implications for its relationships with other powers, ASEAN, and regional stability.

Key Areas of Focus:

Economic Partnership Dimensions

• Chinese Investment Flows Across Sectors (Infrastructure, Real Estate, Manufacturing): China has become by far Cambodia's largest investor.⁴ In Q1 2025, Chinese investment accounted for over 56% of total registered capital, amounting to $2.5 billion across 172 projects.⁵ This investment is heavily concentrated in the industrial sector ($2.2 billion in Q1 2025), with significant presence in manufacturing, real estate, and vital infrastructure. Key investment hotspots include Kampong Speu, Svay Rieng, Koh Kong, and Phnom Penh.⁶ This influx is transforming Cambodia's economic landscape, particularly in urban areas like Phnom Penh and Sihanoukville, with the rise of high-rise buildings and industrial hubs.⁷

• Belt and Road Initiative (BRI) Projects and Their Impacts: Cambodia is a key partner in China's BRI.⁸ Flagship projects like the Phnom Penh-Sihanoukville Expressway (operational), Siem Reap Angkor International Airport (operational), and the Sihanoukville Special Economic Zone (SSEZ) have significantly improved connectivity and boosted economic activity.⁹ The SSEZ, by end of 2024, attracted 202 companies and created approximately 32,000 jobs, with trade value reaching $4.07 billion. The upcoming Techo International Airport, also Chinese-built, is expected to begin commercial operations in 2025. These projects aim to enhance logistics, reduce travel times, and attract more investment and tourism.

• Trade Relationship Evolution and Dependency Patterns: China is Cambodia's largest trading partner.¹⁰ In 2024, bilateral trade reached a record high of over $15 billion, an increase of 23.8% from 2023.¹¹ While Cambodia imports a vast array of goods from China (raw materials for manufacturing, consumer products, machinery), its exports to China, primarily agricultural products, furniture, and garments, are considerably smaller, creating a significant trade deficit.¹² This dynamic highlights Cambodia's increasing reliance on China for raw materials and manufactured goods, even as it seeks to diversify export markets.

• Development Assistance and Concessional Financing: China has provided substantial development assistance, including grants and concessional loans for infrastructure development.¹³ While official new loan signings from China were reported as zero in 2024, and in Q1 2025 Cambodia repaid $117 million in debt service to China (reducing outstanding bilateral debt to $3.98 billion), China remains Cambodia's largest creditor.¹⁴ However, there's a perceived shift from direct loans to investment-led growth. China has also provided significant grants for specific projects, such as the Council of Ministers building and road construction.¹⁵

Political and Diplomatic Alignment

• UN Voting Patterns and International Position Coordination: Cambodia consistently aligns with China on international forums, including the United Nations. This often involves supporting China's positions on sensitive issues, demonstrating a strong diplomatic partnership.

• Support for Chinese Positions on Taiwan, Hong Kong, Xinjiang: Cambodia has consistently adhered to the "One China" policy and publicly supported Chinese actions regarding Hong Kong, Xinjiang, and issues deemed internal affairs by Beijing.¹⁶ This unwavering support is a key indicator of their close political alignment.

• Diplomatic Protection and Political Backing: China provides significant diplomatic and political backing to Cambodia, particularly against Western criticisms regarding human rights and democratic backsliding.¹⁷ This support helps Cambodia to maintain its political stability and navigate international pressures.

• Elite-level Relationship Cultivation: The relationship is fostered through frequent high-level visits and strong personal ties between the leaders, particularly between the Hun family (Hun Sen and Hun Manet) and the Chinese leadership. President Xi Jinping's visit to Phnom Penh in April 2025 underscored this deepening bond.¹⁸ The "Diamond Hexagon Cooperation Framework" (launched 2023) and the "Cambodia-China Year of Tourism 2025" are manifestations of this strong diplomatic engagement.¹⁹

Security and Military Cooperation

• Military Aid and Equipment Provision: China is Cambodia's primary supplier of military aid and equipment.²⁰ This includes a range of hardware, reflecting a significant modernization effort of the Royal Cambodian Armed Forces (RCAF) with Chinese assistance.

• Training Programs and Capacity Building: Joint military exercises, such as the "Golden Dragon" drills, have become annual occurrences and are increasing in scale.²¹ In May 2025, these drills were the largest ever, involving nearly 900 Chinese and over 1,300 Cambodian military personnel, utilizing advanced Chinese equipment like warships, armored vehicles, and even robot battle dogs.²² These exercises aim to enhance interoperability and capacity building for the RCAF.

