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Cambodia’s Foreign Policy Choice during 2010 to 2020: From Strategic Hedging to Bandwagoning
The Korean Journal of International Studies 20-1 (April 2022), 55-88
Published online April 30, 2022
© 2022 The Korean Association of International Studies.

Chandy Doung, William Kang, and Jaechun Kim [Bio-Data]
Received February 7, 2022; Revised March 11, 2022; Accepted March 21, 2022.
This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/3.0) which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.
Abstract
This research traces the ways in which Cambodia has handled the escalating contention between the United States and China in Southeast Asia from 2010-2020 and the dynamics that shaped Cambodia’s foreign policy during that period. The existing literature has tended to view Cambodia’s foreign policy choices as monolithic and consistently pro-China. This research challenges this conventional assessment about Cambodia’s foreign policy. The analyses in this research indicate that the changes in Cambodia’s foreign policy choices toward the United States and China have been driven by domestic political dynamics to a substantial extent, along with the other exogenous variables such as economic, security, and diplomatic factors. In addition, internal factors are not always stable, as most observers of Cambodia’s foreign policy have claimed. Due to the unstable nature of internal factors, Cambodia’s foreign policy has not always tilted towards China continuously. Cambodia’s foreign policy has been in flux and swung between the United States and China. To drive this point home, this research adopts and applies the returns-maximizing and risk-contingency options of the strategic hedging model to demonstrate Cambodia’s foreign policy shift from hedging to bandwagoning.
Keywords : Cambodia, US-China Competition, Hedging, Bandwagoning, Southeast Asia
INTRODUCTION

Despite Cambodia having been mired with precarious tensions with its neighbors throughout much of its history and turning a new leaf during the 1990s, the growing US-China competition in the Indo-Pacific region has added another wrinkle to the already uneasy existence of the Kingdom of Cambodia in the 21st century. How has Cambodia handled the escalating contention between the United States and China? Although the friendly relationship and cooperation continuously expands and transcends many generations between Cambodia and China, the extant literature assumes Cambodia’s foreign policy as monolithic and consistently pro-China. Most scholars argue that Cambodia’s relationship with China as either a patron-client relations (Ciorciari 2015; Kusuma 2019) or bandwagoning with the purposes of political, economic, or security factors embedded (Pheakdey 2012; Chen and Yang 2013; Heng 2020; Po and Primiano 2020). This research challenges this conventional assessment of Cambodia’s foreign policy.

This research is distinct in that it seeks to build upon the previous literature on Cambodia’s foreign policy in two different ways. First, it argues that the changes in Cambodia’s foreign policy toward the United States and China has been driven by domestic political dynamics to a substantial extent, along with other exogenous variables of the economic, security, and diplomatic factors. Even though Cambodia has been under the leadership of Prime Minister Hun Sen for more than three decades, he rationalizes and often changes policy based on a cost-benefit analysis, where opportunities and challenges are constrained due to external factors and domestic demands. Although external factors do matter and contribute to Cambodia’s foreign policy, the reshaping of Cambodia’s foreign policy is greatly influenced by the transition in internal factors. Second, internal factors are not always constant as most scholars perceived, thus, Cambodia has not tilted towards China continuously. This research adopts the returns-maximizing and risk-contingency options of the strategic hedging model and analyses how Cambodia’s foreign policy shifted from strategic hedging to bandwagoning during the period of 2010 to 2020. Cambodia’s foreign policy shift from strategic hedging to bandwagoning with China stems from Hun Sen’s regime survival, changing domestic political dynamics, and the perceived US’ criticism and interference of Cambodia’s internal affairs.

THEORETICAL FRAMEWORK

Strategic Options of a Small States

Cambodia is sandwiched between two powerful states in Vietnam and Thailand, along with the presence of the regional great power of China. However, Cambodia has no shared border with China, which has a different relationship with some other ASEAN states that are entangled with China in maritime disputes. As part of ASEAN, and as a small state, Cambodia is ranked 90th in regards to its geographical area, 105th in terms of real GDP, 179th in terms of real GDP per capita, 70th in terms of population, and 42nd in terms of its military expenditure (CIA: The World Factbook 2021). Cambodia has limited options in regards to maneuvering its foreign policy amidst a growing US-China competition. Theoretically, the known strategies that states implement when faced with external threats have been the concepts of balancing and bandwagoning. The balancing option is employed by states when they have to preserve their security from a rising power or threat, and they do this by building alliances (external balancing) or mobilizing domestic capabilities (internal balancing) (Waltz 1979). When a state chooses to bandwagon, they do so when they accept a subordinate role with the threatening power for appeasement purposes or there is prospect to make use of the victory spoils (Walt 1987; Schweller 1994). During the Cold War, small states and/or authoritarian Third World states were mired in civil wars, where leadership/regime survival becomes paramount, and therefore these leaders or regimes would employ omnibalancing by bandwagoning with an external power in order to pull all the resources in balancing the more pressing internal threat (David 1991). Cambodia’s foreign policy behavior under Pol Pot fits the bill with omnibalancing, where China supported Pol Pot’s regime against his internal threats during the Democratic Kampuchea era.

However, for the most part, the balancing-bandwagoning strategic options were developed by scholars during the Cold War and do not originate from the Asia-Pacific region. David C. Kang (2003, 58) argues that most International Relations theory is adopted from the European experience and the subsequent application to Asia becomes questionable. Due to the absence of balancing in the post-Cold War era against the United States, scholars have developed strategic hedging with various aspects in the literature to explain not only the small states’ strategic behavior but also due to the shortcomings of other alternative strategies such as under-balancing and soft balancing (Schweller 2004; Pape 2005).

Especially with the growing US-China competition in the Asia-Pacific region, small states do not have a clear-cut position regarding a straightforward strategy to implement since balancing and bandwagoning requires a state to fully commit and choose one side over the other. Therefore, Southeast Asian states employ strategic hedging as a foreign policy option since they seek a middle course between the balancing-bandwagoning spectrum. Small states in Southeast Asia opt to maximize returns and minimize risk by combining elements of both balancing and bandwagoning since threat(s) is not definite and the ongoing order transition between the United States and China brings uncertainty in the post-Cold War era (Ciorciari and Haacke 2019).

