Cambodia and Nepal are harbingers of Beijing’s emerging influence

For the last eight years I have lived in South and Southeast Asia – in Bangladesh, Cambodia and now Nepal. I have yet to visit China, but China has come to me. From being invisible to those of us living beyond its borders, a large but not imposing presence, it has become a rival to the United States across the region.

Has this been organized in Beijing? Or was it the organic consequence of China’s rapid economic growth and vast size? Today the inevitability of Chinese political power is accepted, even as Western politicians point out that Beijing, at least before the current economic crisis took hold, controls only the world’s fourth largest economy, and armed forces not yet capable of projecting even regional power.

When I lived in Bangladesh early in the decade, China was another poor, overpopulated country. China’s economic growth was a source of envy to Bangladeshis, but so was India’s. Talk of a highway linking China to the Bay of Bengal was taken in the same spirit as proposals from Burma – opportunities for diplomats and politicians to justify good dinners in fine hotels. Chinese businessmen appeared here and there in Dhaka, but they were lost in the mix of South Koreans, Americans, Indians and others looking to take advantage of a low-wage economy.

Cambodia: Chinese influence explodes

In 2002 I arrived in Cambodia. The local Chinese population was economically significant but politically marginalized. During the Khmer Rouge regime they were targeted for their wealth; during the Vietnamese occupation that followed they were persecuted for being Chinese – Beijing had supported Pol Pot, and invaded Vietnam as punishment for the displacement of their pet Maoist in Phnom Penh. But the community survived.

By 2003, Chinese influence was detectable but subtle, and natural given the links between the two countries. In 2004 that influence exploded. This is not something you can document, because Cambodia keeps poor records of immigration and emigration: a business visa is available on arrival at the airport in Phnom Penh, for just $5 more than a tourist visa. Some estimates are that as many as 300,000 Chinese arrived in the country that year, going to work on timber concessions and construction, adding financial and human resources to every sector of the economy.

The United States, despite its “secret bombing” (not secret to the Cambodians) and invasion of large swaths of rural Cambodia during the Vietnam War, was viewed in a positive light by most Khmers. In 2003, I watched the first days of the U.S. invasion of Iraq on a television in a restaurant in a provincial town. The people who were watching cheered. “Iraq is lucky,” one older man said. “Where were the Americans when Pol Pot was here?”

U.S. policy in Cambodia was dominated by the old anti-Communist line, making it hard to establish good relations with the ruling Cambodian People’s Party. The CPP evolved from the puppet regime installed by Hanoi in the early 1980s, and it leads Cambodia’s coalition government. Maybe China saw a diplomatic opportunity, or maybe its business people simply recognized that Cambodians’ laissez-faire attitude meant opportunities for the Chinese.

Whatever the explanation, the Chinese have filled a void. As longtime Cambodian Prime Minister Hun Sen colourfully put it, “If 1.3 billion Chinese were all to urinate at the same time, it would unleash a major flood in Cambodia. But China’s leaders are doing good things with their partners … When China gives, there are no strings attached. You can do what you want with the money” – unlike Western donors, with their concerns over human rights, labour standards and so on.

Beijing now has a reliable ally in Cambodia, a profound change from the days when Hun Sen described China as his country’s worst enemy. Beyond access to the country’s unregulated economy, the payoff to China has not been huge, but payoff there is – expulsion of Falun Gong activists, Cambodian support in the United Nations for China’s positions on a range of issues. As a small country with a history of being batted between greater powers, Cambodia recognizes its subservient role, and is particularly sensitive to shifts in regional influence. It is a canary in the diplomatic mineshaft. Its decision to nestle under China’s wing may be an important indicator of what’s to come in the region. The American eagle is now playing catch-up but, with its economy teetering and its ability to project military power eroded by the ongoing wars in Iraq and Afghanistan, it has lost the advantage.

Nepal: The shifting balance

Nepalese sometimes describe their country as a soft mango squeezed between the hard coconuts of India to the south and China to the north. There is a long tradition in Kathmandu of playing off the northern against the southern neighbour. However, the Himalayas to the north form a natural border, and the mountains, along with closer cultural ties to India, have kept Kathmandu’s eyes focused southward. Historically India has treated Nepal as a satellite state, in somewhat the same way the United States treats Canada. “Equidistance” is official Nepali policy, but until recently working with Beijing was a pose to irritate the Indians, and not a genuine policy alternative.