• Potential Base Facilities and Strategic Access: Concerns persist regarding China's alleged access to the Ream Naval Base.²³ While Cambodia maintains the base is for its own use and welcomes visits from other navies (e.g., USS Savannah in December 2024), reports from the Lowy Institute suggest China's financial support for the renovation has granted it preferential access. This raises strategic implications for the South China Sea and broader regional maritime security.

• Intelligence Sharing and Security Cooperation: The deep trust between the two countries likely extends to intelligence sharing and broader security cooperation, although specific details are rarely made public.²⁴ This aspect of the relationship contributes to Cambodia's internal security and aligns its strategic interests with China's.

Social and Cultural Influence

• Chinese Language Education and Cultural Programs: There's a growing emphasis on Chinese language education in Cambodia, driven by economic opportunities.²⁵ Confucius Institutes and other cultural exchange programs promote Chinese language and culture.²⁶

• Media Influence and Information Dissemination: Chinese state media outlets have a growing presence and influence in Cambodia, often shaping the narrative regarding bilateral relations and international affairs in a way that is favorable to Beijing.²⁷

• Chinese Diaspora Community Integration: The influx of Chinese investment and tourism has led to a significant increase in the Chinese expatriate community, particularly in cities like Sihanoukville. This has had profound social impacts, including the rise of Chinese-owned businesses and, at times, social tensions related to crime and online scam syndicates (a growing concern for both governments).

• Educational Exchanges and Scholarship Programs: China offers numerous scholarships for Cambodian students to study in China, fostering a generation of Cambodian elites with direct exposure to Chinese systems and culture, potentially influencing future policy.²⁸

Sovereignty and Dependency Concerns

• Debt Sustainability and Financial Dependency Risks: While Cambodia's total public debt of $12.18 billion (as of Q1 2025) is considered sustainable by the government (18.4% of GDP, far below the 40% threshold), China remains the largest creditor at nearly $4 billion. Concerns about "debt traps" persist, though Cambodia has recently refrained from taking new loans from China, focusing on fiscal resilience and investment-led growth.²⁹

• Political Autonomy and Decision-Making Independence: Critics argue that Cambodia's deep reliance on China compromises its political autonomy and ability to make independent foreign policy decisions, particularly within ASEAN. Cambodia's consistent alignment with Chinese positions, especially on issues like the South China Sea, is often cited as evidence.³⁰

• Asset Seizure Risks and Collateral Arrangements: While not explicitly reported for Cambodia, the general concerns surrounding some BRI projects involve the potential for strategic assets to be used as collateral or seized in case of debt default, raising long-term sovereignty risks.

• Environmental and Social Impact Assessments: The rapid pace of Chinese-funded development, especially in areas like Sihanoukville, has raised concerns about inadequate environmental and social impact assessments, leading to environmental degradation and displacement issues for local communities.³¹ The proposed Funan Techo Canal, while framed as an economic sovereignty project for Cambodia, has raised environmental concerns, particularly from Vietnam.³²

Strategic Implications:

• Impact on US-Cambodia Relations and Regional Balance: Cambodia's strong ties with China have strained its relationship with the United States and other Western powers.³³ The US has expressed concerns about the Ream Naval Base and Cambodia's democratic backsliding.³⁴ While Prime Minister Hun Manet has made efforts to recalibrate by engaging with Western capitals (e.g., high-level meetings with US Congress and Pentagon, USS Savannah port call in Sihanoukville), this is viewed as a diversification strategy rather than a shift away from China.³⁵ The deepening Cambodia-China relationship contributes to a perceived tilt in the regional balance of power towards Beijing.³⁶

• ASEAN Cohesion and Centrality Challenges: Cambodia's steadfast support for China's positions, particularly on the South China Sea where it has historically blocked consensus statements critical of China, has been a significant challenge to ASEAN's unity and its ability to act as a cohesive bloc. This impacts ASEAN's centrality in regional security architecture.

• Long-term Sustainability of the Relationship Model: The "ironclad embrace" model, while providing substantial economic benefits and political backing for Cambodia, faces questions about its long-term sustainability. Challenges include managing the trade imbalance, ensuring debt sustainability, addressing social and environmental impacts of rapid development, and navigating potential over-reliance on a single major power in a complex geopolitical environment. The recent efforts by Hun Manet to diversify partnerships suggest an awareness of these risks.³⁷