On China's New Silk Road

ep04Rough Seas: Malaysia, Cambodia & Thailand

Rough Seas: Malaysia, Cambodia & Thailand

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Southeast Asian countries have long managed a complex relationship with China—the region’s biggest trading partner and powerful neighbor. The New Silk Road promises opportunities for economic growth, but at what cost? With China increasingly enforcing its disputed claims to the South China Sea with its military, many Southeast Asians are wary the New Silk Road will help China strengthen its ability to project its power in the region and beyond.

Episode Transcript

Chinese navy radio operator: This is Chinese Navy. This is Chinese Navy. This is Chinese Coast Guard. Please go away quickly.

US pilot: I am a United States military aircraft, conducting lawful military activities outside national air space. I am operating with due regard, as required, under international law.

(Sound of jets on aircraft carrier)

If a war were to break out between the United States and China, it could happen here, in the South China Sea, where a third of global maritime trade passes through. This summer, two US aircraft carriers passed through, too – a show of force in contested waters. 

China claims almost the entire South China Sea – from China in the north, down near the coasts of Vietnam in the west, the Philippines in the east, and Malaysia’s Borneo in the south. The US government now calls these claims illegal. So do several of China’s neighbors, who claim at least part of the South China Sea for themselves, as well as rights to fish stocks, and to the oil and gas reserves that may lie in the seabed. 

(Sound of Chinese jets) 

But China’s having none of it. Since Xi Jinping became China’s top leader in 2012, China has, more than once, rammed and sunk its neighbors’ boats in the South China Sea. And it’s built islands with military bases on them. Xi Jinping has visited. 

(Sound of music welcoming President XI)

In his 2018 visit, President Xi watched fighter jets take off from a Chinese aircraft carrier. 

 He called out his greetings to the troops, and thanked them for their hard work:

Xi Jinping: Tongzhimen hao! (Greetings, comrades!) (Troops shout back.) 

China wants to control the South China Sea, because it protects China from attack. It also makes it harder for the United States to defend the Philippines or Taiwan, if China were to strike against either of them. 

(Troops shouting greetings back to Xi)

China’s got a similar dispute going on in the East China Sea with Japan. And that, too, could, draw US forces in to defend an ally. But China’s now questioning the whole US role as a Pacific power. China’s leaders say Asians can take care of themselves. 

Meanwhile, China’s been testing US resolve in the South China Sea – with what’s known as Gray Zone maneuvers.

Tai Ming Cheung: It’s not quite military. There’s a lot of civilian involvement, or there’s involvement with the Coast Guard. So from a legal point of view, or from the use of military force, it’s below the threshold that you would use military issues.

This is Tai Ming Cheung. He’s an expert on China’s military, and he runs the Institute on Global Conflict and Cooperation at the University of California at San Diego. He explains that Gray Zone maneuvers are actions that help China strategically, might even be aggressive – but don’t rise to a level that justifies a US military response: 

Tai Ming Cheung: Things like the South China Seas, or some of these maritime developments or in cyber, or in space. And so that’s sort of where the Chinese, I mean, they’ve been very, very smart. 

Here’s another way China’s been smart: building out infrastructure in Southeast Asia and around the world – ports, pipelines, roads, railways, sometimes whole cities – a new network of global trade, a new architecture of global power with China at the center. And if all goes according to plan – with China at the helm. 

(Music)

You’re on China’s New Silk Road. I’m Mary Kay Magistad, a former China and Southeast Asia correspondent for NPR and PRX’s The World, looking here, with The Global Reporting Centre, at how China’s global ambitions are seen around the world, and at the impact China’s New Silk Road investments are having on the ground. 

(Sound on streets of Malacca)

Malacca, in southern Malaysia, is a gem of a city. It’s a former Spice Trade port from centuries back, with the architecture of wealth from Portuguese, Dutch and British colonial rule. 

Here, in Chinatown, there’s a gallery in honor of the Chinese explorer Zheng He, who got here before any of the European colonial powers. Now, Chinese are coming again – as tourists, to see China-related sites that date back to Zheng He’s era…

(Sound of Chinese tour guide talking to a tour group in Chinese)

Chinese tourists in Malacca, Malaysia, checking out an ancient well built by the sultan for his Chinese wife. (Mary Kay Magistad)

…And as investors, on China’s New Silk Road. The official name is the Belt & Road Initiative – a belt of land routes, and a Maritime Silk Road of sea routes. And China’s saying this will be a win-win for everyone. 

China and most Southeast Asian countries are already each other’s top trading partners. In fact, Malaysia is one of several Southeast Asian countries that have benefitted from the US-China trade war.

