[Kabar-indonesia] AT: China's Growing Influence in Cambodia [+Abe's Ambiguity]

[JoyoNews at aol.com]

also: Japanese PM's ambiguity pays off -- for now;
and Asia Times: Abe Tackles the High Hurdles

Asia Times
Friday, October 6, 2006

China's Growing Influence in Cambodia

by David Fullbrook 

PHNOM PENH - The Cambodian capital is becoming China's Casablanca. While 
China's giant state corporations have recently dropped billions of dollars in 
oilfields and mines across Africa and South America, low-profile, family-run 
Chinese firms have come to dominate approved investment in Cambodia. 

China topped Cambodia's investment charts in 2005 with projects worth US$448 
million and is on pace to repeat that feat this year with Sino-Hydropower 
Corp's 
$280 million 193-megawatt Kamchay hydropower station, the largest foreign 
investment in Cambodian history. 

In 2004, the Cambodian Investment Board, which doles out tax holidays and 
other privileges for foreign investments, approved for the first time more 
investment from China than any other country. That year Chinese investors accounted 
for $89 million of the total $217 million approved, while Malaysians ran a 
distant second at $23 million. In 2003, approvals for Chinese-invested projects 
had just started to flow in at $45 million. 

Cambodian Investment Board data show that 9.18% of total approved investment 
from August 1994 to June 2006 originated from China, accounting for 243 
different projects with a fixed-asset value of $925 million over a diverse 
cross-section of industries, including agriculture, mining, oil refining, metals 
production, vehicle manufacturing, garments, hotels and tourism. Only Malaysia and 
South Korea made deeper inroads into the country over that period. 

Yet those investments represent only what is counted on the official ledger; 
how many actual Chinese-invested projects materialized over that period is 
unknown, as local observers contend that many enter the country unbeknownst to 
Cambodia's underfunded, overstretched bureaucracy. Projects not qualifying for 
investment privileges are not registered with the Investment Board, which has 
less influence over Cambodia's underdeveloped rural provinces. 

Provincial governors also have a free hand to approve investments worth less 
than $2 million, though they are believed to under-report the value of 
investments in their regions to get a cut on the deal. No currency controls and 
failure to collect more than $1 of every $4 of tax due are a lure for many 
smaller-scale Chinese investors, who see opportunity in the rural deprivation that 
scares away most Western and more developed Asian investors. 

"Because the economy in Cambodia only started to develop 10 or 15 years 
before, the range for things for Chinese investors to look into is quite wide," 
said Jimmy Guo, president of the Chinese Chamber of Commerce in Phnom Penh. "We 
look back to our experience in recovering from poverty. More and more people 
know Cambodia. We are finding investment in Cambodia is an attractive topic 
because the political situation here is quite stable now." 

Guo, whose personal primary interests in Cambodia are travel and hotels, says 
Chinese government support, including the so-called "Go Out" policy, has 
helped larger Chinese firms to access government-backed soft loans and export 
credits to start up ventures in Cambodia. 

That's evident in the brisk Cambodian trade of Chinese manufactured goods. In 
2003, 11.3% of the country's imports originated from China, which in turn 
bought just 1.1% of Cambodia's meager merchandise exports, according to 
International Monetary Fund statistics. By 2004, 16.5% of Cambodia's imports valued at 
$527 million came from China - a statistic that excludes the 19.9% of total 
imports that came from Hong Kong worth $615 million. 

Garment production has long been the backbone of Cambodia's export sector, 
which is heavily invested in by Chinese producers. Now, as global commodity 
prices spike, Chinese investors are starting to pour more money into Cambodia's 
underdeveloped natural resources, including pulp, palm oil, rubber, and oil and 
gas. 

For instance, China Cooperative State Farm Group invested $70 million in 2001 
via a soft loan from China's Export-import Bank with Cambodian pulp-and-paper 
producer Pheapimex to establish pulp plantations in Kompong Chhnang and 
Pursat provinces. Green Rich, another Chinese firm, allegedly cleared national-park 
forest lands in Koh Kong province to establish acacia plantations in 2004. 

