NVDB005_-_CH_3.003._Cambodia’s_Embrace_on_BRI_and_Its_Geopolitical_Implications_-_Dr._Neak-3

Diplomatic Briefing — KAS Cambodia and CICP

22 — DP Vol. 05

Cambodia’s Embrace on the Belt and Road Inititive (BRI) and Its Geopolitical Implications

policy. As Cambodia is committed to achieving middle-income and high-income status by 2030 and 2050 respectively, domestic economic diversification and increasing economic pragmatism with external partners are the rationales behind this ambition. It is an undeniable fact that right after the launch of the BRI, Cambodia’s bandwagoning to such an initiative demonstrated the Kingdom’s ambition for economic competitiveness through diversifying its sources of growth and expanding its economic horizon. Through this, Cambodia believes that the BRI would further upgrade her infrastructure development and produc- tion-capacity cooperation, among other economic benefits. 1

The footprint of the BRI’s implementation in Cambodia has been strongly set thanks to the full political trust of both leaders. From the Cambodian perspective, China’s new foreign policy initiative is a great oppor- tunity for Cambodia as well as for ASEAN to harness the resources provided for much-needed infra- structure projects. We assess hereafter the case of the planned Multipurpose Sihanoukville Special Economic Zone . Based on a preliminary study in which China’s Shenzhen is used as a model, Sihanoukville would be transformed from a once-sleepy coastal city to a financial, industrial, and tourism regional hub. It would act as a logistics hub linking all the Kingdom’s special economic zones with itself as the main focal point.

The plan to build a multi-purpose economic zone in Sihanouk through the BRI framework is a significant part of China’s geoeconomics strategy in Cambodia. Cambodia and China are committed to a 21st century maritime silk road. Building a multi-purpose special economic zone in a coastal city under such a framework would follow the master plan devel- opment model from China’s Shenzhen from the 1990s to the present day. The Shenzhen Model focused on a development-oriented national strategy, compre- hensive development to cover the whole region with a clustered structure and infrastructure framework, and dynamic adjustment to optimize various pace layouts for the different stages of development. The appli- cation of Shenzhen’s development to the building of this multi-purpose special economic zone through the BRI framework would present various opportunities and strengths to the Kingdom. Firstly, Cambodia would be able to harness economic and financial opportu- nities from the fourth global industrial transfer. The coastal city would attract more foreign investment in

1 Vannarith, Chheang (2017). Cambodia Embraces China’s Belt and Road Initiatives. ISEAS-Ishak Yusof Institute. https://think-asia. org/bitstream/handle/11540/7213/ISEAS_Perspective_2017_48. pdf?sequence=1

fourth industrial revolution industries, infrastructure, social facilities, and more. Secondly, Cambodia would be able to experience the rise of the technology-driven new economy, which will bring more possibilities for catching up with fast-changing technology and innovation. These opportunities are feasible thanks to the geographic strengths of Sihanoukville, as it is the only potential national maritime gateway hosting a deep-water international seaport, airport, and coastal tourism resources.

The Digital Silk Road in Cambodia: Connectivity for Economic Growth

Besides the case of the special economic zone (SEZ) plan in Sihanouk, the BRI’s soft infrastructure projects have also set a foundation for Chinese strategic involvement in the Kingdom. In recent years, the Covid-19 global pandemic has disrupted the implementation process of China’s BRI projects in Southeast Asia. Yet there has also been a shift in the priorities of China’s BRI projects, through which ‘soft infrastructure’ projects, namely the Digital Silk Road and Health Silk Road , have been given greater importance. Since 2017, Xi Jinping has put these two components at the core of China’s BRI diplomacy, which has been accelerated significantly during the global pandemic. 2 Throughout the region, it was reported that the Digital Silk Road and Health Silk Road are setting a new and strong footprint in ASEAN countries, as China is eager to dominate the global tech industry vis-à-vis its strategic rival the US.

For Cambodia, the main question would be: is the country ready for this rapid digital transformation? What benefits does it get out of the Digital Silk Road project? Not until 2021 did Cambodia adopt a policy framework for the Cambodian Digital Economy and Society. This is a comprehensive policy response to the fast-changing technological advancement as well as an attempt to exploit the full potential of the emerging Fourth Industrial Revolution, as detailed in Cambo- dia’s long-term economic vision 2025 and the Rectan- gular Strategy-Phase IV. Looking at the Digital Silk Road, it could contribute to the kind of digitalization envisioned in the long-term strategic plan. But more importantly, Cambodia seems to have no choice but to embrace the Digital Silk Road. The project incorporates 5G technology, mobile structure, e-commerce links, the use of artificial intelligence (AI), international trunk passageways, and the installation of fiber optics cables,

2 Wang, Zheng (26 May, 2022). Assessing the Belt and Road Initiative in Southeast Asia amid the Covid-19 Pandemic (2022- 2022). ISEAS-Ishak Yusof Institute. https://www.iseas.edu.sg/ articles-commentaries/iseas-perspective/2022-57-assessing-the- belt-and-road-initiative-in-southeast-asia-amid-the-covid-19- pandemic-2021-2022-by-wang-zheng/