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US, China Face Off Online Over Trade Deficit in Cambodia

The United States and China flags.
The United States and China flags.

Recently, the US embassy posted a comment on its Facebook about a trade deficit between China and Cambodia, which angered Chinese embassy officials in Phnom Penh.

The United States and China are sparring on Facebook over comments made about the Cambodian comments made by the US Embassy about the country’s trade deficit.

On Friday last week, the US embassy posted a comment on its Facebook about a trade deficit between China and Cambodia, which angered Chinese embassy officials in Phnom Penh.

In the post, the embassy wrote: “China is Cambodia’s largest trade partner, but this relationship is heavily skewed in China’s favor. About 87% of trade are Chinese imports, which do not support jobs or industry in the same way Cambodia’s trade relationship with the United States or EU does.”

“This is just one more way Cambodia has shifted from a more balanced and diverse economic approach to one more dependent on China,” it adds.

In response, the following day the Chinese Embassy posted a statement on its Facebook page, saying that “Cambodian friends beware! The US is trying to stir things up again with the so-called trade deficit issue.”

“It is common sense that in a globalized world, the trade goes far beyond bilateral,” said the post, explaining that Cambodia imports large amounts of raw materials for textiles and machinery from China for the garment industry, while it exports final products all over the world, including to the US and EU.

“Besides, the state-to-state relationship is not just about trade. It is worth noting that China has built 31 highways and 8 bridges for Cambodia with the total length of highways up to more than 3000 km,” it added.

“What has the US done in this area? China helped to build all the hydropower stations in Cambodia (with 80% of Cambodia’s installed electricity production capacity). How about the US?”

The US embassy in Phnom Penh declined to comment further.

Khieu Kanharith, minister of information, also responded on Facebook, saying the US comments were “fake news”.

“We want to build good ties with all countries, especially with the US, but some people are trying to completely burn this relation due to their ill intention,” he said.

The spat is the second such online face-off between China and the United States in recent months. In January, the US posted a statement about Cambodia’s legacy, saying that the brutal Khmer Rouge, which claimed around 1.7 million lives “depended on a superpower,” an apparent reference to China. In response, the Chinese Embassy posted a statement on its Facebook page mocking the idea that the coup that preceded the Khmer Rouge takeover “was not related to the U.S., but the CIA.”

The recent US post came after remarks by Chargé d’Affaires Michael Newbill on U.S.-China trade dynamics on April 4.

Newbill said there are concerns in Washington over Cambodia as “China is now the dominant player in all the major elements of Cambodia’s economic growth.”

“First, if China’s economy slows, so will Cambodia’s. That’s a fact. The economies are tethered. Second, with dependence comes vulnerability. China has shown in other contexts it will use its economic might to compel countries to concede diplomatically or politically on issues that are important to China,” he said.

“Moreover, with its state-run companies taking on a bigger role in the economy, you can’t distinguish between the private sector and the government. Third, there are many, very visible negative externalities that come with significant Chinese investments, namely the lack of transparency or accountability, the rise of corruption, and the export of Chinese vice. Fourth, Chinese investment is invariably oriented towards the Chinese government’s interest,” he added.

Paul Chambers, lecturer and special advisor on international affairs at Naresuan University, Phitsanulok said: “These dueling statements by China and the US show that Cambodia increasingly fits into a geopolitical struggle between the two superpowers.”

“On both sides, propaganda is being utilized to win the hearts and minds of the Khmer people,” he said in an email.

Sophal Ear, associate professor of diplomacy and world affairs at Occidental College at Los Angeles, said what the US pointed out “is something that is conveniently swept under the rug by Phnom Penh when talking about expanding trade volume with China or China becoming Cambodia's number 1 trade partner.”

“If trade with the US and EU were to collapse, Cambodia would lose a lot of jobs. Those same Chinese imports are the raw materials used to export to the US and EU, so it works currently but only if those exports to the EU and US continue. If they stop, it’s like falling dominoes. It’s a house of cards that will collapse,” he added.

Chheang Vannarith, president of the Asian Vision Institute (AVI), a think tank based in Phnom Penh, said the US-China rivalry is going to be “more intense and unpredictable, in all fields, from economy to military and technology.”

“Small states in Southeast Asia are most vulnerable to major power competition. Cambodia potentially openly becomes the proxy conflict between the two powers. The geopolitical risk that Cambodia is facing is rising,” he said in an email.