 Chinese factories have set up shop here, where products say, “Made in Malaysia,” so they’re not subject to punitive tariffs. That’s helped China’s economy, and Malaysia’s. 

China says its Maritime Silk Road investments will be a win-win too. There’s an ambitious one here, called Melaka Gateway. 

(Sound of hammering.)

It’s meant to include a new container port, an industrial park, a cruise ship terminal, and new office space and housing for thousands of people. Construction is underway, but so far, you wouldn’t exactly call the area bustling.

Ushar Daniele: As we’re driving around, we’re looking around, there’s actually not much movement, there’s not much people. And quite a huge number of the shop lots that are here are actually not occupied. 

This is Ushar Daniele. She’s a Malaysian journalist who’s showing me around. 

Mary Kay Magistad: What does that tell you?

Ushar Daniele: That locals are actually not interested to rent or purchase units in this area. Because it is quite far off the main part of the city. But who knows once the project is complete? Then, there may be more movements, or more people coming into this area.

That’s certainly the idea from China’s perspective. Three Chinese state-owned companies are involved in this project, and China’s premier Li Keqiang has come to visit. Why this level of interest, in a sleepy former colonial town in Malaysia? 

(Sound of water lapping, crows cawing.)

Location, location, location. 

Malacca sits on the Malacca Strait, where much of the world’s maritime trade passes through, including a lot of China’s oil and gas from the Middle East and Africa. 

But here’s an issue. The Malacca Strait is narrow. It’s less than two miles across at its narrowest, near Singapore. Singapore is friendly to the United States. And that’s long worried China’s leaders. In case of a conflict, what if the Malacca Strait got blocked? 

Having a presence here, in Malacca, might just help protect traffic that matters to China. So could other Chinese investments along the Malacca Strait – north of here, in Malaysia’s third largest port, Penang, and south of here, right near Singapore – very close to that chokepoint. There, Chinese companies are leading an effort to build an entire new city on four man-made islands:

Forest City Promo: Forest City. The one and only city. Proudly presented by Country Garden Group, and EDSB Group, a joint collaboration among Huawei, Sasoki, and Deloitte. (Fades under)

Forest City is a $100 billion venture, building a city for 700,000 people. It was conceived as a city primarily for affluent foreigners – especially Chinese citizens, who have bought many of the first apartments up for sale: 

David Koh: It’s rather quite scary, you know? So they’re developing a little China, with wall of China around it in Malaysia.

And a wall of China in Malaysia is not appealing to David Koh. He’s a painter and gallery owner in Melaka’s Chinatown, and he’s of Chinese ancestry himself. Like many Malaysians, he’s worried about the way China’s been investing in Malaysia:

David Koh: The China investors have a philosophy of everything on their own. They brought in their own laborers, they brought their own cooks, to cook for the laborers. And then the only thing they probably have from us is renting quarters for their laborers, and all. You know, from the very beginning, from management to laborer to port construction, it’s from China. So it doesn’t contribute much to our economy. 

That’s actually pretty common, everywhere Chinese construction teams go in building out the New Silk Road. Chinese often just find it easier to work with other Chinese. Same language, same culture, same work ethic.

There are other patterns too. In Southeast Asia, a big focus is on projects on coasts, near the South China Sea, and the Malacca Strait.

Artificial islands built by the Chinese have created fetid mud flats in Malacca, Malaysia where locals used to fish. (Mary Kay Magistad)

And these projects on strategic waterways seem to follow two Chinese strategies, written about in internal Communist Party and military journals. One: build for civilian use, in a way that can be converted to military use later. And two, in short: port-park-city. Build out and control deep-water ports. Buy them or get a 99-year lease if you can. Build industrial parks, good for civilian exports now, and for military use later if needed. And expand the city that connects them – with more housing and office space, and room for outsiders to come in. Port-park-city. 

Another pattern? China is great at leveraging opportunities, whether with poor countries desperate for investment, or corrupt, sometimes authoritarian leaders, eager for cash and political backup. 

Kol Preap: What we have observed in general is that Chinese investors tend to be more willing to pay bribes. 

Kol Preap, corruption watchdog Transparency International’s country representative in Cambodia, when I talked to him:

Kol Preap: When they come to countries that are highly corrupt, either in Asia or in Africa, they can fit into the system so well. They don’t have to learn. They don’t have to be hesitant. They just use their skill, very quickly, and then play the games that they want to be playing, and take the advantage. 