Scholars have various conceptualizations in mind regarding strategic hedging and unpacking the definition is pertinent in order to adopt the appropriate framework for Cambodia’s foreign policy behavior and shift. Evelyn Goh (2005, 2) presents the traditional definition of strategic hedging as “a set of strategies aimed at avoiding (or planning for contingencies in) a situation in which states cannot decide upon more straightforward alternatives such as balancing, bandwagoning, or neutrality.” In other words, small states will avoid balancing or bandwagoning so they can maximize gains and evade dependence on great powers like the United States and China (Goh 2007/2008). Goh’s conceptualization is similar to Roy (2005) and Feng (2013) in that a small state will hedge by mixing indirect balancing and engagement via institutional platforms.

The next conceptualization of strategic hedging revolves around the mixed strategy that employs accommodation and engagement, along with balancing (Medeiros 2005; Roy 2005; Feng 2013; Tunsjø 2017). The point here is that small states hedge to avert geopolitical uncertainty becoming a full-fledged conflict by forging economic ties and security, and hedging occurs “under the normal condition of international relations short of imminent threats” (Hiep 2013, 337); although hedging can also occur during dangerous conflict settings, where negative balancing and economic engagement are employed (Kang and Kim 2017). According to Cheng-Chwee Kuik (2008), balancing is considered strategically unnecessary since the “China threat” is potential and provoking it will become a self-fulfilling prophesy, while bandwagoning for profit, albeit economically attractive, will subordinate states to a patron-client relationship with an assertive China that will decrease their autonomy. Therefore, small states will attempt to maintain balanced positional relationships by economically engaging with China and forming security ties with the United States (Medeiros 2005).

John Ciorciari (2010) expresses strategic hedging as a category of alignment, where he argues that small states will avoid formal alliances with great powers since that involve the problem of entrapment, abandonment, risks, and unwanted costs, and therefore they are engaging in “limited alignment.” By optimizing security risks, small states can maneuver without becoming dragged into unnecessary wars or conflicts, as well as strengthen their autonomy via limited alignment. Ciorciari’s (2019) strategic hedging concept encompasses a strategy that simultaneously maximizes utility and manages risk by seeking non-traditional alliance relations with great powers to reap material benefits and guarantee inexpensive security. Furthermore, some scholars believe that small states hedge not because they believe today’s risk will ultimately transmute into a future threat (Ciorciari and Haacke 2019), instead small states will send ambiguous signals about any potential alignment since the threat perception of great powers are low (Haacke 2019).

Theoretical Framework of Cambodia’s Foreign Policy: From Hedging to Bandwagoning

Strategic hedging itself is underdeveloped and scholars employ this umbrella term for various purposes, which leads to confusion. Therefore, the scope of this research is to specifically define the exact parameters of the policies that small states employ, as well as to differentiate from balancing and bandwagoning since these strategies are not feasible for small states under the escalating environment of the US-China competition where uncertainty is prevalent.

According to Kuik (2008), idea of “risks” is the crucial component to understanding the hedging behavior of a state, and risks can be categorized into the security, economic, and political realms. Furthermore, Kuik has formulated the most comprehensive conceptualization of hedging, and this research adopts Kuik’s (2008; 2016) power-response spectrum of light and heavy hedging. It is important for this research to adopt the power-response spectrum approach to strategic hedging since a state’s alignment decision is not based on one but a few options, and few existing studies have investigated the constituent options of states’ policy choices, i.e., “micro aspects of alignment behavior,” as well as the interplay between these options; also, these options can be mutually complementary or contradictory (Kuik 2016, 501).

The power-response spectrum is comprised of the multiple-component strategy situated between the balancing-bandwagoning spectrum, and it is measured by the degrees of rejection and acceptance, where balancing is the highest degree of power rejection, and bandwagoning is the highest degree of power acceptance (Kuik 2008; Kuik and Rozman 2015; Kuik 2016). The power-response spectrum is illustrated in Figure 1. Between the balancing-bandwagoning spectrum lies the hedging policy options, divided between risk-contingency options and returns-maximizing options (Ibid.). The risk-contingency options encompass the policies of indirect-balancing, dominance-denial, and economic-diversification; these options are known as “heavy hedging” (Ibid.). While the returns-maximizing options encompass limited-bandwagoning, binding-engagement, and economic-pragmatism; these options are designated as “light hedging” (Ibid.). Since Le Hong Hiep (2013, 337) argues that strategic hedging occurs “under the normal condition of international relations short of imminent threats,” balancing and bandwagoning are very unlikely pursued by states. Kuik (2008, 171) argues that light and heavy hedging components are a two-pronged approach, and it is two-pronged “because it operates by simultaneously pursuing two sets of mutually counteracting policies, which can be labeled as ‘return-maximizing’ and ‘risk-contingency’ options” and “[a] policy that focuses on merely return-maximizing without preparing for risk contingency—and vice versa—is not a hedging strategy.” Therefore, hedging is both a middle and opposite position between the return-maximizing and risk contingency options. According to Kuik (2016, 5), a small state such as Cambodia will hedge when three conditions are met: “(a) an insistence on not taking sides among competing powers (or, in the case of big powers, not fully aligning ones’ own interest and support with another power); (b) the practice of adopting opposite and counteracting measures; and (c) the use of the opposite acts as instruments to pursue the goals of preserving gains while cultivating a ‘fallback’ position.”

