{"id":2199859,"date":"2023-01-09T09:45:44","date_gmt":"2023-01-09T09:45:44","guid":{"rendered":"https:\/\/www.nknews.org\/koreapro\/?p=2199859"},"modified":"2023-04-05T16:10:24","modified_gmt":"2023-04-05T07:10:24","slug":"how-investing-in-cambodia-can-help-south-korea-balance-against-china","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/","title":{"rendered":"How investing in Cambodia can help South Korea balance against China"},"content":{"rendered":"

The Yoon administration recently debuted its fleshed-out <\/span>Indo-Pacific Strategy<\/span><\/a>, <\/span>inching closer to the U.S.<\/span><\/a> while seeking to maintain good terms with China, and the new document has also largely replaced former President Moon Jae-in\u2019s <\/span>New Southern Policy<\/span><\/a> (NSP) that sought closer relations with Southeast Asia and India.<\/span><\/p>\n

Still, there is no question that the NSP has had a lasting legacy on South Korea\u2019s foreign policy, and one of the policy\u2019s biggest successes came in the form of improved ties with Cambodia. This provides an opportunity for the Yoon administration: If it presses ahead with the advantage it got from its predecessor, it can reap significant benefits from this improved relationship.<\/span><\/p>\n

When the <\/span>Cambodia-Korea Free Trade Agreement<\/span><\/a> (CKFTA) went into force last month, it became Phnom Penh\u2019s second bilateral free trade agreement, following the one between it and China in Jan. 2022. Under this agreement, Cambodia will export agricultural products, garments, textiles, rubbers and electronics to South Korea. Meanwhile, the ROK will ship automobiles, farming equipment, construction machines and materials, cloth and food to Cambodia.<\/span><\/p>\n

Currently, South Korea\u2019s most successful economic relationship with a Southeast Asian country has been with Vietnam, which is poised to overtake Japan to become South Korea\u2019s <\/span>third-largest trade partner<\/span><\/a>.\u00a0<\/span><\/p>\n

But Cambodia provides Seoul with a backup option in the region, something that could be of particular importance as South Korea faces the difficult task of achieving carbon neutrality by 2050.<\/span><\/p>\n

And while Phnom Phen\u2019s close ties to Beijing are a complicating factor, they also provide an opportunity for Seoul to chip away at China\u2019s influence by nurturing economic ties with Cambodia.<\/span><\/p>\n

A BACKUP PLAN<\/b><\/p>\n

South Korea passed the <\/span>Carbon Neutrality and Green Growth Act<\/span><\/a> in Sept. 2021, which mandates that the country achieve carbon neutrality by 2050. As a stepping stone toward that goal, the act also required Seoul to achieve a 35% reduction in 2018 greenhouse gas (GHG) by 2030, a figure later pushed up to <\/span>40%<\/span><\/a>.<\/span><\/p>\n

Reaching such a lofty goal is a tall order for South Korea\u2019s export-led economy. The ROK imports nearly all of the fossil fuels it consumes, ranking it among the world\u2019s <\/span>top-five<\/span><\/a> importers of liquified natural gas (LNG), coal and petroleum. It will be challenging for South Korea to replace that much fossil fuel with carbon-free sources, even with a 27-year head start.<\/span><\/p>\n

In addition, Korean conglomerates are facing international pressure from global environmental campaigns. For example, in September, Samsung Electronics signed the <\/span>RE100 sustainability initiative<\/span><\/a>, a worldwide campaign to replace all electricity generated by fossil fuels with renewable energy by 2050. This campaign puts Samsung in a difficult position because chip manufacturing is responsible for a significant amount of the carbon dioxide that the company emits.<\/span><\/p>\n

If Samsung fails to meet its RE100 obligations, it could result in <\/span>protectionist trade barriers<\/span><\/a> that would lead to loss of market space amid a <\/span>chip war<\/span><\/a>.<\/span><\/p>\n

