INTRODUCTION

Over the last three decades, China has witnessed dramatic economic transformation, rapid development and greater involvement in regional and global economic and political affairs. Such significant achievements have become the subject of intense debate, seeing China as both economic threat and opportunity.

Countries in the GMS are geographically close to China and constitute a highly dynamic region with great potential for development that could become a strategic market space and provide institutional arrangement prospects for strengthening China's regional integration. Likewise, China could become the gateway and main market destination for GMS countries, reducing their export dependency on the international market. Through connecting with countries in the GMS, China has built considerable trade and investment relations and provided support in the form of official development assistance (ODA), particularly infrastructure development.

Cambodia views China as a promising development partner that can expedite the country's development and reduce the gap with other Asian countries. Clearly, the weight of China's presence is being increasingly felt in the country, drawing attention to its contributions and impacts. In discussing these issues, therefore, China's increasing role and its impacts within Cambodia should be studied.

Research Objectives

This study is one of a series of country studies conducted by GMS-DAN with support from the Rockefeller Foundation that seek to assess the potential impacts of China on the poor in the GMS countries, namely Cambodia, Vietnam, Laos and Thailand. This chapter focuses on Cambodia and analyses the poverty effects of China's rise through three critical components: (i) trade, (ii) investment, and (iii) official development assistance. It examines the trade relation between Cambodia and China and its poverty implication by mainly looking at the role of China's trade in labour-intensive products. The contribution that China's investment makes to the poor is reviewed through a case study on the garment sector. In recognition of China's support in developing Cambodia's infrastructure, two case studies on Chinese ODA funded projects in the transport sector explore the contributions of China's assistance to livelihood and social development of local people.