Sociology Case Study: Analyzing China's Role in Cambodia's Development

This case study examines the impact of China's aid and investment on Cambodia's development, focusing on the sociological implications of foreign direct investment and the implementation of development programs. It explores the structuralism theory, the role of governments, and the impact of China's financial support, particularly in the hydro water sector. The study highlights the bilateral relationship between China and Cambodia, the involvement of the Prime Minister's office in development financing, and the implementation of the "Build, Operate, Transfer" model. It also addresses both the positive and negative consequences of the Chinese venture, including environmental impacts and the distribution of benefits. The study concludes that while China's aid has been crucial for Cambodia's development, it is essential to consider the environmental and social impacts and ensure equitable distribution of benefits. The case study underscores the complex interplay between foreign investment, political dynamics, and economic growth in a developing nation.

Running head: SOCIOLOGY
Sociology
Name of the Student
Name of the University
Author Note

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The following case study aims at the development programs through the investments of
the different countries in the world. The responsibilities of these foreign countries are huge in
depicting the important coherent elements that are responsible for the development of the
countries (Hameiri, 2019). The developmental activities are fuelled by the domestic and
international actors because they too have an interest in this context. The funding of these
projects either by the multilateral or the bilateral donors is exclusively a very crucial quotient.
Some theories are used in this context to show the development of these programs and their
proper implementations as well. This is where the responsibilities of the international and
domestic actors are recognized. The timeline of the project and its impact on the host country
should be measured. In this case study, the topic for discussion will be the aid and investment of
China on Cambodia The purpose of the Chinese investments is to make sure that all the projects
are being executed properly ensuring the growth of these small countries.
China is regarded as one of the countries that has been the pioneers in the global
investments. Their business perspectives are growing higher everyday and they will look to go
through a rapid growth of their investment possibilities. This will enable China to become one of
the business superpowers in the world (Hameiri, 2019). The liberal international order
maintained by the United States has been challenged by China at different times. Therefore, it is
quite critical that the Chinese based organizations and the Chinese government together is trying
to prove their power in the ultimate ways. China has aimed at the international investment that
will be highly beneficial for their economic growth or the growth of the GDP. The geostrategic
interests of China have been seen as a very important matter all over the world. The use of
China’s money has been a matter of concern for the people in the country. There are certain

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negative points in using the money of China and letting them get the advantage in the global
economy.
However, there are certain positive points in this scenario as well. The China led projects
for the different countries have impacted in a large scale basis. This is surely a very crucial
aspect of the development of those countries (Hameiri, 2019). The role of the governments to
receive the aid from China and utilize this aid for their development has not been highlighted in
the proper ways. One such example in this scenario is that of Cambodia. China has pledged to
provide more aid and support for the all over development of Cambodia. However, this needs
some time as well (Yeophantong, 2016). In order to make Cambodia a very highly developing
country, the role of China cannot be ignored at all. Cambodia is definitely one of the poorest
nations in the Southeast Asia but the growing influence of China to invest in their business can
grow the GDP of the country to a high level (Beeson, 2016). As per the given source, it can be
acknowledged that Cambodia is regarded as a staunchest ally to China. Cambodia was offered to
be a member in the ASEAN but they had rejected it. The activities and conducts of China in the
South China Sea and the communiqué criticizing of Cambodia is definitely a stark proof of this
(Nordensvard, Urban & Mang, 2015).
The economy of Cambodia can be strengthened by the foreign direct investments and this
is the thing that should be kept in mind. More than a quarter of the FDI stock of Cambodia has
been occupied by China. This is why China is undoubtedly the largest helping hand of Cambodia
from different point of views (Beeson, 2016). The structuralism theory is one of the most
important theories that can be deemed as very important in the development programs of the
different countries. Cambodia is not an exception of this as well (Ratner, 2017). They have been
given the strategic direction by China and this is one of their major positive points. The

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development programs in finance and economy have been quite enthralling for a country like
Cambodia to increase their economy (Gungwu, 2017). The political system of Cambodia has
been very much important in case of the demand-driven system. This can be strengthened by the
patronage politics. This kind of system is controlled by Hun Sen (Ratner, 2017). However; it will
be very much difficult to make the distinctions between the Chinese aid and Chinese investment.
Still it must be said that the Chinese aid and investment has a huge potential impact on the
economic growth of the country. Most recently, the reason for both the Chinese aid and
investment has been regarding the growth and development of Cambodia in the hydro water
sector. The government of Cambodia is believed to be the primary driving force behind the
projects that are being financed by China (Tan-Mullins, Urban & Mang, 2017). This immense
economic impact of China on the economy of Cambodia is something to be cared out. Without
the help of this power, Cambodia would not have been able to develop their infrastructure on the
use of hydro water.
The inflation of Cambodia has been very high and this is one of the main reasons as to
why the country has not been able to develop in terms of their business investment. In the current
times, it is a very common thing to consider that the countries cannot develop without the proper
help of the other countries if they are poor (Ratner, 2017). The close relationship between China
and Cambodia can be proved from the fact that China would very soon Cambodian soil as their
naval base. So, China will definitely look to help Cambodia to intensify their bilateral
relationship (Tan-Mullins, Urban & Mang, 2017). The leader of Cambodia had reached to China
and asked them to help in this project. Many Chinese leaders have often promised some poor
countries of immense amount of money so they could be interested in this deal. This is mainly a
bilateral deal so the main actors are obviously the two countries China and Cambodia (Urban &