To stay competitive while meeting carbon neutrality goals, Korean corporations have increasingly looked to move their operations to Vietnam so that their emissions don\u2019t count toward the ROK\u2019s total. Yet this may not be sustainable, particularly as Vietnam itself rapidly develops and local wages increase.\u00a0<\/span><\/p>\n

Because of this, Seoul will likely want to diversify its ties in the region and avoid relying too heavily on one country. And in this case, Korean companies will need to begin operations in countries like Cambodia, which have <\/span>low carbon emissions<\/span><\/a>, <\/span>low wage rates<\/span><\/a> and many<\/span> working-age people<\/span><\/a>.<\/span><\/p>\n

\"\"

Factory, February 2020 | Image: Pexels<\/a><\/em><\/p><\/div>\n

ARMS DEALS AND SOFT POWER<\/b><\/p>\n

Days before the CKFTA went into force, defense minister Lee Jong-sup and his Cambodian counterpart Tea Banh held a <\/span>meeting<\/span><\/a> in Siem Reap on the sidelines of the Association of Southeast Asian Nations (ASEAN) Defense Ministers\u2019 Meeting-Plus to discuss bilateral cooperation in defense and other issues.<\/span><\/p>\n

After the meeting, the two ministers signed a memorandum of understanding (MOU) on bilateral cooperation in U.N. peacekeeping operations and on South Korea providing engineering equipment to Cambodia.\u00a0<\/span><\/p>\n

This is not the first time the ROK and Cambodian militaries have worked together. In the past, the ROK military <\/span>delivered<\/span><\/a> hundreds of military vehicles to help the Southeast Asian state strengthen and modernize its defense capabilities.<\/span><\/p>\n

While modest compared to its investments in other countries, South Korea\u2019s increasing investments in Cambodia have increased its presence in the Southeast Asian nation\u2019s finance sector. For instance, <\/span>Woori Bank<\/span><\/a> obtained a full commercial license from the National Bank of Cambodia and <\/span>KB Kookmin Bank<\/span><\/a> has fully acquired PRASAC Microfinance \u2014 the country\u2019s largest microfinance institute.<\/span><\/p>\n

In September, Seoul also <\/span>vowed<\/span><\/a> to provide a $3.3 million grant to Cambodia\u2019s Ministry of Agriculture, Forestry and Fisheries to boost the production of high-value vegetable crops and improve farmers\u2019 livelihoods.\u00a0<\/span><\/p>\n

That same month, the Korea International Cooperation Agency (KOICA) <\/span>granted<\/span><\/a> $7.9 million to the Royal University of Phnom Penh to build a specialized incubation business hub for its students. The project aims to develop Cambodia\u2019s local entrepreneurial ecosystem to help its people achieve the government\u2019s middle-income goal by 2030.<\/span><\/p>\n

As Cambodia is still a developing country, Seoul can quickly gain Phnom Penh\u2019s favor at an affordable rate, as it has been doing so far by helping improve Cambodian living standards. This investment will translate to improved economic opportunities for ROK corporations and defense contractors.<\/span><\/p>\n

A BELT AND ROAD ALTERNATIVE<\/b><\/p>\n

President Yoon Suk-yeol has <\/span>repeated<\/span><\/a> the importance of ASEAN and its \u201ccentrality,\u201d which refers to the role of ASEAN as a regional leader or driver, convenor or facilitator, hub or key node and an agent of progress in Asia\u2019s regional cooperation.<\/span><\/p>\n

However, ASEAN has also been easy to ignore because of its need to operate via <\/span>consensus<\/span><\/a>. And one of the reasons for ASEAN\u2019s inability to function effectively has been that Cambodia has frequently wielded its veto power to act as Beijing\u2019s proxy.\u00a0<\/span><\/p>\n

For example, ASEAN foreign ministers attempted to issue a <\/span>communique<\/span><\/a> in 2016 that referred to an international court ruling siding against Beijing in its maritime dispute with the Philippines and expressing the need to respect international law. But Cambodia \u2014 China\u2019s closest ASEAN ally \u2014 blocked the communique and has opposed any ASEAN stand on the South China Sea.<\/span><\/p>\n