Although many small states in Southeast Asia are hedging, Cambodia’s strategic hedging involves certain characteristics and patterns that are distinct from those states. Most small states in the region adopted the hedging strategy, primarily in the security realm with the United States while economically engaging with China. However, there is uncertainty whether ASEAN as a collective unit will deter a possible attack, unlike the collective response of the NATO when one of its members is faced with aggression. The doubt of security insurance by the ASEAN cannot guarantee survival; therefore, states opt to seek alternative security arrangements from great powers. For example, Vietnam allowed the US Navy access to its ports, and the United States has provided funds and naval capabilities equipments to Vietnam (Tu and Nguyen 2019), and hard balancing is incorporated in Vietnam’s hedging strategy (Hiep 2013). Regarding Cambodia’s foreign policy behavior, this research shows how the internal factors significantly contribute to Cambodia’s strategic hedging during the period of 2010 to 2017. Hun Sen’s Cambodian People’s Party (CPP) is pro-China while Kem Sokha’s Cambodia National Rescue Party (CNRP) is pro-US. These two rival factions contribute and influence Cambodia’s hedging policy between the United States and China, which therein implements the dual-pronged approach of utilizing both return-maximization and risk-contingency options of Kuik’s strategic hedging model without resorting to either traditional balancing or bandwagoning. When the CNRP was banned from political activity in 2017, Hun Sen’s CPP then shifted Cambodia’s foreign policy of strategic hedging to bandwagoning with China due to regime survival, changing domestic political dynamics, and the perceived US’ criticism and interference of Cambodia’s internal affairs. Thus, from 2017, Cambodia exhibited behavior of siding with China and not following the practice of adopting opposite measures that constitute strategic hedging. Figure 2 shows the pathway of Cambodia’s strategic hedging policy, where the varying risks and returns associated with the US-China competition primarily influence Cambodia’s political dynamics, along with other exogenous variables of the economic and security dynamics. Interaction of these endogenous and exogenous variables has influenced Cambodia’s adoption of the strategic hedging policy. Figure 3 summarizes how the varying risks and returns associated with the US-China competition has influenced Cambodia’s political dynamics, along with other exogenous variables of the economic and security dynamics, which in turn has influenced Cambodia adopting the bandwagoning with China.

CAMBODIA BETWEEN THE US-CHINA COMPETITION (2010-2017)

Policies of the United States and China toward Southeast Asia and Cambodia

According to Joshua Kurlantzick (2015), during President Barack Obama’s first term, the United States started to overhaul and recalibrate its relationship with Southeast Asia by focusing its strategic attention to growing China by rebalancing its foreign policy focus or “pivot.” The Obama administration had also improved regional security partnerships, followed through commitments to send high-level officials to regional meetings in Southeast Asia, and increased port calls to and basing combat ships in the area. The United States also improved diplomatic ties with a wide range of Asian countries, recommended sending senior US officials attending important Asian regional meetings, and a revival of US attempts to forge a regional East Asian trade agreement. Throughout the Obama administration, Cambodia-US relations were incrementally improved. The US Navy started to visit the port of Sihanoukville and two countries held joint military drills (Lum 2013). The United States also provided training for the Cambodian force to strengthen Cambodia's military (Kurlantzick 2015).

The year of 2010 marked the 60th anniversary of the Cambodia-US diplomatic relations. On that occasion, US President Barack Obama sent a letter to Cambodian King Norodom Sihamoni to congratulate and reflect on the overall growth of their bilateral relations. On November 19, 2012, it was the first time in Cambodian history to welcome its first visit of the US presidency. President Obama traveled from Myanmar to Cambodia to attend the US-ASEAN Summit and East Asia Summit (EAS). During that time, Obama had a brief but “tense” meeting with Cambodian Prime Minister Hun Sen, in which he insisted on addressing human rights issues, the release of political prisoners, and free and fair elections (Spetalnick 2012). This meeting ended without an agreement but it boosted Cambodia's legitimacy on the international stage and earned recognition from various world leaders. In 2012, there was a meeting between Defense Secretary Leon Panetta with Cambodian Defense Minister Tea Banh; it was also considered a rare meeting of a top US official in Cambodia (Bumiller 2012). Many other prominent US officials visited Cambodia besides President Barack Obama, including then-House Democratic Minority Leader Nancy Pelosi in 2015, First Lady Michelle Obama in 2015, and Secretary of State John Kerry in 2016. During this period, the United States took steps to broaden engagement with Cambodia to respond to China’s growing diplomatic and economic influence in Cambodia.

Since 2007 China has also exerted significant efforts to increase its influence in Southeast Asia and Cambodia in terms of the economic, political, and security dimensions. The ‘Belt and Road Initiative (BRI)’ is by far the most noteworthy of these efforts. Xi Jinping first signaled his intent to create BRI in twin speeches in Kazakhstan and Indonesia in September and October 2013 respectively. He formally launched the initiative by inviting twenty-nine heads of state, other officials from 130 countries, and 70 international organizations to Beijing for the inaugural Belt and Road Forum on May 14–15, 2017. The BRI and Asian Infrastructure Investment Bank (AIIB) are indicative of China’s ambitious activities in its Asian periphery. By 2017, most Southeast Asian states, including Cambodia, pulled by Beijing, had fallen into China's increasing geoeconomic, geopolitical, and geostrategic orbits (Shambaugh 2018).

Cambodia’s Response: Strategic Hedging

Policy of Limited Bandwagoning

During this period, Cambodia tried to adopt a hedging foreign policy to balance relations between the United States and China by supporting the China-led Lancang-Mekong Cooperation (LMC) grouping. Simultaneously, Cambodia also participated in the Lower Mekong Initiative (LMI), led by the United States, a decade-long partnership to advance sustainable economic growth in the region. The LMI, founded in 2009, eventually became a regional rival to the China-led LMC grouping, which was one of the Obama Administration’s policies in the region under the Pivot to Asia strategy. During this period, Cambodia had tried to bolster relations with both the United States and China. Cambodia’s politics, economic, and military ties with both powers also remained mature. Although Cambodia’s implementation of its limited bandwagoning with the United States through the cooperative engagement with LMI fostered internal stability and cordial bilateral relations, that began to unravel in 2012.

When Cambodia suppressed domestic oppositions, it politically distanced itself from the US. On June 2012, when Cambodian Foreign Minister Hor Namhong participated in a meeting in Washington DC, Secretary Hillary Clinton pressed for the release of 13 residents of Boeung Kak Lake who had been arrested for protests against a CPP development firm (Worrell and Khout 2012). By November 19, 2012, President Obama became the first sitting US leader to visit Cambodia to attend the US-ASEAN Summit and the EAS where he pressed on human rights issues, democratic reforms, and release of political prisoners to no avail (Spetalnick 2012). However, Cambodia had to dial back its limited bandwagoning strategy with the United States due to international pressure over the expulsion of 27 opposition legislators from the National Assembly and the disqualification of exiled CNRP president Sam Rainsy from running for office in late 2012. Furthermore, by July 2013, the CPP lost 22 seats in the National Assembly, whereas the CNRP gained 55 seats. The continuing gridlock between both parties resulted in implementing compromises, where the political stalemate spurred nationwide protest against the CPP. The United States recognized and legitimized the electoral result, however, for the CPP the stunning success for the CNRP meant that the US was behind the undermining of the CPP.