That’s been playing out differently in different Southeast Asian countries. Singapore is not really corrupt, so there, Chinese investors need to offer bottom-line value. Cambodia — is one of the most corrupt countries in the world, says Transparency International. And we’ll come back to it. Malaysia is somewhere in-between, depending on who’s in charge. When it was Prime Minister Najib Razak — Malaysia’s Anti-Corruption Commission revealed, by releasing this secret recording — it was a problem. 

Najib Razak: That would show that it’s a legitimate, what do you call it, financing package. It’s not money laundering.” 

Here, Najib is trying to persuade the Crown Prince of Abu Dhabi, to help him channel money, so Najib and his associates look less corrupt. 

Crown Prince of Abu Dhabi: Mr. Prime Minister, believe me, I want to finish this. This is bad. And I don’t want it to happen.

Najib Razak: Thank you. Thank you, your highness. This is bad. It is very serious. It could lead to something very, very un-, unforeseen and catastrophic, for me, for our government, and also for you and your side. 

Najib was Malaysia’s prime minister for almost a decade. Since leaving office, he’s been found guilty of money laundering and abuse of power, and he faces dozens more charges in court. 

And here’s why. While in office, he helped to set up a fund, with taxpayers’ money, to develop Malaysia. And $4.5 billion of it went missing. 

As money disappeared from this development fund, called 1MDB, Najib welcomed Chinese investment into Malaysia to do real infrastructure projects fast, to win over voters before the next election: 

Lau Zheng Zhou: He needed a lot of investment coming to Malaysia to push the GDP numbers. He was looking at above six percent GDP growth.

This is Lau Zheng Zhou. He’s research manager at the Institute for Democracy and Economic Affairs in Malaysia’s capital, Kuala Lumpur. 

Lau Zheng Zhou: How do you manage to pump up the economic growth rate in such a short period of time? 

The answer could be mega-infrastructure projects, like the kind China was building on the New Silk Road. 

He says Najib’s efforts to appeal to voters backfired, because Malaysian journalists got on the story. 

Lau Zheng Zhou: Look, people are always easily influenced, I guess, by what the media has to say. And the media has been portraying Chinese investment in a less than positive, or less than neutral light. There was a lot of coverage on Chinese investment in mega-infrastructure projects, which they then tried to link to the political economy situation in Malaysia, whether or not there was the possibility of corruption at the highest level, whether or not there was rent-seeking behavior on the investors.

Rent-seeking, in this case, is a polite word for corruption. 

By the time Najib was up for re-election, in 2018, many Malaysians were convinced that Najib was corrupt, and all this Chinese investment was not good for Malaysia.

(Sound of cheering at Malaysian opposition political rally)

I was in Penang during the campaign. And at this opposition rally, where parents brought their kids and let them stay up late, people told me: ‘We’ve been a colony. We don’t want to become a colony of China’s.’ I also heard this: 

Rajun: My name is Rajun. I’m a resident of Penang. Well, I hope that they do not fall into that trap of what Sri Lanka was branded as. Because a lot of Chinese investment went into Sri Lanka, then it became – everything, they have to listen to the Chinese. 

Here’s what happened in Sri Lanka. When Mahinda Rajapaksa was president, he took Chinese loans to have Chinese state-owned companies build a port and an airport in his home district, Hambantota. When Sri Lanka couldn’t make its debt payments, the Chinese state-owned company demanded equity. So Sri Lanka ended up giving a 99-year lease to a controlling share of the port, and of an area surrounding it that’s the size of Manhattan. 

Why was this interesting to China? The port may not be a commercial hotspot now, but it’s part of what Chinese strategists call a “String of Pearls” – ports that China owns or controls, all the way from Asia to Europe, and around Africa and the Middle East. Adding Hambantota to that string of pearls could be good for trade, and for power projection. And many Malaysians didn’t want that to happen here.

Speaker at political rally: Politics is dirty! Youth must clean it up! (Crowd cheers) We are the youths! We are not corrupted!! 

The voters had their say, and Najib was out. In his place was a 92-year-old former prime minister, Mahathir Mohamad. He suspended the big Chinese projects. And on a visit to Beijing, he voiced the same concerns I’d heard at the rally: 

Mahathir Mohamad: We do not want a situation where there is a new version of colonialism happening because poor countries are unable to compete with rich countries in terms of just open free trade. It must also be fair trade. 

Mahathir — who has since resigned as prime minister — got China to cut one-third off the cost of a project China really wanted. China also agreed to cut Malaysia in on profit-sharing and management. The project was for a railway that traverses Malaysia, coast to coast, from its biggest port, Klang, in the west, to another port, Kuantan, in the east.