More significant, China National Overseas Oil Corp (CNOOC) this July met with 
Sok An, a cabinet minister close to Prime Minister Hun Sen, and Cambodia's 
National Petroleum Authority to discuss possible joint exploration and 
production. Cambodia's hydrocarbon reserves are rumored to be more promising than 
previously thought, and no doubt look more viable with global oil prices hovering 
over $60 per barrel. America's Chevron and Thailand's PTT Exploration and 
Production are already exploring Cambodia's seabed for natural gas in a joint 
arrangement. 

Following the Money

Accompanying the flood of Chinese trade and investment is a deluge of Chinese 
migrants, especially from Guangdong and Fujian provinces. Observers estimate 
the number of recent Chinese migrants to Cambodia to be anywhere from 50,000 
to 300,000 - exact figures, they say, are impossible to get because of the 
inaccessibility of Cambodia's many remote provincial areas. With the recent 
development of roads linking the two countries through Laos, speedy bus trips 
between Yunnan and Cambodia open the way for Chinese laborers and hawkers to move 
south. 

Chinese investors and migrants alike have safe passage from the silky 
political ties Beijing has recently cultivated with Phnom Penh. China over the years 
has backed Cambodia's king, the Maoist Khmer Rouge, and now strongman Hun Sen, 
who was a junior Khmer Rouge cadre before becoming a Vietnamese puppet. 
Nowadays he dances more to his own beat thanks to China's economic and political 
support. 

With closer economic relations, political ties are strengthening. Chinese 
Premier Wen Jiabao visited Cambodia this April, the most senior Chinese visitor 
since then-president Jiang Zemin made the trip in November 2000. Ministers and 
delegations from Beijing and the provinces regularly visit Phnom Penh for 
business-related meetings. 

Cambodia is strategically vital to China because it overlooks crucial sea 
lanes and could conceivably share a maritime border if China's military 
eventually enforces Beijing's claims to disputed, energy-rich atolls in the South China 
Sea. Beijing currently gives more civil aid to Cambodia, more than $2 billion 
since the 1970s, than any other country, according to Sophie Richardson, 
author of a recent doctoral thesis on China's relations with Cambodia at the 
University of Virginia. 

That long-standing arrangement pays Chinese firms to provide roads, bridges, 
weapons, patrol boats and offices, including the $12.4 million loan it 
extended the government in July for construction of Cambodia's new $49 million 
Council of Ministers building. Since April, Hun Sen has been favorably comparing a 
no-strings Chinese aid package worth $600 million with the $601 million of 
conditional aid Cambodia receives from the Western-led Consultative Group (CG). 
Chinese aid is less impressive than it seems on the surface, however, as its 
spread across three or four years while the CG's budget is disbursed annually. 

All this money and migration raise nationalistic suspicions in some quarters. 
"China's grant is to pressure the [Cambodian] government to follow [China's] 
ideology," said Eng Chhay, an member of parliament in the opposition Sam 
Rainsy Party, as reported in the Cambodia Daily in July. 

Critics complain that the warm relations give Beijing a free hand in 
Cambodia. For instance, Chinese police have been able to lead joint operations to 
arrest and deport alleged Chinese criminals from Cambodia, often with no regard 
for standard extradition proceedings through the Cambodian justice system. 

Moreover, Chinese diplomats have been known to complain bitterly to the 
Ministry of Information and the editors of local newspapers when they discover 
unfriendly reports about Chinese interests in the Malaysian-owned, 
Chinese-language Sin Chew Daily newspaper. Free-speech advocates note that this is a seeming 
contradiction with China's policy of not interfering in other countries' 
internal affairs. 

Meanwhile, two other Chinese-language newspapers blatantly back Beijing's 
influence over the country, though both insist they maintain independent 
editorial policies. "Many Cambodian Chinese are pro-Beijing, so they like reading our 
paper," Liu Xiaoguang, editor-in-chief of Huashang Ribao, said in a July Phnom 
Penh Post interview. "We report Chinese-friendly news, so being completely 
neutral is impossible." 

No doubt many of the Chinese-language newspapers' 12,000 copies sold daily 
are purchased by Cambodia's estimated 350,000 ethnic-Chinese citizens. Beijing 
has made strong inroads with that local community by paying for new school 
buildings, sending teachers from China, and delivering new textbooks published by 
the respected Jinan University. 