Up until 2017, Cambodia had two major parties: the CPP, which won 68 seats, and the opposition CNRP, which received 55 seats out of 125 in the parliament (Thul 2018). These two major political parties have conflicting goal priorities when it comes to foreign policy. This political dynamic is becoming more fragile and vulnerable, especially in the context of growing geopolitical rivalry between major powers in the Asia-Pacific region (Chheang and Kung 2014). The ruling party CPP is pro-China and CNRP is pro-US. In 2012, the United States pressured the Cambodian government to pave the way for CNRP leader Sam Rainsy’s pardon by the King to permit him to return home nine days before the election after being imprisoned absentia and resided in France in 2010 (Nawaz 2013). CNRP had a political tendency to support the US’ democratic initiatives, promote human rights, and anti-corruption. CNRP attempted to move Cambodia away from China’s influence and bolster relationships with the United States and Western countries. In contrast, the ruling party supports China. As David Shambaugh (2020, 205) remarked “China’s ties to Cambodia depend on Prime Minister Hun Sen. Cambodia’s relationship with China is more than bandwagoning; it should be described as a full-blown Chinese Client state.” It is evident that both ruling and opposition parties have positioned themselves between China and the United States for their political objectives.

Furthermore, Rainsy accused China of colonizing Cambodia and causing insecurity in Southeast Asia (The Cambodia Daily 2020). He also added that he would reject illegal contracts signed by the Cambodian government with China regarding military and financial issues when he comes to power. He continued that Hun Sen’s government allowed Beijing to build infrastructure facilities that could be turned into military bases in Cambodia. However, the Cambodian government has repeatedly rejected reports that China had reached a secret deal to build a military base at the Ream Naval Base site, saying that hosting foreign forces would be against Cambodia’s constitution (Thul 2020).

The political dimension was one factor that influenced Cambodia to adopt a hedging foreign policy by balancing its relationship with both the United States and China since the ruling party and the main opposition party had a similar power and voice in parliament. After finishing the national election, these two powers reached a power-sharing agreement. CNRP deputy Kem Sokha would become the first Vice President of the parliament. Sam Rainsy, who had not been disqualified from running for political office since 2012, would be able to take a seat in the Assembly. Moreover, the chairmanships of parliamentary commissions and the National Election Committee of Cambodia would be equally shared between the CPP and the CNRP. Not only political leaders have different perspectives related to China, but also general Cambodian citizens have considered China differently (Pheakdey 2012). One group thought China is the leading developed partner of Cambodia because China is the primary source of FDI and the biggest donor of Cambodia. In contrast, other groups thought that China’s investment in Cambodia had exacerbated corruption, as well as deteriorated governance and human rights.

Regards to China, Cambodia employs the returns-maximizing option of limited bandwagoning in its political dimension. There is a cluster of foreign policy issues and priorities that compel Cambodia to implement limited bandwagoning with China in the first place. At the regional level, Cambodia was bombarded with criticism over constructions of Chinese dams in the Mekong River basin, which critics claimed would sabotage fishery and restrain water supply level for countries like Vietnam and Thailand; however, Cambodia simply played down these concerns and advised its officials to avoid any objections about China’s Mekong River basin activities in regional forums (Ciorciari 2015). Therefore, in 2010, Cambodia and China enhanced their bilateral ties to a “Comprehensive Strategic Partnership of Cooperation,” which is the highest level of diplomatic relations that Cambodia bestows to a foreign country during then China’s President Hu Jintao’s visit (Thayer 2013a).

Cambodia’s limited bandwagoning with China was in full display regarding its position during the 2012 ASEAN summit. The South China Sea dispute was a thorny issue for all sides involved, and as chair country, Cambodia blocked member states of the Philippines and Vietnam, as claimants to the South China Sea, of pursuing a unified front toward China’s violation of the United Nations Convention of the Law of the Sea. Cambodia initiated the prevention by citing “lack of consensus” as well as aggressive stances by shutting down the Philippines’ and Vietnam’s proposals and leaking draft statements to China (Ciorciari 2015). Cambodia’s limited bandwagoning stance is due to the CPP needing China’s support during the upcoming 2013 general elections with the surging CNRP becoming a threat to the CPP. Another factor that necessitates Cambodia’s yield is due to China’s gravitas of the South China Sea as its vital interest, and Cambodia needed to display its obligation to China at the summit for receiving past assistance and to lock in future support from Beijing. Not to mention, when the Philippines and Vietnam pursued dominance denial against China by advocating the South China Sea dispute at the negotiating table between ASEAN member states, Cambodia doubled down by claiming that ASEAN is not a court and that the issue should be a bilateral concern (O’Neill 2018). Cambodia further supported China’s rejection of the Permanent Court of Arbitration’s (PCA) ruling in favor of the Philippines in July 2016, stressing that the decision was “the worst political collusion in the framework of international politics” (China Daily 2016).

Policy of Dominance Denial

To prevent political overdependence on the United States and China, Cambodia implements the risk-contingency option of dominance denial. Japan serves as Cambodia’s hedging policy due to their long and close strategic relationship. Following the 1991 Paris Peace Agreements, Japan not only financed a significant proportion of the United Nations Transitional Authority in Cambodia mission, but deployed 608 ground troops, 75 civilian police, and 41 polling station officers to maintain peace in Cambodia up until 1993 (Takeda 1998). Unlike the West, Japan chose to not condemn Hun Sen following the power struggle between the CPP and the National United Front for an Independent, Neutral, Peaceful and Cooperative Cambodia in July 1997, in which the gradual growing relations resulted in Cambodia upgrading its ties with Japan to the level of strategic partnership due to China announcing its Air Defense Identification Zone (ADIZ) over the East China Sea in 2013.

