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China gifts Cambodian farmers financial aid

Beijing's multi-million dollar largesse was widely seen as a reward for Cambodian support of Chinese foreign policy

China gifts Cambodian farmers financial aid

A Cambodian police official stands guard as students hold portraits of China's President Xi Jinping and King Norodom Sihamoni during Xi's arrival at the Phnom Penh international airport on Oct. 13. (Photo by AFP)

Chinese leader Xi Jinping has lived-up to Cambodian expectations on his first visit here as president and promised US$342 million in financial aid after signing off on 31 agreements, which opened-up his country to further imports of agricultural products from Cambodia.

Importantly, Xi delivered substantial relief for this country's struggling two million rice farmers, doubling Cambodia's export quota to 200,000 tons a year and telling Prime Minister Hun Sen the locally grown crop was "very tasty."

Such a deal struck an immediate chord with growers who have had to live with a 25 percent fall in rice prices over the last three months — on top of last year's price slump — while fuel and fertilizers remain expensive.

"I want China to buy more rice from Cambodia so that the rice price will go up, otherwise it will keep going down," said Pov Dip, a 60-year-old farmer from Prey Veng province in the country's east.

His farm is currently flooded and workers are struggling to pump the water out to save what is left of an already rotting crop.

"We need markets to export our agricultural products to. China has a lot of people, so they should buy more from us, to help our farmers," Pov Dip said, adding it was Chinese irrigation systems which enabled him to boost his income by planting two crops a year instead of one.

"Of course we want more aid from China," he said.


Stagnating economy

The announcing of the agreements were made on a two-day visit by Xi amid fears of a stagnating economy, crushed by falling commodity prices and a lingering drought, which could cost Hun Sen dearly at upcoming elections.

The drought, late rains and floods — which upset planting — and limited investment in mills have exacerbated the plight of Cambodian farmers resulting in poor returns at the farm-gate. The government had hoped to export a million tons of rice in 2015 but managed just half of that.

The package included US$238 million in soft loans, US$89 million in debt write-offs and US$15 million in military aid which helped cement Cambodia's place as a key ally of China. This followed a US$600 million package in July.

Xi also promised 500 scholarships and said he would urge Chinese investors to fund a new airport in Siem Reap, home to the top tourist destination of Angkor Wat, and a high-speed train.

Beijing's largesse was widely seen as a reward for Cambodia and its unflinching support for Chinese foreign policy and its maritime claims in the South China Sea, which overlap international waters and islands held by Brunei, Malaysia, Indonesia, the Philippines and Vietnam.

The deal also ended speculation, at least for the time being, that Cambodia's close ties with China could be undermined by the Philippines after recently elected President Rodrigo Duterte signaled he would soften his country's attitude to Beijing's claims in the South China Sea.

Manila challenged Beijing's claims and in July won an international court ruling but Duterte's shift towards China meant Cambodia's status as Beijing's sole ally on the issue was in jeopardy.

That plus tight economic conditions in China had cast doubts over Beijing's readiness to continually help fund Cambodia which — with its southern coast line and proximity to China — is of strategic importance.

Beijing has spent US$10 billion on Cambodia since launching its Go Global policy in 2001.

That generosity was recognized by Hun Sen who pulled out all stops for Xi's visit, deploying 7,000 police and military personnel, more than was on offer during the ASEAN summits held here in 2012.

In a letter carried by the local press, ahead of his visit, Xi wrote about centuries of good ties between the two countries adding the traditional friendship between China and Cambodia would "bear more fruit, allowing us to forever be good neighbors and genuine trusted friends."

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