Still, China's growing soft power and influence are clearly a worry for many 
Cambodians and foreign agencies. In 2002, the then United Nations high 
commissioner for refugees, Mary Robinson, accused the Cambodian government of bowing 
to Chinese pressure to hand over two practitioners of Falungong, a harshly 
suppressed group inside China that opposes the Communist Party's rule through 
non-violent meditation exercises. 

Further concerns were sparked when Cambodia's National Assembly voted this 
July 26 to guarantee profits with government cash for Sino-Hydro's new Kamchay 
hydropower plant - even if the new facility underperforms. Opposition 
politicians and investment consultants privately contend that Beijing has already lent 
the funds to Hun Sen to ensure that the Chinese state-owned utility's 
investment at least appears financially viable during its start-up phase. 

Those concerns come on top of suspicions that other Cambodia-based Chinese 
firms receive preferential treatment over other foreign investors. 

For example, Chinese-owned logging concerns such as Wuzhishan LS Group face 
detailed accusations of reckless - and in some cases illegal - cutting from 
groups like Global Witness, a global environmental watchdog that has on occasion 
openly clashed with Hun Sen. Still, they say, Cambodian officials have failed 
to pursue the case, despite Cambodia's clear forestry laws. 

Questions of undue influence, political or otherwise, will grow if CNOOC's 
tentative interest in offshore and onshore Cambodian oilfields results in 
unusually generous concessions. Time will tell if Cambodia today is a glimpse of 
tomorrow's world, a place where China's investors loom large, and its political 
influence runs deep. 

---------------------------------------

AFP, October 5, 2006

Japanese PM's ambiguity pays off -- for now

Japan's new prime minister has scored a quick success with his upcoming trip 
to patch up regional ties but his ambiguity on emotive historical issues is a 
risky strategy, analysts said.

On Sunday, just two weeks into his premiership, Shinzo Abe will realise one 
of his early goals when he travels to China before heading on to South Korea.

Both countries had refused to see Abe's predecessor Junichiro Koizumi in 
protest at his repeated visits to the Yasukuni shrine, seen as a symbol of Japan's 
wartime aggression in Asia.

Abe, a noted hawk, has studiously avoided saying whether he will visit the 
shrine, which honors war dead and war criminals alike.

China hinted it was satisfied with his approach, saying the "obstacle" in 
bilateral ties had been cleared, but analysts said Abe needed to proceed with 
caution.

"If Abe visits the shrine later, efforts to mend ties with Asia will just 
collapse," said Yoshikazu Sakamoto, a professor emeritus at the University of 
Tokyo.

Satoru Miyamoto, Northeast Asia specialist at the Japan Institute of 
International Affairs, said it would be "hard for him not to go" to the central Tokyo 
shrine.

"If China asks him at the summit 'please don't go' at the summit, Abe can't 
say 'I understand and I won't go,'" he said.

"Then if he actually visits the shrine, that could destroy the truce."

Japan's first prime minister born after World War II has refused to share his 
ideas on the country's militarist past, and questioned the legitimacy of 
US-led trials of war criminals honored at the Yasukuni shrine.

Ironically, Abe is believed to hold more fervently nationalistic views than 
Koizumi.

The former prime minister repeatedly apologized for Japan's past atrocities. 
But while popular with the public, he needed to please the conservative wing 
of his Liberal Democratic Party which disdained his reformist streak.

Few doubt Abe's conservative credentials. His grandfather, former prime 
minister Nobusuke Kishi, was jailed but not tried for his role in the World War II 
government.

Abe has refused to confirm accounts he went to the Yasukuni shrine discreetly 
in April. But domestic politics may compel him to clarify his stance, 
especially with upper house elections looming in July.

Abe kept up his delicate dance on Wednesday, refusing to delve into his ideas 
on the shrine.

"If by mentioning the Yasukuni issue it stays a diplomatic and political 
problem, I will refrain from discussing it. But my belief remains that I want to 
pay respects to those who fought and fell for the country," Abe told reporters.

Japan, China and South Korea have an interest in improving relations. Abe has 
been under pressure from business leaders as Japan's economic recovery is 
based in no small measure on the booming Chinese market and industrial base.

China, in turn, has gradually cracked down on anti-Japanese activism.

