China will provide Cambodia with 4 billion yuan (U.S. $587.6 million) in aid over the next three years, Cambodia’s Prime Minister Hun Sen said Tuesday, as Phnom Penh further cements ties with Beijing in the face of sanctions threats from the European Union.
Hun Sen met with Chinese President Xi Jinping on Monday for bilateral talks during a three-day trip to Beijing and requested additional aid from China, his country’s largest donor and investor.
In a post to his Facebook account Tuesday, Hun Sen said that Xi had pledged the 4 billion yuan in aid “for a three-year project” from 2019 to 2021.
”The Chinese President said that in 2019, China will import 400,000 tonnes of rice from Cambodia, will increase bilateral trade to U.S. $10 billion by 2023 and encourage more Chinese investment.
Hun Sen said Xi “praised China’s special cooperation with Cambodia and vowed to make the relationship even stronger.”
Additionally, the prime minister said, the two nations signed several smaller deals that would see China provide Cambodia with a highway from Sihanoukville to Phnom Penh, a clean water initiative, and a bodyguard compound to protect the Council of Ministers in the capital, as well as restore several temples in Cambodia and rebuild its National Route 7, which was damaged in recent floods.
A statement from China’s Foreign Ministry said Xi had called for greater cooperation bilaterally, and increased coordination at the United Nations and the Association of Southeast Asia Nations (ASEAN)—several member nations of which are embroiled in disputes with China over territorial claims in the South China Sea.
EU TARIFFS
Last week, the EU reintroduced tariffs on rice from Cambodia for three years after a probe found that Cambodian rice imports had nearly doubled since 2013 while prices dropped, hurting local producers. A statement from the European Commission announcing the decision said it had been made separate from deliberations over the EBA scheme.
Council of Ministers spokesman Phay Siphan has said the rice tariffs will not affect Cambodia, which will encourage exports to alternative markets, such as the Philippines, and will continue to rely on demand in China.
Trade volume between Cambodia and China was valued at U.S. $5.8 billion in 2017, up 22 percent from U.S. $4.76 billion dollars a year earlier, while China is currently Cambodia’s largest investor, and has poured U.S. $12.6 billion into the Southeast Asian nation from 1994 to 2017.