Cambodia-US relations have warmed in recent years, and it has proven a willing ally in the US campaign against terrorism.
Prime Minister Hun Sen has condemned an EU parliamentary resolution over criminal cases against opposition leader Sam Rainsy.
The ongoing dispute has led to a number of violent protests.
Residents refuse to take a buyout from the company that they say is too low.
Both parties suffered major defeats in the 2008 national election, each earning only two National Assembly seats.
The two excavators arrived at around 10 am and began pulling the houses apart, as the families shouted for them to stop.
Cambodia saw two senior-level visits from both countries week, including a stopover Monday by US Secretary of State Hillary Clinton.
In 2010, China has invested $610 million.
In 2002, China announced an undisclosed debt cancellation estimated at the time to be between $60 million and $1 billion.
Last week, the leader of a demonstration for housing rights was severely beaten by police, as UN Secretary-General Ban Ki-moon toured.
Cambodia, one of the poorest nations in the world, typically needed aid from both sides to supplement its annual budget and to develop.