Cambodia hedging its bets toward Japan is due to several reasons. First, unlike the United States, Japan does not openly criticize Cambodia’s human rights and democracy record (Leang 2017). Second, although Cambodia has strong ties with China, there is lingering mistrust between the two due to the past support by Beijing toward the Khmer Rouge, and the subsequent silence from China regarding the CPP’s poor performance in the 2013 electoral result and nationwide protest that followed (Ciorciari 2015). Another aspect that showcases Cambodia’s dominance denial toward China is by bolstering its commitment to Japan’s regional positions, where Cambodia endorsed ASEAN’s joint communiqué with Japan that highlights the freedom of flight after China made the ADIZ announcement over the East China Sea (Leang 2017).

Policies of Economic Pragmatism and Diversification

Since 1997, Cambodia has been a recipient of the Generalized System of Preferences (GSP). Cambodia is eligible for duty-free exports to the United States of nearly 5,000 qualified GSP products. Under this duty-free program, Cambodia exported almost \$ 179 million to the United States in 2016. One of Cambodia’s notable GSP success stories is bicycles. Since 2009, the US imports of bicycles from Cambodia have increased more than tenfold, amounting to \$20.3 million in 2015, with 88 percent of those imports entering GSP (Froman 2016). Cambodia is now the third-largest source of US bicycle imports. Hedging policy of economic pragmatism enables Cambodia to receive GSP to increase Cambodia’s economic growth.

Table 1 shows that Cambodia has benefited a lot from trading with the United States by adopting economic pragmatism, in which the Kingdom could not afford to lose out in the US market. Cambodia’s exports to the United States grew from \$2.30 billion in 2010 to \$3.02 billion in 2015. Meanwhile, US exports to Cambodia grew almost threefold, from \$153.8 million in 2010 to \$391.1 million in 2015. In 2016, the United States was the biggest Cambodia export market partner, with a 21.32 percent share, followed by the United Kingdom (9.47%), Germany (8.98%), Japan (8.21%), and Canada (6.50%) (World Integrated Trade Solution, n.d.). The US trade with Cambodia also created job opportunities for the Cambodian people; about 600 apparel factories in the Kingdom employ approximately 400,000 employees. Therefore, disruption of bilateral trade may pose harmful challenges to Cambodia’s economy and lead to social instability. Economic pragmatism also enabled Cambodia to receive aid from the United States. From 2010-2016, the United States assisted Cambodia with more than \$579 million as shown in Table 2.

The returns-maximizing hedging policy of economic pragmatism enables Cambodia to receive a considerable share of China’s FDI. China is the largest source of FDI, with \$5.3 billion in cumulative funds or around \$1 billion annually from 2013 to 2017 (Lum 2013). Cambodia is one of the top twenty recipient countries that secured Chinese FDI in 2010, and soon after, Cambodia improved its position among the top ten (O’Neill 2014). Chinese investment in Cambodia amounted to \$8.9 billion at the end of 2011, spread over 317 projects (Sothirak, Wade, and Hong 2012). In 2013, Chinese FDI in Cambodia was \$9.6 billion, while US investment was only \$1.3 billion. China still maintained its position as a significant FDI provider in Cambodia by the end of 2014 with stakes worth 44 percent or \$8.4 billion. From 1994 until 2016, China has become Cambodia’s most important FDI source with an aggregate investment of \$14 billion (Manet 2016). However, it is worth noting that Cambodia’s trade with China continued with a growing deficit from 2010-2016 as shown in Table 3.

Foreign aid is also one of the economic factors that motivated Cambodia to apply economic pragmatism. Cambodia is one of the developing world’s most aid-dependent countries, which received more than 75 percent of its budget from external assistance alone between 1997 and 2008 (Chanboreth and Hach 2008). Therefore, Cambodia has tried to adopt a hedging foreign policy in order to receive foreign aid from both the United States and China. In 2016, Cambodia received \$729 million of official development assistance (ODA) (The World Bank 2017). The large-scale ODA and FDI contributed to Cambodia’s GDP growth rate. From 1994-2017, Cambodia maintained an average growth rate of about 7 percent, ranking sixth in the world among the highest GDP growth rates.

As a significant donor, China pledged to provide Cambodia \$1 billion in 2010. In 2012, Chinese President Hu Jintao offered \$70 million in aid and \$430 million in loans respectively, while US assistance accounted for \$76 million for that same year (Lum 2013). Beijing stepped in with \$500 million in soft loans and grants after Cambodia blocked comments made by the Philippines and Vietnam on the South China Sea at the 2012 ASEAN summit (Thul 2012). In 2013, China provided \$548 million in infrastructure grants. Three years later, Chinese President Xi Jinping rendered further assistance in the form of soft loans of \$237 million and canceled \$89 million of debt (Lin 2018). China gave \$600 million in aid following Cambodia's support for its rejection of the PCA in the South China Sea Arbitration ruling in July 2016.

One of Cambodia’s risk-contingency options is economic diversification, a hedging policy that allows Cambodia to construct economic networks with other external powers in order to minimize economic risks of dependence on the United States and China by diversifying its economic portfolio, expand the number of trade partners, and to attract more FDI. The European Union (EU) serves as one of the most crucial key players for Cambodia other than the aforementioned powers in the United States, China, and Japan. By economically diversifying, the EU as a sole entity has become Cambodia’s largest export destination. Since 2001, the EU has granted Cambodia with Everything But Arms (EBA) preferential trade status. The EBA is a duty-free and quota-free access to the EU market, where under such scheme Cambodia is allowed to export all products besides weapons.

According to Table 4 below, Cambodia’s exports to the EU increased from \$1.12 billion in 2010 to \$5.12 billion in 2016. Exports to the EU far outweigh imports from the EU, which maintained a constant trade surplus that grew annually, which necessitates Cambodia’s economic diversification as its hedging strategy. The rationale for economic diversification by incorporating the EU serves Cambodia to not be over dependent with the United States, China, and Japan. Furthermore, when the CNRP staged a massive protest after the 2013 election, dissatisfaction among factory workers escalated the violent demonstration, that is why the CPP government has maintained to supply millions of jobs to counteract potential anti-government opposition, where many workers tend to support opposition parties such as the CNRP.