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Nordensvard, 2014). This is why the bonding between the two countries should be a positive
factor for the development of South East Asia.
One striking fact in this scenario is the issue that the development financing of China will
be done from the office of the Prime Minister. Other international aids are generally managed
from the Council for the Development of Cambodia. This is how Cambodia has to play a very
huge role in the shaping of its development through the direct financing of Cambodia. The
beginning of the hydro power project began in the year 2014 with the promise of investments
around US$500-700 million every year (Urban & Nordensvard, 2014). This is why it has been a
lucrative opportunity for Cambodia to delve deep into. This is how they could shape their foreign
allies as well. However, this money will be given to Cambodia based on the initiation of the
projects. As a major part of the structuralism, the government used the model of “Build, Operate,
Transfer” (BOT) so the projects could be initiated in the real time. Cambodia was unable to
arrange for the funding of these projects indeed (Urban et al., 2015). The promise of the Prime
Minister was to provide the electricity to 70%of the households of the country. This BOT model
would be highly impactful on the foreign investors to establish the ultimate upper hand in the
economic growth of the country (Matthews & Geheb, 2014). Therefore, it is apparent that the
grasp of the foreign investors like China would make developments in Cambodia but it would
again strengthen the position of China as a global economic superpower. Strong countries like
USA are also afraid of this rise of China.
Through the use of this “Build, Operate, Transfer” (BOT) model, many facilities had
been offered to the investors. These facilities included the things like tax breaks, free trade
licenses in the country and others. In case of the hydro water sector, the free trade licenses would
be given for the use of water and construction of the dams (Urban et al., 2015). This is how the

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FDI in Cambodia has given the maximum opportunities for the utilization of resources for China.
This is probably also the reason that China has been largely interested in making the investments
in the Cambodia and uses their resources for their benefits to a large extent. Hun Sen, the Prime
Minister of the country will also try very hard to stick to his promise since he has to do
something to revive the electoral support for the party (Siciliano et al., 2015). The memorandum
of understanding had been signed by the government of Cambodia with the Electricity of
Vietnam to make the most of the situations. Also, it must be said that the LS2 had been
implemented in the November, 2012 so the issues could be resolved. This was done by the
council of ministers of Cambodia (Matthews & Geheb, 2014).
In this scenario, it should also be said that the harmful environmental impacts of the
scenario could be seen as LS2 had been implemented. The construction of the dam had begun
after the signing of the LS2 agreement (Siciliano et al., 2015). So, it can be said from this
discussion that the overall impact of China’s financial aid and industrial aid on Cambodia has
left a mark on the political conditions of Cambodia as well (Matthews & Motta, 2015). The
environmental impacts have been heavy and negative in this discourse since many trees had been
cut down outside the reservoir area as well. The inner matters of Cambodia should be resolved
and it is only then they would get the benefits from the project. The regulatory system of
Cambodia is very weak and they should have done something to mitigate this issue. However,
this hydro water project had a considerable amount of the benefits for Cambodia. This fact
rejects the previous notion that only the investors had the edge in FDI agendas (O'neill, 2014).
After seeing all these kinds of developments in Cambodia, it can be said that this has been a
major success for the Cambodian government.

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The environmental issues should be dealt properly so the common people of the country
do not suffer from this issue. The distribution of benefits will also prove to be profitable for the
recipient governments like Cambodia (Matthews & Motta, 2015). The development aids and
financial helps by the Chinese government will definitely be helpful for Cambodia and the work
is still on the way to be executed with efficiency. This shows the fact that the program or project
has been running for more than last five years (O'neill, 2014). However, the negative impacts on
the people should be curbed down since the Royal Group had made exploitations of their ties
with the Cambodian government. They have made huge profits but the common people have not
been benefitted from the environmental perspectives.
In the concluding section of this paper, it can be said that the Cambodian hydro power
sector had needed a major breakthrough for the overall development of the country. The aid of
Chinese government has been very much important to be considered as a savior for Cambodia. It
has been a bilateral deal between the two countries only as China is seen as a major investor in
Cambodia. The Chinese investments in the country have opened many new opportunities for the
development of Cambodia. The major actors of this deal are these two countries. There have
been both positive and negative consequences of the deal but it is true that both the countries
have gained the benefits from this deal. Therefore, it has been measured that the impact of this
Chinese venture has been quite beneficial for Cambodia from all the aspects despite some social
and environmental concerns. The utilization of the “Build, Operate, Transfer” (BOT) model and
structuralism theory have been instrumental in this case of Cambodia.

7SOCIOLOGY
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