FT Investigation: How China bought its way into Cambodia

by: James Kynge, Leila Haddou and Michael Peel / SEPTEMBER 9, 2016 / Financial Times

In Cambodia’s Chinese business community, “Big Brother Fu” is a name to be reckoned with. A former officer in China’s People’s Liberation Army, his thickset build and parade-ground voice reinforce the authority suggested by his nickname. But his physical bearing pales next to the heft of his political connections. Few, if any, foreign investors in this small but strategically important Southeast Asian nation enjoy access as favoured as that of Fu Xianting.

At state events, Mr Fu wears an official red sash studded with gold insignia, attire that hints at his ties to Hun Sen, Cambodia’sauthoritarian ruler. So close is Mr Fu to the prime minister that the leader of his personal bodyguard unit, some of whose members have been convicted of savage assaults on opposition lawmakers, calls him “a brother” and has pledged to “create a safe passage for all of Mr Fu’s endeavours”.

These connections have helped Mr Fu and his company, Unite International, win a rare concession to develop one of the most beautiful stretches of Cambodia’s coastline into a $5.7bn tourist destination. More broadly, they signal how big money, secret dealings and high-level backing from China’s Communist party have helped pull Phnom Penh firmly into Beijing’s sphere of influence.

Mr Fu’s story shows how private Chinese companies, backed by Beijing’s diplomatic resources and the unrivalled muscle of its state-run banks, are spearheading a commercial engagement that helps form the foundation for China’s political and strategic ambitions.

“In terms of money, China is the number one,” says Phay Siphan, a secretary of state within Cambodia’s council of ministers. “The power of China is getting much bigger … we choose China because [its investment] does not come with conditions.

“A number of western investments come with attachments,” he adds. “[They say] we have to be good in democracy. We have to be good in human rights. But in Cambodia we went through a civil war and we understand that if you have no food in your stomach, you cannot have human rights.”

An investigation by the Financial Times reveals the favoured treatment that Chinese companies have won from Cambodia’s leadership, resulting in the award of land that far exceeded legal size limits, the apparent overriding of a state decree for the benefit of a Chinese investor and official support against the protests of dispossessed farmers.

An analysis of state documents shows that in several cases, Chinese investments were facilitated personally by Mr Hun Sen, a ruler of 31 years who insists on being referred to as “Lord Prime Minister and Supreme Military Commander”. Global Witness, the UK campaign group, claimed in a report this year that the Cambodian leader presides over a “huge network of secret dealmaking and nepotism” that has allowed his family to amass stakes in leading industries and help “secure the prime minister’s political fortress”. Read more…

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