Policy of Indirect Balancing

During the entire period of the Obama administration, Cambodia-US military relations strengthened, which included military cooperation, US naval port visits, military assistance and training, and joint military exercises. The Cambodia-US launched Angkor Sentinel, an annual bilateral exercise held in Cambodia that aims to maintain international humanitarian aid and strengthen military cooperation. The Cambodian and American navies have also begun a joint maritime security exercise known as Cooperation Afloat Readiness and Training (CARAT). US military officials have expressed a desire for more cooperation with the Royal Cambodian Armed Forces (RCAF). Military personnel from the United States and Cambodia have been collaborating in bilateral and multilateral exercises since 2010. The USS Blue Ridge paid a visit to Sihanoukville of Cambodia in 2012. Naval officers reportedly discussed joint drills, coastal defense, exploration and rescue, and other activities from both sides. For the third year in a row, the US and Cambodian naval forces engaged in CARAT. In Kampong Speu, Cambodia, the third annual Angkor Sentinel bilateral peacekeeping exercise took place in March 2013 (Lum 2013). Furthermore, US Navy vessels made four port visits, which included the USS Tortuga in 2010, USS Stockdale in 2011, the USS Germantown in 2016, and the hospital ship USNS Mercy conducted a 10-day program of medical checkups for nearly 30,000 Cambodians in 2010 (U.S. Embassy in Cambodia 2010).

From the 2010s, Cambodia-China military cooperation was strengthening. China has continued playing as Cambodia’s security confidence builder since the 1990s. China has increased its military cooperation with the RCAF by providing loans and military equipment such as aircraft, vehicles, helicopters, building military training, medical facilities, and donating uniforms. Beijing stepped in with 257 tanks, 50,000 military uniforms, 1,000 handguns, and 50,000 bullets for its national police in 2009 (Kung 2014). By next year, China offered a \$195 million loan for the procurement of 12 Harbin Z-9 helicopters and two dozen pilots and mechanics training (Thayer 2013b). In 2012, Cambodia and China signed military deals worth \$17 million to allow the Cambodian military to get training and receive colossal Chinese donations such as military equipment, coaches, and Chinese language instruction (Ibid.). In 2014, China’s military capacity-building program for Cambodia had been expanded to include over 400 scholarships for Cambodian military officers to study in China (Sokheng 2014). Also, China equipped Cambodia with nine patrol boats, the modernization of the Ream naval base, and the provision of \$60 million patrol boats by the Chinese. Based on geopolitics and China’s rise, Cambodia considers China as a reliable friend to serve as a powerful check against its neighbor’s aggression via its indirect balancing policy.

Policy of Binding Engagement

According to Kuik (2016), binding engagement is a profit-maximization policy that is “designed to maximize diplomatic benefits by engaging and binding a big power in various institutionalized bilateral and multilateral platforms, for the functions of creating channels of communication and increasing the status-quo tendency of the power’s behavior.” Furthermore, binding engagement intends to simultaneously safeguard the hedging state’s autonomy and to avoid the pressures of unwanted alignment/alliance. Cambodia utilizes binding engagement by enmeshing the United States and China through a regional multilateral institution through the ASEAN. Cambodia works with other ASEAN member states in concert to shape the United States and China’s behaviors through the multilateral agenda.

First, ASEAN’s ties with the United States impacts Cambodia’s foreign policy. Cambodia is an active member of ASEAN Defence Minister’s Meeting Plus (ADMM-Plus), where the United States is a dialogue partner, and ADMM-Plus is a multilateral forum that boosts security and defense cooperation. The ADMM-Plus’ areas of focus include maritime security, counter-terrorism, humanitarian assistance and disaster management, peacekeeping operations, military medicine, humanitarian mine action, and cyber security (ADMM 2017). In November 2012, Cambodia hosted US President Barack Obama for the 7th East Asia Summit, where the US presence was both critical and reassuring due to the high tensions between ASEAN and China (Bower 2012). In like fashion, Hun Sen embarked on a special summit with nine other ASEAN leaders with Obama on February 2016. This was the first US-ASEAN summit held on US soil, which signified the US engagement to deepen its ties with Southeast Asia.

CAMBODIA BETWEEN THE US-CHINA COMPETITION (2017-2020)

The Waning US Influence in Cambodia

Cambodia’s relationship with the United States started to dwindle again after Donald Trump became president and changed US policy to “America first.” The United States transmuted its view on Cambodia from prioritizing rebuilding relations with Cambodia to not considering it on par with other states. Under President Trump, the United States largely ignored Asia in general, specifically Cambodia. His first four months of his term passed without a single meeting or telephone conversation with a Southeast Asian leader. However, during the same period, he had fifteen phone conversations with heads of state from the Middle East, fourteen from Europe, seven from Latin America, six from Northeast Asia, three from Africa, two from North America, two from Oceania, and one from South Asia (Cook and Storey 2017).

Trump’s action on his third day in office to withdraw from the Trans-Pacific Partnership (TPP) sent shock waves throughout Asia as well as Cambodia. Even though Cambodia was not a member of TPP, TPP was considered the primary economic component of Obama’s “Pivot to Asia” regional strategy. Trump’s withdrawal profoundly damaged the US’ reputation, and credibility throughout the region was conferred upon China. Moreover, Trump’s “America First” rhetoric was highly controversial as it led to the widespread perception of an isolationist America that would unilaterally cede China’s strategic ground (Vasagar 2017). The Lee Kuan Yew School of Public Policy echoed this growing sentiment, “We know that China will be our neighbor in 1000 years. But we don’t know if the Americans will be here in 100 years” (Shambaugh 2018, 109).

The changing of the US foreign policy from “Pivot to Asia” to “America First” motivated Cambodia to alter its foreign policy. Cambodia moved its foreign policy from hedging to bandwagoning with China. Evidently, the Cambodian government abruptly suspended all military exchanges established during the Obama administration in early 2017 (Shambaugh 2020). However, Cambodia continued to carry out its third Golden Dragon joint military exercises with China. By the time Obama left office in January 2017, the US position in Cambodia had never been stronger. The United States proceeded to criticize and impose economic sanctions on Cambodia. Cambodia-US relations deteriorated because Cambodia considered the US’ criticism as a subversion of Cambodia’s sovereignty. Unlike the United States, China never interferes in Cambodia’s internal affairs, where Cambodia-China relations continue to deepen without fluctuation. On March 2018, Cambodia’s Prime Minister Hun Sen said, “The Chinese leader respects me highly and treats me as an equal. Let me ask those of you who have accused me of being too close to China . . .What have you offered me besides cursing and disciplining me and threatening to put sanctions on me” (Beech 2018).