(Sound of driving in car)

The project is called the East Coast Rail Link, and it quickly got back on track. Ushar had visited a couple of months before we went up together – and she was surprised by how rapidly construction was moving forward:

Ushar Daniele: Oh wow! Compared to two months ago, all the infrastructure is already up. It was previously all just on the roads, but now it’s actually been put up. It’s standing right above us. This is amazing, how quick they could get work done in two months. This is impressive!

Even the coronavirus barely slowed this project down. And it’s clear why China might want to get this done. That east-west railway link is a couple hundred miles north of the Malacca Strait chokepoint. 

It’s an alternative route, in case the Malacca Strait gets blocked. The project will not only expand the port, and the rather sleepy city of Kuantan, it also includes building a huge industrial park. Port-park-city. Just like the strategy says.

So to recap, China’s Maritime Silk Road has staked out positions all along Malaysia’s west coast, on the Malacca Strait — Forest City, Melaka Gateway and Penang. On the east coast, there’s Kuantan. And the waters that hit its shores are actually an extension of the South China Sea. Go east across those waters, toward where China has built those islands — and you hit Cambodia – another place where China’s got multiple interests along the coast.

Cambodia’s port city of Sihanoukville used to be a charming, laid-back beach town, with ochre-colored French colonial architecture.

(Sound of construction in Sihanoukville)

Now, it looks like a modern Chinese city, with construction cranes, endless traffic jams, signs in good Chinese and bad Khmer, and so much concrete laid down over ground that used to absorb monsoon rains… 

(Sound of wading through water)

Cambodia’s port city of Sihanoukville. (Mary Kay Magistad)

That the floods are really something. 

I’m wading here, up to my knees in water, in the middle of a city street. A motorized tri-shaw is stuck in the middle of it. Another goes by with a live chicken clucking on top.

(Sound of chicken clucking as tri-shaw drives through water)

I step over sandbags, and into an aid agency that works with poor urban families and kids. One of the workers tells me something I’m glad I didn’t know when I was up to my knees in water. 

ACT 19: They got a crocodile. 

MKM: What, here?

K: Here! Two crocodiles! Not here, but on the street.

MKM: On the street?

K: On the street. Up on the main road, they got two crocodiles – one is 5k and another one is 2k. And here in the classroom we have a big snake. Because of course they go into higher ground. 

(Sound of wading through water)

The snakes know what they’re doing. On this particular day, some of the classrooms on the ground floor are flooded up to our ankles. This group, M’Lop Tapang, helps educate thousands of poorer Cambodian kids in Sihanoukville. And it provides healthcare and other services for their families. It’s been a headache for such families, dealing with Sihanoukville as Chinese boomtown, starting in about 2016. Prices soared. Landlords kicked out Cambodians so they could charge Chinese tenants five times more. M’Lop Tapang’s medical program director, Ngov Chan Ravy, compares the surge of Chinese into Sihanoukville to this flood:

Ngov Chan Ravy: We don’t really hear something about that before they come, oh, a really, really big population of Chinese people will come into our city, and will develop our city. And when they come, it’s just like the flood we are having. It’s just like of like, the water is come really, really fast. 

China’s impact on Sihanoukville may look chaotic now, but it actually appears to be following the port-park-city model. Sihanoukville was already Cambodia’s only deepwater port. Chinese investment built an industrial park here, which created some 10,000 Cambodian jobs. And Chinese construction is expanding the city. But some things happened in Sihanoukville that were outside the plan, thanks to Cambodia’s lax legal system. Dozens of casinos opened, and Sihanoukville became a center for money laundering, and even for Chinese gang activity. 

Kol Preap: Gangs on the street in Sihanoukville, I’ve seen them myself. 

This is Kol Preap again, from Transparency International. 

Kol Preap: It reminds me of the movie that I watched growing up, big brothers on the street, holding sword and knife or stick, fighting each other, in the movie, yeah? But I saw that in Sihanoukville, and I said, ‘wow. Now that’s not only in the movie I used to see. Now I see it in my country.

MKM: Chinese gang members holding swords and sticks, and fighting each other on the streets? 

KP: Yeah, absolutely. And some of them were not even scared of the police. But, it was otherwise. The police were scared of them. 

(Sound of traveling in car)

There was other violence, too. I hear about it from two journalists I’m traveling with here, Yon Sineat, who’s Cambodian, and Andy Nachemson, who’s American. They’ve worked together, and among the stories they’ve covered were land grabs here in Sihanoukville, so land could be sold to Chinese buyers: 

Andrew Nachemson: We just passed an area called Prey Nab where some of the more violent land disputes have been going on. So, as Chinese investment has come in, land prices have risen exponentially. And it’s resulted in a lot of arguing over who owns land. And in Prey Nob in particular, there’s been villagers fighting back violently, and there’s been police using force. And somebody even got shot, and he survived. But police have used live rounds to counter these protests. 

