Deputy Prime Minister Sun Chanthol, first vice president of the Council for the Development of Cambodia (CDC), addresses a luncheon event during Hong Kong chief executive John Lee’s first official visit to Phnom Penh on July 31. CDC
Deputy Prime Minister Sun Chanthol, first-vice president of the Council for the Development of Cambodia (CDC), defended Chinese president Xi Jinping’s Belt and Road Initiative (BRI) for Cambodia, asserting that it will not cause the country to fall into a debt trap, as some fear.
Chanthol made the remarks at a luncheon event with Hong Kong chief executive John Lee in Phnom Penh yesterday (July 31), during the latter’s first official visit to Cambodia from July 30-31 to expand trade cooperation opportunities.
The deputy prime minister called for stronger trade relations between Hong Kong and Cambodia.
Highlighting the improvements in infrastructure such as roads, bridges and airports, Chanthol noted that China is leading in rebuilding Cambodia’s infrastructure.
“President Xi Jinping’s BRI also helps us build our infrastructure, and I am standing right here in front of you to defend [it]. The BRI is not a debt trap but a source of financing to build infrastructure that will benefit the world,” he said.
The current state of Cambodia's public debt stands at $11.09 billion, designated as "sustainable" and "low risk" as of the second quarter of 2024, according to the Ministry of Economy and Finance.
BRI projects in Cambodia include the Sihanoukville Special Economic Zone (SSEZ), Phnom Penh-Sihanoukville Expressway, Siem Reap-Angkor International Airport (SAI) and Morodok Techo National Stadium, as well as roads, bridges, hospitals, hydropower plants and rural water supply, among others.
Kin Phea, director of the Royal Academy of Cambodia’s International Relations Institute, agreed with Chanthol on the benefits of the BRI but cautioned that avoiding a debt trap depends on the country’s management of loans received through the initiative.
“The BRI is not a debt trap and contributes significantly to the development of Cambodia. Over the 10 years of BRI, we have seen an increase in development projects in Cambodia, such as roads, bridges and airports, especially the Phnom Penh-Sihanoukville Expressway and many other projects,” he said.
“The fear of a debt trap from the BRI is a political narrative from the West. Our debt ceiling is at a manageable level. But whether there is a risk from debt or not depends on the effectiveness with which the government spends the debt. Therefore, transparency in debt spending is vital,” he added.
Regarding the strengthening of trade relations between Hong Kong and Cambodia, Chanthol emphasised that the Cambodian government’s role is to facilitate the private sector, not to dictate or manage it. He mentioned that the government has formed 17 working groups, co-chaired by government ministries and private sector representatives, to facilitate business operations, maintaining an open and liberal business environment.
Chanthol stressed that Cambodia has a young and dynamic population, with 60 per cent of its 17 million people under the age of 35. He also pointed out the country’s strategic location in the heart of the sub-Mekong region, which has a combined population of 250 million consumers.
Additionally, Cambodia benefits from trade preferences from the EU through the Everything But Arms (EBA) initiative and from the US through the Generalized System of Preferences (GSP).
During the event, Lee stated that his first visit to Cambodia aims at promoting closer relations and exploring new areas of cooperation. He noted during his meeting with Prime Minister Hun Manet that there are many areas where both sides can collaborate for better results.
“I am impressed by the prime minister’s focus on the economic development of Cambodia. I have observed that Cambodia’s development has been very fast-growing,” Lee said, adding that he noted many other areas of development in Cambodia besides textiles and garments.
“And I also know that great attention has been given to innovation and technology, green technology and logistics. There are lots of new programmes, and Hong Kong has strengths and experiences to offer, as we are an international financial, trading and shipping centre,” he added.
Manet and Lee discussed expanding cooperation in potential sectors such as trade and investment, banking and finance, technology and the digital economy, tourism and education. They also explored enhancing people-to-people connections and the possibility of direct flights from Hong Kong to Siem Reap.
In an interview with reporters, Steve Chuang, chairman of the Federation of Hong Kong Industries (FHKI), said that he sees potential in expanding business relations with Cambodia, especially given its political stability.
He noted that Hong Kong’s good relations with Cambodia also depend on the strong relationship between China and Cambodia.
Chuang said that Hong Kong excels in innovation technology and is interested in investing in Cambodia due to its stability.
“We are here because you have the people, you have reasonable land costs and you have a very stable government. So, we think that here we can mass-produce our technology and export to the US, Europe, China [and beyond],” he said.
He added that the FHKI is ready to facilitate investment between Hong Kong and Cambodia.
“Personally, I really love this country due to its political stability, global connections and ongoing infrastructure development, including railways, high-speed roads and airports. I think it is growing very fast. So, you can see there are a lot of opportunities to grow,” Chuang said.
He further noted that Hong Kong has much to offer in helping Cambodia advance to high-end innovation and technology, rather than continuously relying on a labour-intensive workforce.
