As China's ties with Southeast Asia grow ever closer, Cambodia, a traditional friendly country of China, is receiving increasing attention in China's public discourse. The Detchong Funan Canal, which began construction in August 2024, has even become a "viral" project on Chinese social media. From an economic development perspective, Cambodia has maintained GDP growth of over 6% for several consecutive years, with its economy and society full of vitality. However, it should also be noted that Cambodia still relies heavily on capital from countries such as the U.S. and Japan, with over 90% of settlements still relying on the U.S. dollar, while its per capita GDP remains below $2,500.
At the "Global South and Southeast Asia" academic conference held in June 2025, Guancha.cn engaged in dialogue with Chhay Vanarith, Chairman of the Consultative Committee of the Cambodian National Assembly, to discuss the development trends of Sino-Cambodian relations, and analyze the challenges and prospects for Chinese enterprises deepening their presence in Cambodia.
[Interview/Observer Network Tang Xiaofu, Translation/Chen Jiarui]
Cambodia, like other Southeast Asian countries, does not want to take sides.
Guancha.cn: As Chairman of the Consultative Committee of the Cambodian Parliament, could you explain the functions of this committee to those who are less familiar with it? What key policies and suggestions have you recently proposed for Cambodia's development, particularly for integrating into the Global South?
Chhay Vanarith: The Parliament plays a vital role in all aspects of Cambodia's national and ethnic construction. Not only does it undertake legislative functions but it also represents public opinion. Its importance is increasingly highlighted today.
The Consultative Committee of the Parliament is dedicated to handling various state affairs, such as social security, governance of the informal economy, and issues in the construction sector. At the conferences convened by the committee, we have thoroughly discussed numerous topics. We hope these discussions will enhance the parliament's understanding of national issues so that members of parliament can better supervise government performance and provide clear directions and policies for the government.
Chhay Vanarith photo by Tang Xiaofu
For Cambodia's leadership, the concept of the Global South is relatively new, and they know little about it, but they are willing to explore possible opportunities. This is what I call the beginning of exploration.
Guancha.cn: After the United States launched the Indo-Pacific Economic Framework (IPEF) in 2023, several ASEAN member states joined, but Cambodia, Laos, and Myanmar were excluded. You've written articles about avoiding a new Cold War. How do you think ASEAN and Cambodia can avoid falling into this trap?
Chhay Vanarith: I think the Indo-Pacific Economic Framework (IPEF) doesn't have much substantive content, so it doesn't matter whether we're included or not. From Cambodia's perspective, the IPEF divides ASEAN. It's a project initiated by the United States, and we don't think it benefits ASEAN.
Cambodia's position is very clear: we consistently support ASEAN unity and centrality, and any initiative that does not target third countries and does not undermine ASEAN unity and centrality. But the IPEF is undermining this, so we do not support this agreement.
Guancha.cn: Cambodia remains silent on the South China Sea issue, unlike Vietnam and the Philippines, which have taken a stance. Does this reflect China's core position on the South China Sea issue? What do you think is the prospect for the negotiations on the Code of Conduct (COC) in the South China Sea?
Chhay Vanarith: Cambodia does not interfere in the internal affairs of other countries; this is a basic principle of our foreign policy. Regarding cooperation in the South China Sea, such as fisheries, marine environment, and marine management, we can talk about these issues. But when it comes to sovereignty issues and territorial integrity, we cannot intervene. ASEAN also has no right to intervene in sovereignty issues. If you have sovereignty issues, you need to resolve them through bilateral mechanisms or submit cases to international courts. ASEAN is not a court and cannot decide which land belongs to which country.
In fact, the South China Sea issue can be divided into sovereignty issues and practical cooperation, and we must make a distinction. We will actively participate in practical cooperation projects and search and rescue operations; however, sovereignty issues can only be put on hold for now, and intervening in sovereignty issues is not our responsibility. We support the negotiation of the COC, support ASEAN's position, and regard it as an important mechanism for promoting cooperation and crisis management, but we do not interfere in the sovereignty issues of other countries.