Yon Sineat: Even the residents who live here for many years, but it’s never guaranteed for sure that they can stay here for the next generation. Because the Chinese come in, and the authorities are kind of ‘ok, we make the deal with Chinese, and we force you out.’

Partner reporter Yon Sineat in floodwaters, Sihanoukville, Cambodia, in August 2019. (Mary Kay Magistad)

Cambodia’s government has welcomed Chinese investment. And in the midst of the COVID pandemic in China, President Xi Jinping welcomed Cambodia’s Prime Minister Hun Sen. 

(Sound of cameras clicking, then of Xi Jinping speaking in Chinese)

President Xi said how much he appreciated Hun Sen’s visit in the midst of this crisis. He said this showed that China and Cambodia are “all-weather friends.”

China and Cambodia do go way back, and in a way, Hun Sen and China do too. Hun Sen was a teenage Khmer Rouge, when China backed the group in its fight to take power during the Vietnam War.

When the Khmer Rouge won, Hun Sen became a local official, and China kept backing the Khmer Rouge, as they turned Cambodia into a giant work camp, and caused almost two million Cambodian deaths.

It ended, finally, with a Vietnamese invasion. Hun Sen by then, had switched sides. He was installed as foreign minister, then prime minister. And China spent the next dozen years backing the Khmer Rouge as they fought to overthrow Hun Sen’s government. 

But those are bygones now. 

At that meeting in Beijing, Hun Sen told President Xi, people were making too much of COVID-19.

Hun Sen: (Speaks in Khmer) 

He said the Cambodian students who were in Wuhan, where there was an active outbreak at the time? They’d be just fine staying there. 

This was a performance of loyalty, by China’s most reliable friend in Southeast Asia. Hun Sen has even blocked a resolution by the Association of Southeast Asian Nations that condemned Chinese aggression in the South China Sea. 

What Hun Sen gets out of this is a patron who keeps aid and investment coming, and hasn’t voiced concern that some of his critics have been shot dead, or that he’s banned Cambodia’s main opposition party, or that he’s said to be grooming his son to succeed him. 

Sok Kha: So, the less developed country, the more acceptance you are to China influence.

Sok Kha is a Cambodian economist. 

Sok Kha: And the less developed country, the little bit more authoritarian government, then the more likely you are alienated from the Western world. So the more closer you are trying to get yourself to China, right? 

(Sound in coffeeshop where we’re talking)

We’re chatting in a Phnom Penh coffeeshop about a report he wrote for the Asian Development Bank about China’s Belt & Road investments in Cambodia. And he’s pretty clear-eyed about China’s general strategy here: 

Sok Kha: In China’s eye, Cambodia is nothing, other than this tiny spot of land who is ideally located in this region, whereby surrounding countries are partly or wholly influenced by other contesting powers. So in order to put my footprints in here, then I need some friends. 

So for 20 years, China has been Cambodia’s top investor. 

Sok Kha: And what I’ve found so far, well there are a lot of good things going on, and we need to acknowledge that, especially in terms of growth and development impacts. So if China builds a road for you, of course you have goods transport from one location to another location. When China builds a port for you, of course you can facilitate the trade, smoothen the logistics things, like that. 

Cambodia now has one of the fastest growing economies in the world, and Chinese investment has helped. Cambodia’s per capita GDP has quintupled in 20 years, from $300 to $1500. That’s still quite low, and many Cambodians complain that the elite are getting richer while the poor are too often adversely affected by China’s investments. Those include dams upstream in the Mekong, choking the river’s flow and killing fish. And then there’s the mess in Sihanoukville. 

(Sound of construction)

The mess there now is different than when I visited in late summer 2019, when the whole thing was like a construction site, with half-finished roads, gridlocked traffic and garbage everywhere. After local anger flared about Sihanoukville seeming to become a Chinese city, Hun Sen banned online gambling, and Chinese started to leave. By early 2020, the Cambodian government says, some 400,000 Chinese had left, at least for awhile. 

But China’s strategists are still focused on the long game, all along Cambodia’s coast. 

(Sound of waves hitting the shore)

In July 2019, the Wall Street Journal broke the story that Cambodia and China had signed a secret 30-year deal that allows China to use Cambodia’s Naval Base, Ream, to base warships, personnel and weapons. Hun Sen at first decried this as fake news. A year later, he said, it’s not an exclusive deal. Any foreign navy can dock at our base.

