ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
The flag of a Chinese government-owned company flutters on a ferryboat in Laos near the construction site of a high-speed railway project.
Belt and Road

Chinese project spending empowers Southeast Asia's strongmen

A giant new stadium being built in Cambodia gives authoritarian rule a lift

Nikkei staff writers | Myanmar, Cambodia, Laos

PHNOM PENH -- About 15 km north of the center of Cambodian capital Phnom Penh a huge stadium is under construction in a sparsely-populated area punctuated with vacant lots. Attempts to photograph construction workers -- who look like they could be Chinese -- are shut down by a security guard, who says it is the prime minister's project and warns of potential arrest.

The $157 million, 55,000-seater stadium is the main facility in the Cambodia-China Friendship City, construction on which began in late 2016. Around the stadium, housing and commercial facilities, a golf course and a safari park will also be built, with China footing the bill for all the work.

Cambodian Prime Minister Hun Sen has said this represents the biggest grant China has offered to fund an infrastructure project abroad. In 2023, Cambodia is set to host for the first time the Southeast Asian Games, a regional sporting event, with this stadium its main venue. With the event, the premier aims to show off his country as a first-class power of the Association of Southeast Asian Nations.

Among the new buildings will be an upscale housing facility aimed at attracting wealthy Chinese to relocate.

"This is virtually going to be a Chinatown," a young local resident said.

Cambodia quickly adopted a pro-China attitude over the past five years. The change was triggered by the general election in 2013. Hun Sen, who has been prime minister since 1985, experienced a drop in his approval rating, with the Cambodia National Rescue Party, the largest opposition at the time, taking 55 seats, or 45%, in the lower house. Citizens had grown frustrated with a stagnating economy, joblessness and a ruling party rife with corruption.

It was at this time that China approached the Cambodian government. Facing animosity from Vietnam and the Philippines over its military expansion in the South China Sea, Beijing calculated that ASEAN would be unable to adopt a motion denouncing its actions if it won Cambodia over to its side, as the association's resolution-making system requires a unanimous vote.

Tourists watch portraits of Chinese President Xi Jinping and Cambodian King Norodom Sihamoni ahead of his visit in Phnom Penh in 2016.   © Reuters

China promised huge infrastructure investment in Cambodia, ostensibly as part of its Belt and Road Initiative. Hun Sen gained a powerful ally in return. He proceeded to suppress his political opponents, and forced the CNRP to dissolve.

In this direct way, China's infrastructure development projects have supported authoritarian politics in Southeast Asia.

Not a million miles from the stadium construction, in the northern Laotian city of Luang Prabang, a railway bridge is being built. It is part of a planned high-speed train line linking Kunming in southern China's Yunnan Province with the Lao capital of Vientiane. Chinese nationals work at the site, located on the outskirts of the ancient city designated as a World Heritage site.

A Laotian man operating a ferryboat across the river near the bridge said he was earning a handsome $1,500 a month to ferry a Chinese manager back and forth between the site and his camp on the far bank. That is eight times the monthly average pay in Laos.

The railway, for which more than 200 bridges and tunnels will be built, is scheduled to be in full operation by the end of 2021. When it is complete, it will form a link extending from China in the north, passing down through Laos, then Thailand, and all the way south to Singapore. It will bring an opportunity for change to land-locked Laos.

Lao Prime Minister Thongloun Sisoulith has said the project is very important for the country's development.

But the total construction cost of $6 billion, representing about half the country's gross domestic product, is a heavy burden, even with China promising to foot 70% of it. It has forced the government to cut 40% of new civil servant hires and change plans to build new government offices. The socialist Lao People's Revolutionary Party has silenced criticism against Chinese involvement with the weight of its authoritarian single-party rule.

Meanwhile in Malaysia, Prime Minister Mahathir Mohamad, who took office in May following the country's first-ever change of power in a general election, has suspended infrastructure projects initiated by Najib Razak, his pro-China predecessor. Mahathir said Malaysia could not afford to borrow large amounts of funds from China or to repay them.

One of his first target was the 690 km-long East Coast Rail Link, extending from an area near the Thai border to Port Klang near the capital Kuala Lumpur. It would have created a land transport route linking the country's east and west coasts.

Chinese President Xi Jinping had a strong interest in the success of the project as he saw the railway as a backup route for a scenario in which the important trade passage of the Strait of Malacca might be closed. However, the enormous cost of the project, estimated to reach 81 billion ringgit ($20 billion) raised eyebrows.

A China-backed project is also under review by the Myanmar government. China often causes tension with its Southeast Asian neighbors when it ships in hundreds of Chinese workers for its infrastructure project work, freezing out local workers from employment opportunities.  

China's infrastructure investment projects risk changing the tide of opinion in the neighboring countries it seeks to dominate, as has already happened in democratic countries.

This is the second part in a four-part series on the broad implications of China's Belt and Road initiative.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more