The Dual Track: A Comparative Political Economic Analysis Of Chinese And American Investment In Cambodia

This thesis undertakes a political economic analysis of investment competition between two major powers in a third country, using Chinese and American investment in Cambodia as a case study. Utilizing interview research, data analysis and the collection of secondary source materials, the author describes the "dual track system" that results from the investment strategies of the two countries, in which China emphasizes economic cooperation and the United States focuses on military cooperation. China and Cambodia have similar cultural backgrounds and their bilateral relations in the modern era have always centered on economic cooperation. In addition, the government guidance and economic and trade cooperation zone that are part of China's investment model are well suited to Cambodia's development model. American decision makers believe that the United States cannot possibly compete with China economically in Cambodia, and instead see military cooperation as a comparative advantage. The sustainability of the dual track system lies in the political and economic goals of China and the United States; China hopes that, through economic cooperation, it can expand its influence over the ethnic Chinese population of Cambodia and safeguard its own maritime and energy security. At the same time, the interests of Chinese enterprises in Cambodia and the presence of the ethnic Chinese business network have a limiting effect on the Chinese government's actions. The United States hopes to maintain its military position in Southeast Asia and at least partially contain China's rise. China and the United States will have opportunities to cross into their competitor's "track" in the future, but this will require the two countries to reflect on their investment and aid strategies in Cambodia. China must keep up with Cambodia's economic development and increase the transparency of companies that invest in Cambodia. The United States should put more emphasis on tangible development aid and establish a trade preference program that specifically targets Cambodia and other Asian countries.