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China Forgives $4 Million in Khmer Rouge-era Debt

National People's Congress Chairman Wu Bangguo delivers a work report during a plenary session of the National People's Congress in Beijing, China.

China announced Thursday it would forgive Cambodia more than $4 million in debt owed by the government of the Khmer Rouge.

In an agreement signed between Prime Minister Hun Sen and China’s top legislator, Wu Bangguo, the two sides said Cambodia’s debt would be transferred into development projects, a government spokesman said.

The debt cancellations comes after the visit of US Secretary of State Hillary Clinton, who discussed the possibility of addressing more than $400 million owed by Cambodia to the US.

Thursday’s announcement signaled a second round by China, who in 2002 announced undisclosed debt cancellation estimated at the time to be between $60 million and $1 billion.

In 2005, the International Monetary Fund forgave $82 million in debt. Over the years, Russia, too, canceled $1.5 billion in Cambodian debt.

Hun Sen and other officials say they should not be held liable for the US loan, which was given to the beleaguered Lon Nol regime in the 1970s. That regime, which ousted then-prince Norodom Sihanouk in a coup, fell to the Khmer Rouge.