Mission to Cambodia-a Country Fully Integrated by China

(Author: Cheng Sze Lut)

Due to geopolitical reasons, China has a very large influence on Cambodia historically. As China's economic might continue to strengthen, China's economic impact on Cambodia is also increasing. In recent years, the Chinese government has always stressed that Chinese investment is beneficial to local development in her official propaganda; however, the actual situation seen during our visit to Cambodia with the ITUC was quite different.

Among ASEAN countries, Cambodia's population size is relatively small, with approximately 16 million. Social stability had been tormented by years of Khmer Rouge brutality and the Vietnamese invasion until the mid-90’s. Thus, the economy and development levels of Cambodia remain at a low standard.  China's long-term influence on the Cambodian government has prompted Cambodia's weak economic to structurally rely on China.

At present, tourism, construction, and garment processing are some of the major industries in Cambodia.  During our mission, we visited garment industry workers from about ten Chinese-invested factories, as well as construction workers hired by Chinese sub-contractors from the fast-developing tourist city of Sihanoukville. The workers interviewed generally faced harsh working conditions, inequitable treatment from workers from China, and being bullied by Chinese foremen.

Problems faced by workers

The workers we interviewed generally only received the national minimum wage, while some skilled workers could get a slightly higher salary; however, many of them are forced to work overtime and on holidays. In the construction industry, due to the rapid development of Sihanoukville, many Chinese workers were introduced and they were better treated than local construction workers, for instance, Chinese workers were allowed to live in air-conditioned dormitories and the pay gap was several times in difference (the daily wage of local workers was about USD 15/day, whereas that of Chinese workers were more than USD 80). We have also heard many local workers stated that the Chinese foremen would pat their heads repeatedly at work, claiming that it was a manner of saying hello.

Even if the government has stipulated that workers must join social insurance, theoretically they should be compensated by the company when they encounter work injuries. However, from the workers we have come across with, especially in the construction industry, they were often only sent away by companies for less than the medical expenses when encountered work injuries; whereas some workers failed to receive social insurance cards, and even if they were covered by social insurance, they received only basic medicines. Due to various unfair working conditions, organizing trade unions has become the workers' choice. However, joining unions was often discriminated against, including being suppressed by existing yellow union workers. If suppression was not successful, they faced dismissal from the company. Moreover, the management only wanted to use money to settle disputes; just when talking to the workers in Phnom Penh on our first day of visit, we found that two factory owners failed to reinstate workers who were dismissed due to their participation in trade unions, despite mediation from government officials.


Economic activities in Cambodia

There are deep-lying factors behind the above problems. As Cambodia's garment industry is limited to processing procedures, while processes such as spinning, dyeing and other procedures do not take place in Cambodia, such low-added values in the Cambodian garment industry makes it easy to be transferred to other countries (such as Vietnam and Bangladesh), putting workers in a vulnerable position. At present, about 60 to 70% of the country's garment manufacturing industry is funded by Chinese investment, and the rest from South Korea, Hong Kong, and Taiwan.

As for the construction industry, the local government argues that because Cambodia has few high-rise buildings, Chinese subcontractors often import Chinese workers to work in Cambodia, which currently accounts for more than 30% of the country ’s workforce in the construction industry. Moreover, due to the influx of Chinese tourists who prefer gambling as their major entertainment activity, the constructions of casinos and hotels are expanding rapidly in Sihanoukville.

When asked to compare the working conditions in Chinese-invested factories from other capitals, the workers revealed that although wages were low in general, factories of European and US investments usually paid the highest wages, followed by Japanese investment, and other Asian capitals. Again, the worst was Chinese-invested factories. Among them, some interviewed workers came from a Chinese-invested factory that used to be Korean-owned, they revealed that lunch time was more sufficient, and workers were allowed to work overtime voluntarily, but the rules became much stricter since the factory had switched hands. During the meeting, workers from a Sino-US joint venture factory and Malaysian-invested factory said that the companies did not hinder the formation of the union too much.

Living environment under Chinese influence

In addition to the harsh treatment of workers, we learn that the everyday lives of the local population in Sihanoukville are also affected by Chinese capital. Due to the government's development of the land, some farmer representatives stated that they had lost their land (but the land has left idled after being requisitioned) and were forced to work in the city as factory workers, hotel securities, or tuk-tuk drivers. After the loss of land, these farmers often need to work long hours to repay their loans and faced competition from Chinese workers. Even unskilled positions such as security guard and driver face competition from the Chinese due to the influx of Chinese tourists, Chinese investors are more willing to hire Chinese workers to entertain Chinese tourists in tourist cities. In addition, local businesses such as convenient stores and restaurants also revamped themselves to cater Chinese tourists, excluding the needs of local customers from their business model.

In addition, the influx of Chinese capital has also transformed the environment in Sihanoukville to the worse. Due to insufficient municipal construction, the sudden influx of Macao-style luxury hotels imposed considerable strain on the existing sewage, construction waste, and garbage disposal structure. Destroyed public roads and dusty environments are everywhere. The luxury hotels invested by China, besides seizing the scenery of the seaside to their disposal, has also built walls to cut off the beaches from public access.

Regardless of various problems brought about by Chinese investment, including unfair treatment of workers and environment degradations, government officials we approached failed to respond to such problems. Officials are obsessed with amendments to laws and regulations, such as social insurance covering self-employed people and visas for foreign workers, that are somewhat irrelevant to the current situation. For example, tuk-tuk drivers from China are still able to operate without driver's license; despite being arrested, they can bribe the police to be released. Problems discussed above are yet to be addressed and the proposed law and regulation changes are inadequate to cope with the deteriorating situation.

Compared with our previous mission to Indonesia, Indonesian officials at least acknowledged the relative lack of administrative capacity, but Cambodian officials are somewhat unconcerned in comparison. But it's no wonder that in a country where the per capita income is only one-third of Indonesia, the office buildings of senior government officials in the capital are apparently more luxurious; while the majority of grand buildings are Chinese entertainment and real estate projects. It is really questionable whether the local government is willing to improve the problems faced by local workers.