We suggest Cambodia join the BRICS countries
Guancha.cn: Cambodia's GDP has been steadily growing at an annual rate of 7%, but its per capita GDP remains around $2,500. Do you think this paradox of high growth and low development is common among "Global South" countries, and how can it be overcome?
Chhay Vanarith: We have been quite successful in high growth, but we are now in a phase of slower growth. The pandemic, U.S. tariffs, and intensified external competition have caused this year's economic growth to slow down, with the growth rate dropping to 6%. We are working hard to restore the growth rate to 7% over the next decade, but at this stage, Cambodia first needs to think about how to overcome the middle-income trap so that we can become a middle-high income country by 2030 and a high-income country by 2050.
Cambodia
We currently need to invest heavily in human capital, technology, innovation, and infrastructure to support economic growth, which is also some of the work we are doing. We focus on public sector innovation, private sector innovation, government innovation, and social innovation. Innovation is an indispensable key concept for promoting Cambodia's development.
Guancha.cn: Indonesia and Vietnam dominate the headlines in the Global South, while Cambodia has gained prominence through forums such as the Asia-Europe Meeting. How can small countries amplify their influence in global Southern cooperation?
Chhay Vanarith: We will fully commit ourselves to facilitating in-depth dialogues on global Southern issues across various institutions. But as I said, this is just the beginning. Cambodia's leadership is still unclear about what the Global South is and what its significance and purpose are, but I think they are willing to promote the story of the Global South and emphasize the role of small countries within it.
We need clearer direction on what steps we can take next and how to utilize these regional and global platforms to advance the Global South agenda, but at this stage, I am not sure what the strategic message to convey is.
Guancha.cn: You also mentioned that to become a high-income country by 2050, you aim to become a middle-high income country by 2030. Do you think this poverty reduction strategy will inspire other "Global South" countries, such as Laos and other African nations?
Chhay Vanarith: Cambodia has always pursued a diversified strategy, meaning we do not rely on any single country. Diversification has become a creed, a foreign policy, and an economic development strategy.
China plays an important role in Cambodia's affairs, but Japan and South Korea are equally significant. This is very important. Moreover, we are negotiating to upgrade our bilateral relationship with Australia, and we will also consider France and India later. Of course, we also want to explore how to engage in economic cooperation with BRICS countries and see how we can benefit from this regional organization.
But we always prioritize the Association of Southeast Asian Nations (ASEAN). We believe that a regional order led by ASEAN is most beneficial to Cambodia's interests. If ASEAN can lead the integration and order of the entire region, it will be most beneficial to its members. Cambodia, like other Southeast Asian countries, does not want to take sides. This is very clear. But as long as we work together, achieve mutual benefits, and seek cooperation, China is Cambodia's most important economic partner.
Guancha.cn: You also advocate expanding BRICS to Southeast Asia to counter Western attacks and financial hegemony. So if Cambodia applies to join, what kind of support should China provide, and what should it avoid?
Chhay Vanarith: Cambodia needs to reduce its dependence on the U.S. market because our economy is largely dependent on the U.S. market. To reduce dependence on the U.S. market, we need to further diversify the sources of economic growth through industrialization, as textiles and travel goods are the main export industries in Cambodia.
Can China lead the industrialization of Southeast Asian economies, driving them from resource-intensive industries toward high-tech sectors? At the same time, we can reduce our dependence on the U.S.
Textile manufacturing is labor-intensive, and many Cambodian textile companies are Chinese companies investing in Cambodia and exporting goods to the U.S. Local businesses benefit from this, but all these factors also affect Cambodia's manufacturing sector, especially labor-intensive industries.
Cambodia needs to diversify, transitioning from the textile industry to high-tech industries and delving deeper into agricultural processing and other agricultural fields. Therefore, beyond aid, we expect China to transfer more technology and support to developing countries and the Global South. We hope China can "teach how to fish," rather than simply "giving fish." This is the message I want to convey to our Chinese friends.
Guancha.cn: What are your thoughts on BRICS?