China wants both to promote trade with Japan and to "avert an explosion of 
anti-Japanese sentiments transforming into revolts against the one-party 
dictatorship," Miyamoto said.

"And for South Korea, improving ties with Japan could help obscure its 
deteriorating relations with the United States," Miyamoto said.

South Korean President Roh Moo-Hyun, who has followed a "sunshine policy" of 
reconciling with communist North Korea, has faced criticism by the opposition 
that he has undermined Seoul's alliance with Washington.

Abe is known for his hawkish stance on North Korea, opening the way for 
conflict with China and South Korea over their approaches to Pyongyang, which on 
Tuesday said it was planning to test a nuclear bomb.

For now, the North Korea row will take pressure off Abe to address his 
thoughts on the Yasukuni shrine during his trip.

"The North Korean threat of a nuclear weapons test provided another reason 
for the neighbors to stay away from the thorny issue of the shrine," said 
Kenichi Odawara, former professor of Nihon University in Tokyo.

---------------------------------------

Asia Times
Friday, October 6, 2006

Abe Tackles the High Hurdles

By Hisane Masaki 

TOKYO - For many observers of the Japanese diplomatic scene, it may look like 
deja vu. Japan's new prime minister, Shinzo Abe, will make a speedy 
fence-mending tour of two Asian neighbors soon, just as his predecessor did five years 
ago. That trip proved to be a complete failure later on. Will the new one be 
any different? 

The fence-mending trip will take Abe to Beijing on Sunday for talks with top 
Chinese leaders President Hu Jintao and Premier Wen Jiabao, and then to Seoul 
for talks with President Roh Moo-hyun the following day. 

The visits will be Abe's first overseas since he took office on September 26, 
succeeding Junichiro Koizumi. This underscores the importance Abe, a 
conservative hawk, attaches to mending the deep rift in political relations with the 
Asian neighbors - the negative legacy left by his predecessor - early in his 
new administration. It is rare for a Japanese premier to make an overseas trip 
so soon after being elected. 

Japan's relations with China and South Korea have plunged to their lowest 
points in decades because of Koizumi's repeated visits to the war-related 
Yasukuni Shrine in Tokyo and other issues stemming from Japan's history of aggression 
and atrocities to its neighbors. Also, Tokyo is locked in territorial 
disputes with Beijing and Seoul, and the row over natural-gas reserves in the East 
China Sea is smoldering between Tokyo and Beijing. 

Koizumi's pilgrimages to the Shinto shrine drew particularly angry protests 
from China and South Korea as implicit glorification of Japan's past 
militarism. The shrine is widely regarded as a symbol of Japan's militarist past, as it 
honors World War II Class A war criminals among some 2.4 million war dead. 
China and South Korea had rejected summit talks with Koizumi since last year. 

Abe's visit to Beijing will be the first by a Japanese premier since Koizumi 
went there in October 2001. The summit talks will be the first since April 
2005, when Koizumi and Hu met in Jakarta on the sidelines of the Asia-Africa 
Summit. Abe's meeting with Roh will be the first Japan-South Korea summit since 
last November, when Koizumi and Roh met in Busan on the fringes of an annual 
meeting of leaders from member nations of the Asia-Pacific Economic Cooperation 
(APEC) forum. 

Assuming that Abe would become Japan's new leader, China had softened its 
rhetoric toward Japan in the closing days of the Koizumi administration, with 
Premier Wen saying, "China-Japan relations are at an important historical phase." 
At the behest of Abe, who was still Koizumi's chief cabinet secretary, the 
government sounded out China and South Korea about holding meetings. As Japan 
and China began to move toward improving ties, South Korea also agreed to hold 
talks between Abe and Roh. 

Abe had instructed the Foreign Ministry to set his tour of Beijing and Seoul 
before Roh's planned visit to the Chinese capital on October 13. That was 
apparently because the new Japanese premier wanted to nip in the bud the 
possibility of Chinese and South Korean leaders publicly showing a unified stance 
against Japan over the Yasukuni, history-perception and other issues. 

Political observers say Abe also hopes that by choosing China and South Korea 
for his first overseas visits and thereby demonstrating his firm resolve to 
get Japan's hamstrung Asia diplomacy up and running again, his ruling Liberal 
Democratic Party (LDP) will be able to gain momentum in by-elections for the 
House of Representatives set for this month, the first electoral test of the new 
premier. 

