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Asean Affairs  14 December 2010

Power plays in the Greater Mekong Subregion

By  David Swartzentruber
AseanAffairs     14 December 2010

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About a year ago, Chinese Vice President Xi Jinping visited Cambodia to sign US$1.2 billion in economic deals with the Cambodian government of Prime Minister Hun Sen.

This year it is Hun Sen’s turn to visit Beijing, his third official visit to China since assuming office. Following the completion of an agreement for a “comprehensive strategic partnership,”officials of the two countries signed 13 deals on cooperation in areas such as energy, infrastructure, finance and consular affairs.

These diplomatic developments come on the heels of the arrival of major Chinese financial and business interests in Cambodia. The Bank of China, China’s second-largest in terms of lending, recently opened a branch in Cambodia and China’s largest bank, Industrial and Commercial Bank of China, also plans to establish a branch following a signing ceremony last week.

Prior to these financial developments, the Chinese electronics firm, Huawei, and the Bank of China provided loans to Cambodia’s leading mobile firm, Mobitel. The loans may provide Mobitel sufficient time to develop a future relationship with an appropriate international partner. Concurrent with these events, media report that Cambodia will host another round of United States-backed multinational military exercises in 2011 as part of a global initiative designed to boost countries’ peacekeeping capacity, officials from both the United States and Cambodia said.

The training exercise, called Angkor Sentinel 2011, is set for May 2011 and would be held at the Royal Cambodian Armed Forces’ Peacekeeping Training Centre in Kampong Speu province. A similar training exercise was held in 2010.

As pointed out in earlier Asean Analysis reports, the renewed interest in the Asean community by the U.S. administration suggest a Greater Mekong Subregion scenario in which China and the United States seek to maintain their spheres of influence by giving these Asean countries special attention.

However, it would appear that China has more financial clout in the region due to its rising economy and the current financial woes of the United States. China is hosting or proposing a number of infrastructure projects such as high-speed railways and roads. Asean countries, such as Cambodia, Laos, Thailand and Vietnam can benefit from the attention paid to them by each of these major global players and they are undoubtedly aware of that.

Paul A. Ebeling, Jnr

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