Chhay Vanarith: Now Cambodia is being very cautious about joining BRICS. The leadership does not want to join yet, perhaps because of the U.S. tariff stick, but they may consider joining BRICS as observers in the coming years, just like Vietnam.
China's Southeast Asia High-Speed Rail Plan
BRICS is one of the key pillars of the Global South and an important economic pillar challenging the Western-dominated economic system, so we suggest the cabinet join BRICS, but this is just my proposal. Our leadership is not ready yet. They want to maintain good relations with the U.S. and Europe, as I said, the U.S. and Europe are our main export markets, so any action we take needs careful consideration.
When it comes to winning hearts and minds, China still has a lot of work to do.
Guancha.cn: China is one of Cambodia's largest investors, as you said, projects like high-speed rail face criticism over debt risks. So how do you think China's investments compare to those of other countries in Cambodia?
Chhay Vanarith: China is Cambodia's most important economic partner and trade investment partner. I believe China's investments have had a positive impact on Cambodia's economy. But large-scale investments also mean that more stories about China need to be told and more information about Chinese investments needs to be provided.
Therefore, Chinese enterprises in Cambodia need to be more open to researchers and the public so that we can conduct research, help tell these stories, and let the public understand the contributions Chinese enterprises have made to Cambodia's economy.
Have Chinese enterprises followed proper procedures, conducted social impact assessments, and environmental impact assessments? What benefits can they bring to local people, the environment, and society? We need this information. Only then can scholars and researchers record it, write articles, share it with the public, and allow people to appreciate and be more grateful for Chinese investments.
Guancha.cn: The West often portrays Cambodia as a proxy of China, while some Western media say Cambodia has sometimes leaned toward the West. Do you think Cambodia is a pragmatic neutral country oriented toward development? Can you give a few examples to explain?
Chhay Vanarith: Cambodia's government maintains close relations with China, but in my observation, the public prefers the U.S., as Cambodians are more exposed to the U.S. and Japan, and I think they trust Japan the most. Based on this, China needs to do more to win the hearts of the people, as this is sustainable.
A large number of Chinese tourists visit Cambodia
Political leaders change, but the public never does. Therefore, I believe that in the relationship between Cambodia and China, how to win the hearts of the people will be a challenge. In the past, the opposition party accused Cambodia of being a puppet of Vietnam. Now, some Western scholars and policymakers still view Cambodia as a proxy of China. But even Brunei, a small country with only 500,000 people, wants independence, let alone Cambodia.
We have fought many wars, resisted colonial and imperial forces, and fought for independence from France and the U.S. So I believe that no country in this region wants to become a pawn of any great power.
Guancha.cn: What do you think China can do to win the hearts of the Cambodian people?
Chhay Vanarith: I think the problem lies in poor communication and lack of transparency. When it comes to infrastructure development, the government does not share relevant information with the public. So we know little about China's investments or development assistance in Cambodia. For example, if China gives Cambodia one billion dollars in aid, how will Cambodians use this money for social and economic development? In fact, the government does not share this, so some of the money may go elsewhere, right? That's a problem.
I think Thailand's Board of Investment (BOI) promoting small smart projects is a good example. Through similar "small but precise" projects, China can enhance its international image and expand its influence. So what China needs to do is publicize its development projects, including infrastructure development projects, to let people know what China is doing.
Secondly, there needs to be more civilian exchanges, such as student cultural exchanges, and coordination and communication with the media.
In this regard, the U.S. is very good at it. The U.S. Embassy does an excellent job in cooperating and exchanging with universities through non-governmental organizations. So I think China may need to change and broaden its strategies for cooperation with different stakeholders, not just focusing on government-to-government exchanges, because China not only needs to deal with governments but also needs to win the hearts of the people.
Guancha.cn: You once urged ASEAN to pilot the Cross-Border RMB Payment System (CIPS), but 90% of Cambodia's financial system depends on the U.S. dollar. What are the real obstacles to trying to promote the use of the renminbi?
