First off, a word of welcome - I'd like to introduce a regular feature of the "MEcon@Mekong" blog: our regular "China Update." As regular followers of the Cambodian economy know, China remains the largest foreign investor and the largest provider of development assistance in Cambodia - although the actual numbers remain murky (more on that in a bit). As a putonghua speaker, I can quite comfortably live, work, eat, and relax in Phnom Penh without every having to speak a word of Khmer or English or French; although knowing the Hokkien, Guangdong, and Chaozhou dialects would certainly be useful at times.
The local Chinese language press is flourishing - publishing in both traditional and simplified characters catering both for the "老金边人" ("Old Phnom Penh people," to coin a term) - the city's well established, economically powerful Sino-Khmer population as well as for the new arrivals. And every day a new shop, restaurant, or other small business run by new immigrants from the People's Republic seems to open. Indeed street 136 betwen Psar Thmei and Monivong has the aesthetic and feel of "Anytown, PRC" - with the requisite grocery stores, jade shops, and the best Sichuanese food in town. Mandarin language elementary, middle, and high schools continue to grow - having quietly took off while the English and French speaking communities fought their own, misguided intra-Western battles as to which of their languages would eventually dominate (both lost).
Official visits are no longer limited to the usual folks from the central ministries and the big state owned enterprises in Beijing and Shanghai. Rather, every week we see trade and business delegations from the provincial and even prefectural levels eager to explore new opportunities in China's closest regional ally and most reliable ASEAN vote. The Sino-Cambodian chamber of commerce is a hive of activity and having been in and out of Cambodia since 2000, it's been impressive to observe the rebirth of Daoist and Chinese Mahayana Buddhist temples around the city.
Yet, important questions remain: What is the full extent of Chinese assistance and investment? Beyond the "glamour projects" - the government buildings, etc - how deep is China's aid foot print? How is China altering the dynamics of aid provision in Cambodia? Robert Bates, in his seminal works on Africa during the Cold War, pointed out the challenges of African states playing the US off the Soviet Union in aid negotiations - leading to increase in corruption and programs that were either useless or deleterious to the sustainable development of the region. Is this the pattern that we are observing in Cambodia? Or is the situation much more positive, Deborah Brautigam's brilliant analysis of China in contemporary Africa has depicted the net positives of China's engagement with the region. Is this the outcome that we are likely to observe?
Either way, the sheer scale of Chinese activity in Cambodia makes the country something of a "canary in the coal mine" for understanding the impacts of China's regional and global expansion. As Beijing's "一带一路" (one belt, one road initiative) continues it seemingly relentless march through the region, how will this impact regional economic integration in the Greater Mekong area?
There's significant disagreement in the literature as to the direction the Chinese economy will take in the medium term, but one thing is clear: a continued, downward trend in annual growth (the Chinese Academy of Social Sciences has provided relatively solid numbers on that trend in recent years). As China struggles to avoid the inevitable "middle income trap" slump that has bedeviled country after country, will it be the case of "When China sneezes, Cambodia catches a cold?"
Beijing's recent introduction of capital controls appear to have had a deleterious impact according to the most recent estimates of inward investment. Is this likely to continue? Will the anti-corruption campaign strike hard at Chinese tourism and the local gaming industry? At the same time, what guarantees does China have that its significant investment in the region will pay off over the medium to long term? A rising China has already set off a series of balancing actions (see: Vietnam and Japan) across the region and China has a long history of playing "dollar diplomacy" (generally successful, but with the occasional misstep) with its traditional neighborhood, "renegade province," Taiwan.
Over the next few months we will be exploring these issues - and more. From regular interviews with Chinese migrants to the region, to updates as to Beijing's latest aid offers, to reliable data on Chinese aid/investment, to exploring Phnom Penh's quiet but significant Taiwanese community. So, please stay tuned.