Thu, Aug 16, 2012 - Page 9 News List

China’s sway over Cambodia tests Southeast Asian unity

Analysts say China is keen to flex its economic muscle with cash-strapped states in the region in a bid to exert control in the South China Sea

By Prak Chan Thul and Martin Petty  /  Reuters, Phnom Penh

That was demonstrated last month when an ASEAN foreign ministers’ meeting in Phnom Penh ended without a joint communique for the first time in the group’s 45-year history. The Philippines placed the blame on China, saying it had leaned on hosts Cambodia to torpedo any mention of territorial disputes in the oil and gas-rich South China Sea.

According to diplomats at the ASEAN meeting, Laos and Myanmar tacitly supported Cambodia’s determination to keep bilateral disputes with China out of the communique.

In recent years, China has been cosying up to Laos, weakening the long-standing influence of neighboring Vietnam, building roads, bridges and stadiums and offering new technology and free Chinese university scholarships to hundreds of students.

Chinese immigrant communities are swelling and at least two Chinese gambling enclaves have been set up inside Lao territory, one of which visited by Reuters featured casinos, hotels and karaoke bars under the watch of uniformed Chinese police. Last year, two-way trade jumped 40 percent and Chinese banks offered Laos US$3 billion of loans, on top of promises to build a US$7 billion high-speed rail network. It has been much the same in Myanmar, which under Western sanctions moved into Beijing’s orbit. Border trade and Chinese investment in oil, gas and hydropower boomed. However, with most sanctions suspended in reward for political and economic reforms after the end of army rule, Myanmar’s uneasy dependence on China might soon come to an end.

For Beijing, keeping ASEAN splintered suits its strategy on the South China Sea, the region’s worst potential military flashpoint, where China wants to negotiate bilaterally with its much weaker rivals.

A less than united ASEAN would also help keep the US at bay.

Xinhua news agency said this month the US was trying to present itself as an honest broker in the dispute, but that its real intent was to stir up trouble and drive a wedge between China and its neighbors for its own gain.

Washington should “thoroughly abandon its plot to seek advantage from the chaos so the South China Sea can resume its role as a sea of peace, friendship and cooperation,” Xinhua said in an angry commentary.

Lured by ASEAN’s growth and wary of China’s spreading influence, the US is moving in swiftly as part of its strategic shift toward Asia, signing military cooperation deals that have emboldened Vietnam and the Philippines in their disputes with Beijing in the South China Sea.

Last month, Washington pledged millions of dollars for social, environmental, health and educational development in Indochina and sent two of its biggest-ever business delegations to Vietnam and Myanmar.

“Because this region has grown so significantly, we have no choice, but to be here and be here in a profound, direct and visible way,” said Myron Brilliant, senior vice president of the US Chamber of Commerce international division.

“We’re making money here, doing OK, but there’s a lot more that can be done,” Brilliant said

The US shift offers Cambodia, Myanmar and Laos a chance to hedge their bets, but experts say China will not let its influence in ASEAN wane without a fight.

“China has gotten a strong head-start and is deeply entrenched in their economies; a shift will not be easy,” Glaser said.

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