Chhay Vanarith: We hope to promote the increased use of domestic currencies by various countries. The process of de-dollarization takes time because the U.S. dollar has been part of our financial system since the 1990s and has formed a culture and tradition. Changing culture, changing mindsets, and changing social behaviors take time.
However, regardless of this, some measures we have taken have already promoted the use of domestic currencies. Of course, we are very actively promoting digital payment systems, so Cambodia has a very free and open financial system. Long-term benefits will come from the increase in financial transactions and the use of domestic currencies.
Guancha.cn: Could you list some of the pros and cons of de-dollarization and trying to use the renminbi?
Chhay Vanarith: We need to diversify our foreign exchange reserves. For example, the renminbi can become part of financial reserves or financial transactions because diversification is our guiding principle in foreign policy and economic policy, so we do not want to rely on a single currency. In Cambodia, we are too dependent on the U.S. dollar, so we need diversification, and we need to use more renminbi, Japanese yen, and euros, which are key global currencies. This is the direction forward.
RMB and Cambodian Riels
With the increase in trade with China, the volume of renminbi transactions is gradually rising. This is a positive signal, so we adopt local currency and renminbi for settlement together.
Guancha.cn: Both Chinese and Cambodian enterprises exhibit a cautious attitude. To improve integration and further share benefits, what advice do you have for Chinese companies?
Chhay Vanarith: First, I think Chinese enterprises need to be more transparent and more involved in public affairs, involving stakeholders in decision-making. Additionally, Chinese enterprises need to provide more capacity building for locals.
There are complaints in Cambodia that most Chinese companies hire Chinese nationals rather than Cambodian locals. Why not hire locals and provide them with skills training so they can benefit more from Chinese enterprises? This is the first point: Chinese enterprises need to transfer knowledge and technology to local people.
Secondly, in the investment field, China can upgrade production to more technology-driven and innovation-driven investments. Many Chinese enterprises in Cambodia are resource-intensive, and they come to Cambodia because of cheap labor, but in reality, this is very resource-intensive and labor-intensive.
Therefore, we expect China to shift its investments in Cambodia toward technology-driven and innovation-driven investments. To achieve this, it is necessary to invest in the capability building of local talent teams. In this regard, Japan's approach is different. Before starting operations, they train local employees for six months so they can acquire the skills needed for their jobs.
The Japanese company Minebea Mitsumi has a very successful model for foreign investment in Cambodia, making it a very successful knowledge and technology leader in the eyes of locals. China can join this trend and increase investment, upgrading manufacturing to more technology-driven and innovation-driven investments.
Guancha.cn: So do you hope China will establish education in Cambodia?
Chhay Vanarith: Yes, I very much hope that China will invest in education in Cambodia. Education is a big industry, and students in Southeast Asia generally believe that education should encourage free thinking and critical thinking, but they think Chinese universities do not encourage critical thinking.
Chhay Vanarith GSN
Guancha.cn: That is not true.
Chhay Vanarith: Yes, it's just some people's views. That's why we need to pass on more information to South Asian students, faculty, and researchers. China's academic institutions are very open to new ideas and inclusive of different viewpoints and diverse opinions. This is exactly what we need to communicate, and we also need to change the misunderstanding of China's academic institutions in the South Asian region.
We can now see that students have more positive views of China, but we still need to do more. I think the education industry, education enterprises, will help China build soft power and win the hearts of the people.
Guancha.cn: Will the Cambodian cabinet agree to large-scale investment in education by China?
Chhay Vanarith: Cambodia welcomes investments in education and skills training from any country. Cambodia's investment environment is very open, and among Southeast Asian countries, our investment laws are the most relaxed; you can even own 100% ownership.
The scale of Cambodia's education industry is huge, so come and invest! Do real skill enhancement and professional training, I think this is a field where China's education industry can explore, invest, and make money. After all, relying solely on government scholarships to send students to study in China can only accommodate a very limited number of Cambodian students.
We urgently need more vocational training schools, so if you choose to invest in vocational education and training in Southeast Asia, whether two-year or one-year programs, you can achieve continuous development and earn more profits.
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