To be sure, Abe's forthcoming tour of Beijing and Seoul has raised hopes for 
a significant improvement in ties. But it has also raised some concerns, 
because it is reminiscent of Koizumi's trips to the two capitals in October 2001, 
six months after he took office. In Beijing, Koizumi met with then-leaders 
president Jiang Zemin and premier Zhu Rongji. A week later, Koizumi met with South 
Korea's then-president Kim Dae-jung in Seoul. 

Koizumi's 2001 visits to Beijing and Seoul were also for fence-mending, amid 
criticism then of Japan's resurgent militarism. Earlier that year, the 
Japanese government had approved a history textbook that China and South Korea 
claimed glossed over Japan's wartime atrocities, and Koizumi had already made his 
first pilgrimage to Yasukuni Shrine as premier. 

In China, Koizumi laid a wreath at a Chinese war memorial and visited a 
museum dedicated to China's wartime resistance against Japan. "Looking at this 
museum, I felt again the horror of war," he told reporters. "I looked at the 
various exhibits with a feeling of heartfelt apology and condolences for those 
Chinese people who were victims of aggression. We must not go to war again." 

At the time many people in China and South Korea thought these words showed 
that Koizumi had repented for his visit to Yasukuni Shrine and that he would 
not repeat it. But Koizumi continued to worship at the shrine every year. His 
last shrine visit as premier was on August 15 this year, the anniversary of 
Japan's 1945 surrender in World War II. As things turned out, the 2001 visits to 
Beijing and Seoul by Koizumi sowed the seeds of further distrust and conflict. 

Abe's Ambiguity Strategy

In the lead-up to his election, Abe was studiously vague on whether he would 
continue his predecessor's policy of shrine visits. During his upcoming tour 
of Beijing and Seoul, Abe is likely to similarly vague on the issue. Abe has 
also said he will not say whether he has visited the shrine. As Koizumi's chief 
cabinet secretary, Abe made a secret visit to the shrine in April, although he 
has refused to confirm it. 

China has demanded that Abe pledge not to visit the shrine while in office. 
But Abe said, "It's important that leaders realize frank talks without 
attaching conditions." Japanese officials say that in arranging Abe's visit to 
Beijing, they have not agreed to a Chinese demand for him to pledge not to worship at 
Yasukuni Shrine during his tenure. If that is true, the question remains: Why 
has China dropped its condition for accepting Abe's visit? 

Some observers point out that it is possible that Japan and China reached 
some agreement on the Yasukuni issue during prior consultations, which satisfies 
Chinese officials to a certain extent. There is even speculation within the 
Japanese government that aides to Abe and Chinese officials have reached a 
secret accord under which Abe will not visit the shrine during his tenure. "China 
understands that Prime Minister Abe will not visit Yasukuni Shrine while he is 
in office," a Chinese government source said. 

Some observers also say that Tokyo may have already promised that Abe will at 
least make a statement on the issue during the upcoming summit that will 
satisfy Beijing. "We each have our previous position, but we need to consider the 
public sentiment on both sides and work to use our wisdom," Chief Cabinet 
Secretary Yasuhisa Shiozaki said. 

The new Japanese leader's stance on the Yasukuni issue has been criticized 
even at home. Yukio Hatoyama, secretary general of the largest opposition 
Democratic Party of Japan, grilled Abe in parliament over his ambiguous stance on 
the Yasukuni issue. Hatoyama claimed that Abe's "ambiguity strategy will hurt 
the trust" of China and South Korea and that he would "commit the same error as 
former prime minister Junichiro Koizumi". 

Many observers believe that Abe's visits to Beijing and Seoul will not bring 
about a dramatic turnaround in Japan's strained ties with them. Rather, they 
believe the visits will be just a first - albeit significant - step in the 
process of putting the ties back on a sounder footing. That is because of sharp 
differences between Abe and Chinese and South Korean leaders over the Yasukuni 
and history-perception issues. 

Abe has declined to clarify his personal views on Japan's wartime 
responsibility, saying, "Politicians should be modest about analyzing history." He also 
sidestepped a long-running and sensitive debate within Japan about whether the 
emperor or executed war criminals led the country into defeat in World War II 
by saying that it was "not appropriate for the government to determine who 
exactly was responsible as the national leader for the last war". 