The United States imposed pressure on Cambodia regarding China’s involvement in constructing and accessing a naval base at Ream, located about 12 miles south of Sihanoukville in 2018. However, Cambodian and Chinese officials denied it. Cambodian Prime Minister Hun Sen pushed back directly on the notion that the Chinese government had or would be receiving exclusive rights to have its military access facilities on his country’s soil (Panda 2020). Some scholars argued that Beijing might be preparing to establish a broader security infrastructure in the region, starting with Cambodia, despite Chinese and Cambodian denials. Long-term military intentions may overshadow its claims of relatively benign activity during its early stages.

Since 2017, Cambodia-US relations have declined. Cambodia disagreed with the United States decision to deport Cambodians who had fled the country during the civil war in the 1970s. Cambodia claimed that these people had already completed sentences in US jails. It would be a double penalty for them to be indefinitely taken away from their families in the United States to a nation they hardly recognize and whose language they barely comprehend. Deportation rose by 279 percent in the first two years of the Trump administration, and an additional 1,855 people were facing impending deportation to Cambodia by 2019 (Dunst 2019). The US government imposed restricted visa penalties on its foreign ministry officials following Cambodia’s refusal to continue this repatriation scheme (Boyle and Kann 2018).

The Increase of China’s Influence in Cambodia

As Cambodia’s relations with the United States reached a nadir in recent memory, Cambodia implemented a bandwagoning strategy with China. Cambodian leaders, including King Norodom Sihamoni, expressed support for the BRI (Reaksmey 2019). Cambodia is also a founding member of the AIIB, established in December 2015 and headed by China. Among some observers, AIIB has raised concerns about whether it is part of China’s global strategy to compete with the US-dominated World Bank and the Japanese-led Asian Development Bank (Runde et al. 2015). Cambodia has actively engaged in China’s BRI for the economic development opportunities generated from this project. The influx of Chinese cash from Beijing’s BRI allows Cambodia to construct two new airports in Phnom Penh and Siem Reap, where the projects are worth more than \$2 billion (Turton 2020). More than \$7.5 billion in hydropower plants and about \$4 billion in coal power plants have been invested in the energy sector (Phea 2020).

As Cambodia’s leading economic benefactor, China has near ubiquitous economic influence in Cambodia. Nearly half of Cambodia’s external debt is owed to China. China is the largest FDI with a cumulative stock of approximately \$15 billion. China’s investment involved a wide range of projects: infrastructure, agriculture, industries, energy, telecommunication, service, tourism, education, and media. Some of the more noteworthy projects led by Chinese firms are the new international airport, national long-distance highways (national roads 6,57,58,59,76), the Vaico irrigation network, a national electrical grid, seven dams across the Mekong river, and most of the construction in Phnom Penh of high-sky buildings, office blocks, private apartments, parks, streets, and bridges (Shambaugh 2020).

The Chinese dominate the southern seaside port of Sihanoukville. China built a \$2 billion four-lane highway in Sihanoukville with Phnom Penh. One study found that 150 of 156 hotels, 414 of the 436 restaurants, 48 of the 62 casinos, 41 karaoke clubs, and 46 massage parlors are Chinese owned in Sihanoukville (The ASEAN Post 2020).The first half of 2018 had Chinese citizens outnumbering other foreign nationals in Cambodia. Chinese tourism increased more than 700 percent between 2012 to 2017, with Chinese tourists comprising of one-third of the 6.2 million visitors Cambodia received (The ASEAN Post 2019).

Cambodia’s Response: Bandwagoning

From 2017, Cambodia underwent a domestic political transition after the top court dissolved the country’s main opposition party CNRP. The Supreme Court of Cambodia disbanded the country’s largest opposition party that was pro-US on November 16, 2017, and issued a five-year ban to effectively prohibit 118 CNRP members from involvement in any political activity (Chheng 2019). The issuance of the ruling was followed by the arrest of the CNRP leader, Kem Sokha, on charges of conspiracy by his party to overthrow the current government with the US government’s assistance (Wallace 2017). In response, US Ambassador William A. Heidt denied the claims of conspiracy with the CNRP by the government, calling them “baseless” and demanded for the opposition leader’s release (Thul 2017). After the dissolution of the CNRP, the ruling party won all 125 seats in the National Assembly in 2018 (Bhattacharjee 2018).Therefore, under the Trump administration, the United States imposed a mountain of economic sanctions and punitive actions against Cambodia in the hopes of countering China’s power, discouraging its animosity toward the United States, raising the profile of declining political and human rights, and dropping criminal charges against opposition leaders. Trump also argued that the election failed to represent the will of the Cambodian people and was the most significant setback to the democratic system enshrined in Cambodia’s constitution (The White House 2018). China stood firmly behind Cambodia, implying that the election in 2018 would be “fair,” even though no credible opposition was allowed to compete openly against the CPP (Martina 2018).

With the dissolution of the main opposition party, the US Senate approved to urge the Treasury Department to consider blocking senior Cambodian government officials’ properties due to the suppression of democracy and human rights violations. In December 2017, the Trump administration restricted individuals who were involved in undermining democracy in Cambodia to entry into the United States (Walsh and Thul 2017). From June 2018 to December 2019, the US Treasury Department imposed the sanction of three allies of Cambodian Prime Minister Hun Sen, including the commander of his bodyguard unit, General Hing Bun Hieng, for human rights violations under the Global Magnitsky Act. The sanctioned persons are refused entry to the United States, and any properties they own in the United States are blocked. US officials suspect Cambodia offers the Ream Naval Base to China as its maritime policy of China’s String of Pearls to secure Chinese sea lines between the Pacific and Indian oceans. Cambodia’s limited bandwagoning policy toward the United States has deteriorated dramatically.

