This is from a few months ago, but still interesting.  A Chinese developer, Tianjin Union Development Group, has purchased a huge swath of Cambodian rainforest “half the size of Singapore” and is tearing it all down to build a massive casino and resort.  The development also has its own golf courses, cruise terminal and international airport, with direct flights to China.  At a cost of $3.8 billion, this amounts to 1/3 of the yearly GDP of Cambodia.

Obviously there’s a lot of NGO uproar about the destruction of pristine rainforest in what was previously a national park, and that’s certainly concerning.  I think what’s even more concerning is the issue of colonization being exercised here by the Chinese developer.

Not only is the developer evicting Cambodians from their land (a common Chinese practice), but they are using their own Chinese workers on the development, protected by Cambodian troops.  Most strikingly, the Reuters reporter investigating this development was told by guards “This is China,” and firmly refused entrance to the construction site.  Local farmers were also told the land was Chinese and not allowed to use surrounding areas for logging, farming, or fishing.  A 10-foot deep moat was constructed delineating the “Chinese” land from the Cambodian land.

This whole scenario is significant for a number of reasons.  First, there’s a clear sense of de facto Chinese colonization in Southeast Asia.  As some of the villagers in the article suggest, the land is China’s forever.  This shows how short sighted the Cambodian government’s views are, since a one-off payment of 1/3 annual GDP has given the Chinese a permanent land concession would could arguably raise many times that amount over decades of development.  On the other hand, it could also indicate Chinese leverage over Cambodia, and a sort of “we’re taking this land whether you like it or not” mentality.  It’s difficult to say at this point.

It’s also interesting because extraterritoriality is exactly the same sort of thing that led to the Boxer Revolution in the waning days of the Qing Dynasty.  Chinese resented  British rule over Hong Kong and foreign concessions in Shanghai and other trade ports, yet the same behavior is coming to pass in Cambodia, on an enormous scale.  Of course there are many occasions where the Western nations have been hopelessly hypocritical, but here is a case of China doing the same as those they demonize.  Gambling is also illegal in China, which is now something being imposed on Cambodians.  Not quite as severe as the British forcing opium on China in the 1800s, but still another example of making something illegal at home, but legal among colonial populations elsewhere.

Lastly, this development is significant because it represents the archetypal Chinese method of doling out aid money.  During the Cold War, the US and the Soviet Union passed money out to allies or would-be allies to keep them within their respective ideological camps.  After the Cold War, Western nations gave aid money but it was often contingent upon human rights conditions.  Cambodia was once a recipient of these types of funds, but has since been replaced by the Chinese.

The Chinese aid model is quite different.  Usually it comes in the form of very cheap loans rather than outright aid, and the loans always come from one of the large State owned banks (i.e., deposits of Chinese savers).  Loans are then used to fund construction projects managed by Chinese contractors, using materials made in China, and assembled with imported Chinese labor.  As you might guess, it’s not really done out of altruism; this helps China greatly by expanding the expertise of their contracting companies and labor force, while preventing would-be competitor nations from learning the skills necessary to build infrastructure on their own.  Lots of sweetener deals are signed between Chinese contractors and government officials in these states, which is often just outright bribery.  This has been used time and time again across Southeast Asia and Africa, and the projects are often of very dubious usefulness to any of the common people in these nations.  How many Cambodians are going to be golfing or lounging at 5 star casino resorts?

The Cambodian Casino case also adds de facto colonization into the mix.  Perhaps the Chinese decide to turn the casino into an air force base in 10 years.  Is there anything Cambodia could do to stop them?  Who knows?  The US has paid to have its bases on foreign soil, but has also agreed to pack up and leave if the host country says it must do so.  Since the Chinese situation involves a 99 year lease on what’s ostensibly a casino, would Cambodia also have that right?

Clearly I think the Cambodians are selling themselves short on this agreement. On the other hand, it’s easy to see why Cambodian leaders would accept this.  Cambodia is very poor, and foreign aid donors have all these strings attached that may threaten the rule of the leading politicos.  Western donors are not in a position to take a piece of land in exchange for funds and overlooking human rights abuses, but the Chinese are.  It could also be many years before Cambodia has the expertise to develop that part of the country, so currently it’s just economic dead weight.  In the long term it might prove to be a foolhardy decision, but a bird in the hand is worth two in the bush, right?

The real hapless bunch here are the Chinese taxpayers and depositors, who – far from being rich themselves – are now subsidizing cheap loans to Cambodian and African development projects.  I suggest some of those officials doling out development loans abroad go visit some parts of rural Yunnan first.

Laos and Burma recently threw off Chinese development projects like this, so it will be very interesting to see how Cambodia manages this new relationship with Chinese aid money.

Reuters article: http://www.reuters.com/article/2012/03/07/us-cambodia-forests-idUSTRE82607N20120307

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