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Hun Sen's Cambodia

Cambodian leader, in Beijing, says China pledges nearly $600m in aid

Cambodian Prime Minister Hun Sen speaks during a meeting with Chinese President Xi Jinping at the Diaoyutai state guesthouse in Beijing, China, January 21, 2019.   © Reuters

PHNOM PENH (Reuters) -- China has pledged 4 billion yuan ($588 million) in aid to Cambodia from 2019 to 2021, Prime Minister Hun Sen said on Tuesday, highlighting strong ties between Beijing and Phnom Penh amid a European Union threat of trade sanctions.

Hun Sen is on a three-day visit to China, his most important regional ally, and held bilateral talks with President Xi Jinping in Beijing in which he asked for more aid and investment in his Southeast Asian country's crucial textile industry.

Xi pledged the 2019-21 grant in response, Hun Sen's official Facebook post said. The Chinese leader also promised to import 400,000 tonnes of rice from Cambodia, vowed to push bilateral trade to $10 billion by 2023 and encouraged more Chinese investment, the post said.

"The President said the relationship between China and Cambodia is very special, compared to other countries," Hun Sen's post said.

China's Foreign Ministry said in a statement Xi told Hun Sen China wanted to strengthen political, economic and security cooperation with Cambodia and increase China-Cambodia coordination at the United Nations and within the Association of Southeast Asian Nations.

The two sides should hasten links between China's Belt and Road plan and Cambodia's development strategy, Xi said. The statement made no mention of the financial aid.

China has already poured billions of dollars in development assistance and loans into Cambodia through Xi's Belt and Road initiative, which aims to bolster land and sea links with Southeast Asia, Central Asia, the Middle East, Europe and Africa.

Some Western governments have accused China of pulling countries into a debt trap with the initiative, an accusation China has denied.

Hun Sen's Cambodian People's Party won all seats in a general election in July after the Supreme Court dissolved the main opposition Cambodia National Rescue Party (CNRP) in 2017 at the government's request.

The European Union condemned the election as not credible and threatened to strip Cambodia of its Everything but Arms status because of the crackdown on the opposition, media and civil society groups before the election.

It imposed tariffs on rice from Cambodia last week for the next three years to curb a surge in imports it said had damaged EU producers.

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