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This chapter first surveys the close historical ties between the governments of China and Cambodia, as well as between the Chinese Communist Party (CCP) and the Cambodian People’s Party (CPP). It then presents data on Cambodia’s dependence on Chinese “aid” and other forms of capital, including foreign direct investment (FDI). It argues that both the relatively high levels of Chinese funding as well as the “no strings attached” nature of that funding, which lacks the conditions for political and economic reforms often attached to foreign aid by other governments and multilateral institutions, provide additional leverage for China over Hun Sen’s government. The chapter shows how China uses this leverage both to help its state-owned enterprises (SOEs) overcome the high risk in Cambodia’s investment environment for their very specific (immobile) assets and to gain the support of the Cambodian government on issues vital to the legitimacy of the Chinese Communist Party, including its territorial claims in the South China Sea. The chapter specifically analyses cases of Chinese investments in Cambodian hydropower projects and shows how Chinese influence over the Cambodian government helps overcome domestic opposition to these projects and secures long-term guarantees for the profitability of investments in this sector.

This chapter presents a comparative study of politics and political institutions in Cambodia and the Philippines, which were long at the extremes within ASEAN regarding whether the members should work collectively to negotiate with China over competing South China Sea claims. Noting the similarities in informal political institutions in both states, including high levels of corruption and the dominance of family dynasties of both political economies, the chapter, nevertheless, emphasizes the differences in formal political institutions in the two countries, as well as the oligarchic political competition of elite families in the Philippines, termed “dynastic pluralism” compared to the dominance of Hun Sen’s family through intermarriage in Cambodia. While patron-clientelism is entrenched in both systems, the chapter argues, in the Philippines there are many more patrons. The chapter concludes by suggesting that Cambodia’s even more corrupt environment and less democratic institutions provide relatively wider avenues for Chinese influence over Cambodia’s government.

This chapter discusses the international dimensions of Vietnam’s occupation of Cambodia, especially the evolution of the Soviet policy toward the Indochina conflict in the course of the 1980s. Gorbachev was interested in ending the war because he resented the economic burden of occupation, passed through Vietnam onto the Soviet Union. But, despite the Chinese demands, he was careful not to pressure Hanoi because he valued Vietnam as a strategic Soviet outpost in Southeast Asia.