At his upcoming summits, Abe is expected to say that he will uphold the 
government's view on history as presented in prime-ministerial statements that 
admitted and apologized for Japan's past invasions and colonization. These 
statements include one issued in 1995 by then prime minister Tomiichi Murayama, a 
socialist, on the 50th anniversary of Japan's defeat in World War II, and another 
issued in 2005 by Koizumi on the 60th such anniversary. 

In South Korea, meanwhile, Abe is expected to show his intention to deal with 
history issues further, such as expediting the return of the ashes of former 
Imperial Japanese Army soldiers and civilian personnel who were interred on 
the Korean Peninsula. Abe is also expected to convey to Roh a Japanese decision 
to support South Korean Foreign Minister Ban Ki-moon's candidacy to become the 
United Nations chief, although Ban is now assured of a victory in the race to 
succeed outgoing UN Secretary General Kofi Annan. 

In his separate talks with Chinese and South Korean leaders, Abe is also 
expected to propose a resumption of suspended exchanges of visits by them to each 
other's country. Chinese President Hu said in June that he hopes to visit 
Japan "at an appropriate time if conditions are met". Abe is likely to agree with 
Hu and Roh at least to meet again on the sidelines of this year's APEC summit 
in Hanoi in mid-November. 

Pyongyang's Dangerous Brinkmanship

In addition to putting bilateral relations back on a sound track, defusing 
tensions over North Korea's nuclear and missile programs has impinged on Abe's 
agenda during his Beijing and Seoul visits. Abe quickly condemned Pyongyang's 
announcement on Tuesday that it would test a nuclear bomb as "absolutely 
unacceptable" and warned that the international community would adopt a "stern" 
response to it. 

Abe has a reputation as a headliner on Pyongyang, especially over the issue 
of past North Korean abductions of Japanese citizens. This has earned him a 
high degree of public popularity in Japan, enabling him to take the helm of the 
LDP and government at the relatively young age of 52. Many in Japan found 
Pyongyang's actions unforgivable, lighting a nationalist fuse here. 

In step with the US, Japan imposed financial sanctions on North Korea 
recently over its volley of missile test launches in early July. Japan and the US are 
stepping up pressure on North Korea as Pyongyang still refuses to return to 
six-party talks, which have been stalled since last November. But many 
observers question the effectiveness of unilateral financial sanctions. The other 
countries participating in the six-nation talks - South Korea, China and Russia - 
remain reluctant about pushing Pyongyang even further. 

Top Japanese and US security advisers Yuriko Koike and Stephen Hadley, 
meeting at the White House on Tuesday, agreed to increase cooperation to deal firmly 
with any North Korean nuclear test, sharing ''strong concerns'' over 
Pyongyang's announced nuclear-testing plan. 

Koike said she and Hadley agreed that their countries will maintain close 
contact and cooperate to deal with the matter, working first on a UN Security 
Council presidential statement and also promoting cooperation on crisis 
management in advance of a possible nuclear test. Japan wants to get the council to 
adopt a statement before Abe's visits Beijing and Seoul so it can avoid exposing 
differences during the visits over how to deal with Pyongyang. 

Should North Korea carry out a nuclear test, Tokyo is poised to impose 
additional unilateral sanctions on Pyongyang, including the expansion of the current 
ban on port calls by the Mangyongbyon-92, a North Korean passenger-cargo 
ferry that serves as the main direct link between the two countries, to include 
freighters from North Korea and other countries. Tokyo is also poised to work 
toward the adoption of a Security Council resolution to impose sanctions, based 
on Chapter 7 of the UN Charter. 

The United States has welcomed Abe's plan to visit China and South Korea. 
There have been growing concerns in the US, even within the administration of 
President George W Bush, that a possible isolation of Japan, the closest US ally 
in Asia, could hurt US interests in the region. In his talks with Koike, 
Hadley also noted the importance of Tokyo, Seoul and Washington taking concerted 
steps on North Korean issues. 

Hisane Masaki is a Tokyo-based journalist, commentator and 
scholar on international politics and economy. Masaki's e-mail 
address is yiu45535 at nifty.com. 

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