It is important to note that Cambodia adopted hedging in the early 2010s and shifted to bandwagoning with China after dissolving the main opposition party. As clear evidence, while Cambodia-US relations were declining, Cambodia-China relations became closer. In 2018, China tried to strengthen and broaden its ties with Cambodia by upgrading its bilateral relationship to a “Comprehensive Strategic Cooperative Partnership,” which is the highest level of diplomatic relations between Cambodia and a foreign nation (Shambaugh 2020). In April 2019, the two countries agreed to raise their bilateral relations by signing the “Action Plan 2019-2023 on Building China-Cambodia Community of Shared Future” (Phea 2020). Cambodia strongly supports China on some critical issues. In early 2017, Cambodia supported the “One China Policy” by refusing to allow the Taiwanese flag to be displayed anywhere in Cambodia. Cambodia was the first nation in Southeast Asia to issue an official statement on the political turmoil in Hong Kong, expressing its unbreakable support of Beijing (Tiezzi 2020). In February 2020, Cambodia Prime Minister Hun Sen was the first foreign leader who traveled to Beijing at the height of China’s war against COVID-19, and met with Chinese leaders to provide verbal support for China (Ibid.). Hun Sen’s actions display Cambodia’s political posture of being pro-China and a long-term supporter of China even during the crisis. Cambodia did not ban China’s flights during the COVID-19 outbreak; in contrast, Cambodia refused flights from six countries: the United States, France, Germany, Iran, Italy, and Spain.

Cambodia started to distance itself from the United States and move its economy closer to China after the internal economic change. In November 2017, under the Trump administration, the United States withdrew \$1.8 million in aid from the National Election Committee (Dara and Reddick 2017). The United States provided \$79.3 million in foreign aid to Cambodia in 2018, which is a 10% decrease from the previous year, and the Trump administration reduced 75% of annual assistance for 2019 (Lum 2019). On December 31, 2020, the United States postponed to revalidate GSP program to Cambodia (Kunmakara 2021). Cambodia has benefited from the GSP scheme since 1997, with a total value of \$850 million in duty-free exports, while Cambodia’s travel-product exports to the United States jumped from \$50 million to \$1 billion in 2019 under the GSP scheme (Vantha and Sopheavotey 2021).

Cambodia’s security relations with the United States began to sour as well. Cambodia made the decision to cancel the Angkor Sentinel bilateral exercise in January 2017, attributing to the war on drugs and upcoming election (Cheang 2017). Furthermore, Cambodia, without any prior notice, canceled the US Navy Mobile Construction Battalion’s humanitarian program a few months after the cancelation of the Angkor Sentinel (Hunt 2019). This unilateral decision from Cambodia caused the United States alarm since this comes from the backdrop of the first ever joint naval drill between Cambodia and China in 2018, where Beijing provided lucrative contracts for training, vehicles, and Chinese-made weapons (Hunt 2019). With the deterioration of US-Cambodia relations starting from 2017, Cambodia’s security has become more dependent on China. China’s influence in Cambodia’s military and security has increased dramatically. China supports Cambodia’s defense by funding small arms, vehicles, tanks, helicopters, and aircraft as part of the PRC’s military aid to Cambodia. China has also sponsored training and military instruction and funded exchanges of senior military leadership. In 2018 and 2019, China officially supported Cambodia with a total of almost \$200 million in military funding. China and Cambodia have conducted four annual Golden Dragon joint military exercises, including one in March 2020, despite the COVID-19 pandemic. The Golden Dragon exercise in March 2020 was held for two weeks, where 3000 troops from China and Cambodia reportedly focused on counterterrorism and humanitarian operations (Eckert 2020).

CONCLUSION

This research suggests that Cambodia’s foreign policy is not always monolithic and fixed. The findings indicate that changes in Cambodia’s foreign policy toward the United States and China has been significantly galvanized by internal factors in regards to its domestic political dynamics, along with other exogenous variables of the economic, security, and diplomatic dimensions. Most scholars assume that Cambodia’s relationship with China falls under the patron-client relations or consistently bandwagons. However, external factors cannot account for why Cambodia altered its foreign policy, but internal factors played a significant role in such flux. Internal factors have not always been stable in Cambodia, where the CPP dissolved the main opposition party in the CNRP, thus having different foreign policy approaches. This research adopted and applied the returns-maximizing and risk-contingency options of the strategic hedging model to demonstrate Cambodia’s foreign policy shift from hedging to bandwagoning. Cambodia implemented limited bandwagoning, economic pragmatism, and indirect balancing toward both the United States and China. To avoid over-dependence on two great powers, Cambodia implemented the policy of dominance denial with strengthening ties with Japan, economic diversification with the EU, and binding engagement with the ASEAN.

Up until 2017, Cambodia adopted a hedging foreign policy between the United States and China to optimize political, economic, security, and diplomatic support. During this period, Cambodia’s political relations with both of them were mature. The United States and China almost equally contributed to Cambodia’s economic growth. The United States was Cambodia’s biggest clothing purchaser, constituting a lucrative economic market. China was Cambodia’s largest FDI and loan provider. Cambodia also tried to balance its military relations by conducting military exercises with both great powers. Cambodia simultaneously supported the China-led Lancang-Mekong Cooperation and the US-led Lower Mekong Initiative. Cambodia-US relations started to decline after Cambodia’s internal political factors saw a shift following the elimination of the main opposition party of CNRP, which was pro-US, and a threat to Prime Minister Hen Sen’s regime survival. The perceived US’ criticism and interference of Cambodia’s internal affairs, along with the change in domestic political dynamics caused Cambodia to realign its foreign policy by bandwagoning with China. The elimination of the main opposition party led the United States and EU to level considerable criticism and impose political pressure and economic sanctions on Cambodia. Relations soured further when the United States changed its foreign policy from Pivot to Asia to American First. As a result, Cambodia had no better option than making its economy more dependent on China’s BRI and AIIB.

Figures
Fig. 1. Power Rejection/Acceptance Spectrum
Fig. 2. Cambodia’s Strategic Hedging Pathway
Fig. 3. Cambodia’s Bandwagoning with China Pathway
Tables
Table. 1. Cambodia’s Trade with the US, 2010-2016
Table. 2. US aid to Cambodia, 2010-2016
Table. 3. Cambodia’s Trade with China, 2010-2016
Table. 4. Cambodia’s Trade with the European Union, 2010-2016
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