New Chinese holiday housing under construction near Ream Naval Base, Cambodia. (Mary Kay Magistad)

(Sound of traveling in car)

Ream is just an hour’s drive south of Sihanoukville, through a national forest with a fair bit of construction going on in within it. On our drive there, Sineat says she’d wanted to go when the government put on a press tour to rebut the Wall Street Journal report. But she wasn’t invited: 

Yon Sineat: I think they try somehow to let the local journalists to spread the news that nothing’s happening there. The rumor of the Chinese military base is not true. And also, one of the government spokesmen said they don’t trust the foreign journalists, so that’s why they only bring the local journalists. And the local journalists, they are also selected. 

Andrew Nachemson: But it’s kind of a classic diversionary tactic by the Cambodian government, which probably does have some success in terms of local consumption, that they can accuse the West, and the US, and the Wall Street Journal, of spreading fake news, and through their pro-government media outlets, probably convince some local people that this was all a plot by the US and the Wall Street Journal. 

Mary Kay Magistad: A plot by the US to do what?

Andrew Nachemson: A plot by the US to destabilize Cambodia. They seem to believe that the US wants to kind of reinstigate a Cold War-type conflict. 

There’s certainly a competition between superpowers here. A few years ago, Cambodia stopped doing military exercises with the United States, and started doing them with China. 

We get to Ream, and take a spin around town. It’s a quiet village, really, other than the military installations. 

Mary Kay Magistad: They’ve taken kind of a chunk out of one of the hills to use the rocks and gravel.

Andrew Nachemson: They’ll definitely going to have to improve the roads, though.

MKM: I’m guessing that’s going to be high on their priority list. 

Down one muddy road, there are Chinese construction teams working on what’s billed as holiday housing. It looks like it could serve other purposes too. 

(Sound in beach restaurant in Ream)

Down at the beach, we can look across to where a few small Cambodian navy patrol ships are berthed. It’s all pretty quiet on this particular day. A local shop and restaurant owner on the beach, Mao Sokha, tells us she hasn’t seen Chinese military here yet, but she’s heard they might come. 

Mao Sokha: (Speaks in Khmer)

Yon Sineat (translating): It’s so scary. It’s like, if there are foreign militaries, what happens if they took away our land, our country?

Mary Kay Magistad: Because Cambodians has already had foreign militaries in the country, right? The French when they were the colonial power. The Americans bombed Cambodia. The Vietnamese came in and invaded. 

MS: (Speaks in Khmer)

YS (translating): When I was young, we hiding underneath of the ground to escape from the US military’s bombs in Cambodia. And again and again, it’s this war and that war. And we had a lot of wars. So I feel like we’ve had enough. 

(Sound of waves on Ream beach.) 

But being here would be useful for China. Ream is near the Vietnamese border, and the South China Sea, both places China wants to keep an eye on. In fact, leaked documents, reported by ABC Australia, detail planning that was done by China’s defense attache in Cambodia, for a visit to Ream in early 2020 by a high-level Chinese military mapping and surveillance team. 

(Sound of drone-like music)

Three weeks later, a Chinese military-style drone was found, crashed, about 50 miles up the coast, past Sihanoukville, in one of Cambodia’s least populated provinces — Koh Kong. And what’s happening there is another fascinating part of China’s strategy in this region. 

(Sound of Chinese tourists in Dara Sakor reception area)

The Dara Sakor resort, in Koh Kong, is a sprawling place. But over the couple of days we’re there, we see just a few visitors, almost all of them Chinese. The beach is all but empty. Even the casino, across the parking lot, has few people at the tables. The rooms in the hotel itself are pretty basic. I’ve seen nicer dorm rooms, which is a little weird, in a place billed as a luxury hotel.

A partially-completed pier near Dara Sakor resort in Koh Kong. The pier was being built by a Chinese construction team until work stopped in roughly 2018. (Mary Kay Magistad)

(Sound of riding in car)

But the road outside is wide and freshly paved, with streetlights and landscaping that feel like part of a gated community – in a national park, where been a lot of illegal logging. 

As we drive around, we see a Chinese-built hydropower dam and reservoir, and Chinese construction teams, building dozens of high-rise buildings. Full-color billboards trumpet what is yet to come. One is for a place called Temi Town. Andy looks it up on his phone. The signal is good here, even though this is a pretty remote part of Cambodia.