Now the balance is shifting. Like Cambodia, Nepal has undergone a recent increase in Chinese influence. While China’s aid contributions have remained small compared to those of Western donors or India, Nepal now considers Beijing to be Delhi’s equal.

From the mid-1990s to 2006, Nepal was wracked by a civil war.1 The guerrillas called themselves Maoists, although that is a misnomer inasmuch as their leaders are largely upper-caste Brahmins with few links to the Chinese. Ex-guerrilla leader Prachanda (a nom de guerre meaning “The Fierce One”) came out on top in an election in the spring of 2008. Now Prime Minister, he took his first foreign trip to Beijing, for the closing of the Olympic Games. This trip had the same impact on India’s elite as George W. Bush’s first foreign trip in 2001 had on Canada’s elite – Bush visited Mexico City, not Ottawa.

China was embarrassed by Nepal’s Maoists, who took up arms in the name of the Great Helmsman decades after he went out of favour back home. But the Chinese now seem happy to encourage closer ties with Kathmandu. The Nepali habit of appeasing Chinese interests predates Prachanda’s rise to power, and crosses the ideological spectrum. Nepal’s now-dethroned absolute monarch closed the Dalai Lama’s Tibetan Welfare Office in 2004, and throughout 2008 all major Nepali parties supported the brutal crackdown on Free Tibet protesters in Kathmandu. In an unusual display, the Chinese ambassador repeatedly called for Nepal to be even more aggressive in stopping the protests, a contrast to the policy of “non-interference in the affairs of sovereign states” that Beijing purports to place at the centre of its foreign policy. In recent weeks Nepal’s Home Minister has talked of deporting Tibetan refugees who lack proper papers.

There is irony in this, as the police have refrained from using force against political demonstrations, or criminals, since the King was overthrown in 2006. Similarly, while Kathmandu regularly criticized the government of Bhutan for its expulsion of ethnic Nepalese in the early 1990s, there was no comment when Nepalese living along the China-Nepal border, who rely on access to Chinese goods, starved this year when the frontier was sealed by a Chinese regime afraid of pro-Tibetan infiltrators.

In contrast with Cambodia, Nepal has a poor investment environment, a congealed bureaucracy not yet convinced that feudalism is over and the legacy of a ten-year civil war capped by ongoing political uncertainty. And unlike Cambodia, Nepal already has a strong patron state in India. There are fewer economic opportunities for Chinese business, and a much smaller Chinese community with which to build links. Kathmandu’s resident Tibetans seem unlikely to embrace Chinese advances. And Nepal has little that China needs: the new Himalayan republic’s main export is young men, who travel to India or the Gulf in search of work.

Nonetheless, China has clearly grown in influence. Discussions are underway to link China’s railways with Nepal, a project that makes sense only if India agrees: a railway that stopped in Nepal would make Sarah Palin’s Bridge to Nowhere look like a sound investment.

Will China’s political model spread?

So far, China’s expansion into its near-abroad seems driven by economic interest, with political concessions extracted as an afterthought. As Hun Sen put it, Chinese money comes with no strings attached. When rumours spread of an American naval base to be built in Cambodia, China did not object: it kept buying up more Cambodian forests, hotels and gem mines. Nepal’s government is desperate for any support for its ambitious development plans, and bashing a generally disliked Tibetan minority costs little in political capital.

The concern for liberal democrats – in Cambodia, Nepal or Canada – should not be China’s investment model but the spread of its political model. For the first time, a country outside of the petrostates is credibly claiming that Western-level economic growth can be achieved without Western political freedoms. For governing elites with autocratic tendencies – and that describes most regimes in the world – it is tempting to imagine your country stable and wealthy, while you and your friends govern it forever. And in a country like Nepal, acknowledged even by its own elites as having been badly misgoverned, there is a strong temptation to embrace one-party development in exchange for the promise of economic growth. The limitation of much of this growth to a minority of the population and the widespread social unrest and corruption that continue to infest the Chinese countryside are easy to ignore, thanks to strict media controls and the displays of ostentatious wealth seen in China’s cities and in coverage of the recent Olympics.

Cambodia and Nepal are two small countries in China’s growing orbit of economic and political influence. They are small but potentially important harbingers of a future in which a free press and individual liberty are dispensable, exchanged for basic economic security. As I write in October 2008, the developed world is falling into an economic crisis that may develop into the worst since the 1930s. Now, as then, there is a hunger for new models of governance. Watch this space.


1 See my “Nepal’s Kerensky interlude,” Inroads, Winter/Spring 2007, pp. 72–80, 85–88.