Hun Sen has a ‘One China’ dilemma

Cambodian Prime Minister Hun Sen reaffirmed last month that his government fully supports Beijing’s ‘One China’ policy, a diplomatic nod to the notion that Taiwan is a breakaway Chinese province rather than an independent state.

“Taiwan is only a province of China…We allow Taiwanese companies to do business in Cambodia, but no Taiwanese flag will ever be flown here,” Hun Sen said, referring to the government’s decision in 2017 to formally ban Taiwan’s standard from flying in the country.

Doing so, the leader said, “would be just like recognizing Taiwan’s independence.” Most Cambodian official ministerial documents refer to Taiwan as a “province of China.” Such high-level comments are intended to please policymakers in China, now Cambodia’s closest ally and larger provider of aid and investment.

In recent years, Beijing has tried to further isolate Taiwan within the international community, while making increasingly hostile noises about a possible invasion.

Yet some analysts think that Hun Sen’s stance against Taiwan, a string attached to China’s largesse, could cut off a vital new trading outlet as Cambodia faces economic sanctions that would inhibit its access to key Western markets.

“Any official attention to – or even acknowledgement of – Taiwan’s positive economic role in [Cambodia] would be met with severe blowback from China,” said Bradley Murg, assistant professor of political science at Seattle Pacific University.

“Lack of news coverage is certainly related to the low profile that Taiwanese firms take. Many people are simply unaware of the significant scale of Taiwanese investment in [Cambodia’s] garment sector,” he added.

Taiwanese companies invested roughly US$171 million in Cambodia in 2017, rising to $181 million last year, according to a recent Forbes report. Last year’s sum was its highest in six years.

In 2017, Cambodia imported more goods from Taiwan – valued at $709 million – than it did from South Korea, Singapore or Japan, according to Cambodian Ministry of Commerce’s figures. Exports to Taiwan, however, were minimal, worth just $40 million that year.

Grand Twins International, a Taiwanese manufacturer, has been a mainstay of Cambodia’s garment sector for years, with assets worth almost $89 million in the last quarter of 2018, according to the firm’s latest financial report. In 2014, it became the second foreign firm to be listed on Cambodia’s stock exchange.

It is just one of many Taiwanese firms that play a significant role in Cambodia’s garment sector, the country’s largest provider of jobs and the producer of its main export good, which contributed to around 40% of gross domestic product last year.

Asia Times’ independent analysis found that Taiwanese-owned businesses in Cambodia’s garment sector are often more productive than firms owned by individuals from mainland China.

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Out of the 609 companies registered with the Garment Manufacturers Association of Cambodia (GMAC), an employer’s lobbying group, 111 are Taiwanese-owned and 249 China-owned. However, Chinese-owned manufacturers tend to employ fewer workers and are often small scale.

The largest Chinese manufacturer, Lin Wen Chih Sunbow Enterprises Co, employs 6,133 workers, while the largest Taiwanese-owned garment maker, Carlington (Cambodia), employs 9,830 workers, according to GMAC’s records.

Combined, the 249 Chinese-owned manufacturers employ 192,714 workers, for an average of 774 employees per company; the 111 Taiwanese-owned manufacturers in Cambodia employ 181,541 workers, for an average of 1,635 employees per company, according to Asia Times analysis.

Full article available at: https://www.asiatimes.com/2019/04/article/hun-sen-has-a-one-china-dilemma/