Andrew Nachemson: That will include, it’s a 5-star hotel with 800 rooms, a commercial center, a golf course, bungalows, villas, amusement parks and a naval park, whatever that means. (Laughs)

So here’s the deal with this whole area. About a decade ago, the Cambodian government gave a Chinese company with strong Communist Party connections, a 99-year lease, for 20 percent of Cambodia’s coastline. The lease included this huge area. It’s about two and a half times the size of Washington, DC. And this is much bigger than any single concession is allowed to be, under Cambodian law. The rent is $1 million a year, with the first 10 years free. Not a great deal for Cambodians, but it seems to have been something Hun Sen’s patrons in China wanted. Because shepherding the deal through was Zhang Gaoli, one of the seven most senior leaders in China at the time, and chair of the Chinese government’s leading group on the Belt & Road Initiative. 

And yet, the Chinese company in charge of this project, the Union Development Group, says it’s just trying to develop Cambodian tourism – which is why, it says, it’s building an airport. 

(Sound of footsteps on dirt road)

Mary Kay Magistad: I’m standing in the middle of what appears to be the beginning of the biggest, longest runway In Cambodia. This runway is longer than most commercial flights need to take off and land. 

Andy is skeptical. He’s been reporting on this development in Koh Kong for awhile.

Andrew Nachemson: Unless there are going to be millions of tourists flying into Koh Kong, like, it’s absolutely unnecessary to have an airstrip that big. They do claim that the plan is to have millions of tourists coming through that airport. But, I mean, from what we’ve seen so far, that doesn’t seem realistic, at least not for a long time. And then something else that security analysts told me was that the airstrip has certain characteristics, in terms of the way it’s being built, that are similar to Chinese military airstrips. 

Some such analysts say the entire Chinese concession in Koh Kong looks like it could easily be converted to military use. A Cambodian government spokesperson has dismissed that kind of speculation, saying, ‘any place can be converted to military use.’ 

(Music under)

But not every place has its own hydropower station, or a runway long enough for fighter jets, or plans to build Cambodia’s second deep-water port, and housing for tens of thousands of people. Not every holiday enclave is near the South China Sea, across not only from the Malacca Strait, but also from a narrow stretch of southern Thailand where Thais are considering building their own version of the Panama Canal. 

(Music under)

This set of factors caught the interest of the US government. On Sept. 15, 2020, it sanctioned Union Development Group, the company that has this concession. And the US used Magnitsky Authority – the one meant to punish gross violations of human rights. The Treasury Department’s statement said this concession is a malign Chinese investment that has forced Cambodians from their land and devastated the environment. And, it said, if this area were converted to military use, it could threaten regional stability, freedom of navigation and overflight. 

The Magnitsky sanctions block all of Union Development Group’s holdings and property in the United States, or in the possession or control of US persons.

Why this action now? Mounting concern about Chinese positioning along Cambodia’s coastline. And then, there’s also the strategic advantage China could gain if it builds and manages that Thai version of the Panama Canal. 

(Sound of waves crashing to shore)

Where I’m standing, on the coast of the Kra Isthmus, in southern Thailand, doesn’t look like much now. There’s a long sandy beach, with shrimp farmers snoozing in hammocks in wilting tropical heat. But a canal here could provide China with an even better alternative route to the Malacca Strait. It would cut off a day or two of travel, with faster access to the Indian Ocean, and that string of pearls of ports China now owns or controls all the way from Asia to Europe. So China’s been lobbying to try to make this happen, as a Belt & Road investment, built and managed by China. In Thailand, the government has formed committees to do feasibility studies. 

And near the shrimp farmers on the coast, a villager named Sing Tong, pauses from cutting wood…

(Sound of axe hitting wood)

…to say yeah he’s heard about a possible canal. Thai officials have visited, and have told him it could come through here – right here. 

Sing Tong: (Speaks in Thai.)

Translator: He stands on the Thai Canal.

Mary Kay Magistad: So you would have to move?

ST: (Speaks in Thai.) 

Yeah, he says, he’ll have to move. But he expects to get a good deal for his land. Already, he says, people have been coming here to buy up property for themselves, hoping it’ll be worth a lot more later. 

Whether this canal is ever actually built is an open question. It’s been kind of a dream that won’t die for 300 years, since it was first raised as an idea by a Thai king. It’s been considered and dropped many times since, for being too expensive, too complicated, or too risky. 

Rangsi Ratanaprakarn: Personally, I not agree. Because I’m an engineer – it’s not easy to cut across that small area. You have so many things to build around the canal. So I think let’s not do it. 

Mary Kay Magistad: So you think it would not be good for Songkhla’s economy, or? 

RR: Not good. Not good for us. Not good for us. 

This is Rangsi Ratanaprakarn. He heads the Songkhla Heritage Trust. It’s in the ancient port town of Songkhla, south of where the canal would go through. 

Rangsi Ratanaprakarn: I think maybe we’re going to split up if they make the Canal. And we still would like to be part of Siam (Thailand). 

MKM: You’re worried that Songkhla and the area south might become part of Malaysia?

RR: Yes, yes. Or some other nation. China, maybe. (Laughs)

(Music)

This whole area, in southern Thailand, used to be part of Malaysia, until just a century ago. There’s been unrest in recent years, from an unhappy Muslim population. The proposed canal would separate Thailand’s Buddhist north from its predominantly Muslim south. And that’s one of the reasons a canal hasn’t been built up until now. 

(Sound in hotel lobby)

But in Bangkok, in a hotel coffeeshop, a former Thai diplomat, Pithaya Pookaman, tells me that a Kra Canal needn’t separate Thailand. It might help unify it: 

Pithaya Pookaman: Well, the naysayers always advance the argument that the Canal would separate Thailand, north and south, and that it would not be good for the security. But I think that if it can promote economic prosperity in the south region, it would be a win-win situation, not only for the Thai government, but also for the impoverished people in the South.

Where the Kra Canal would go through if approved. (Mary Kay Magistad)

But here’s the thing. Thailand has long prided itself on being canny in its dealings with big powers. It has never been colonized. And Pithaya admits that, for all the potential benefits of a possible canal, Thais do need to keep one important thing in mind: 

Pithaya Pookaman: The Belt & Road Initiative is the linchpin for the Chinese expansionist policies. Great caution has to be exercised when you are dealing with China. Of course, it would promote better connectivity for Thailand. But because it has to tilt to China, it may lose some of its political latitude in dealing with China. 

But many Southeast Asians aren’t sure what their other options are, given how flaky the United States has been in recent years – neglecting Southeast Asia during the War on Terror under President Bush, then announcing a pivot to Asia under President Obama — then, in the Trump era, pulling out of a US-initiated trade deal – the Trans-Pacific Partnership, without offering much of substance in its place: 

Pithaya Pookaman: If this is the situation, how do you expect Thailand and other Southeast Asians to behave? Traditionally Thailand has always been the United States’ staunch ally. But now, the situation in Asia has changed. Whether we can rely on the US, militarily or otherwise, we’re not sure. The US is not as strong as it used to be, and that really sends an alarm to many Asian countries, including Thailand. 

Thais and other Southeast Asians are in the midst of a balancing act. Singapore’s Prime Minister, Lee Hsien Loong, summed it up in an article in the journal Foreign Affairs. He said it was the United States that made Asia’s stability and prosperity possible, because the US championed an open, rules-based global order, and its security umbrella allowed Asians to cooperate and compete, peacefully. 

But now, with a US-China trade war, and the region’s economies hit by a pandemic, Southeast Asian countries don’t want to be forced to choose between China and the United States. Lee says that could cause decades of conflict. It could imperil the Asian century. 

Note that he says Asian Century – 60% of the world’s population – and not the Chinese Century. Sure, China will always be Southeast Asia’s giant near-neighbor. But Southeast Asians want to shape and control their own future. They want options, and respect, and reliable partners. And in that, many say, the United States still has a vital role to play, if it would just do it. 

(Music)

Thanks to partner reporters Ushar Daniele in Malaysia, and Yon Sineat and Andrew Nachemson in Cambodia. Andy’s now’s moved to Myanmar, where he continues to cover Southeast Asia. Our editor is Dave Rummel. Our sound designer is Tina Tobey. Our executive producer is Christine Brandt. 

On China’s New Silk Road is a production of the Global Reporting Centre, a nonprofit group that teaches, practices and promotes innovation in global journalism. Peter Klein is the GRC’s founder. Philippe LeBillon, a GRC partner and geography professor at the University of British Columbia, provided valuable input to the research, reporting and writing of this series. 

On China’s New Silk Road was made possible by generous funding from Humanity United, and from the Social Sciences and Humanities Research Council of Canada. You can find photos, transcripts and more at globalreportingcentre.org. While you’re there, check out other great journalism from the Global Reporting Centre.

Next up: China’s becoming a bigger player in Panama, and throughout Latin America: 

Panamanian voice: China’s aspiration in this region, I think it could benefit these countries. But since we have corrupt governments in almost all of the Latin American countries, I don’t think Chinese investment into this country will benefit us. If bad management, we could end up like Sri Lanka. That could be a real scenario for us. 

China in America’s Backyard, next On China’s New Silk Road. 

(Music fades out)

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