Cambodia is also one of the biggest <\/span>beneficiaries<\/span><\/a> of China\u2019s Belt and Road Initiative (BRI).<\/span><\/p>\n

By providing economic assistance and investments to Cambodia, South Korea can incentivize Phnom Penh to find partners other than Beijing. This will benefit Seoul in the long run \u2014 both economically and diplomatically with respect to Washington.<\/span><\/p>\n

In light of this, the Yoon administration is likely to continue the New Southern Policy in principle if not in name under its Indo-Pacific Strategy.\u00a0<\/span><\/p>\n

Edited by Bryan Betts<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Defense & Security<\/span><\/a>Inter-Korean & Foreign Relations<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

The Yoon administration recently debuted its fleshed-out Indo-Pacific Strategy, inching closer to the U.S. while seeking to maintain good terms with China, and the new document has also largely replaced former President Moon Jae-in\u2019s New Southern Policy (NSP) that sought closer relations with Southeast Asia and India. Still, there is no question that the NSP […]<\/p>\n","protected":false},"author":10407,"featured_media":2199861,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[24,26,28],"class_list":["post-2199859","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-business-economy","tag-defense-security","tag-inter-korean-foreign-relations"],"yoast_head":"\nHow investing in Cambodia can help South Korea balance against China - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How investing in Cambodia can help South Korea balance against China - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"The Yoon administration recently debuted its fleshed-out Indo-Pacific Strategy, inching closer to the U.S. while seeking to maintain good terms with China, and the new document has also largely replaced former President Moon Jae-in\u2019s New Southern Policy (NSP) that sought closer relations with Southeast Asia and India. Still, there is no question that the NSP […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/\" \/>\n<meta property=\"og:site_name\" content=\"KOREA PRO\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/nknewsorg\/\" \/>\n<meta property=\"article:published_time\" content=\"2023-01-09T09:45:44+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-04-05T07:10:24+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/koreapro.org\/wp-content\/uploads\/sites\/6\/2023\/01\/Untitled-design-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1870\" \/>\n\t<meta property=\"og:image:height\" content=\"1052\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"johnleenknews\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@southkoreapro\" \/>\n<meta name=\"twitter:site\" content=\"@southkoreapro\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"John Lee\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/\"},\"author\":{\"name\":\"johnleenknews\",\"@id\":\"https:\/\/koreapro.org\/#\/schema\/person\/b9766dba611638edc06a6e0b7078714d\"},\"headline\":\"How investing in Cambodia can help South Korea balance against China\",\"datePublished\":\"2023-01-09T09:45:44+00:00\",\"dateModified\":\"2023-04-05T07:10:24+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/\"},\"wordCount\":1125,\"publisher\":{\"@id\":\"https:\/\/koreapro.org\/#organization\"},\"image\":{\"@id\":\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/assets.korearisk.com\/uploads\/sites\/6\/2023\/01\/Untitled-design-1.jpg\",\"keywords\":[\"Business & Economy\",\"Defense & Security\",\"Inter-Korean & Foreign Relations\"],\"articleSection\":[\"Analysis\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/\",\"url\":\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/\",\"name\":\"How investing in Cambodia can help South Korea balance against China - KOREA PRO\",\"isPartOf\":{\"@id\":\"https:\/\/koreapro.org\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/assets.korearisk.com\/uploads\/sites\/6\/2023\/01\/Untitled-design-1.jpg\",\"datePublished\":\"2023-01-09T09:45:44+00:00\",\"dateModified\":\"2023-04-05T07:10:24+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/#primaryimage\",\"url\":\"https:\/\/assets.korearisk.com\/uploads\/sites\/6\/2023\/01\/Untitled-design-1.jpg\",\"contentUrl\":\"https:\/\/assets.korearisk.com\/uploads\/sites\/6\/2023\/01\/Untitled-design-1.jpg\",\"width\":1870,\"height\":1052},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/koreapro.org\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"How investing in Cambodia can help South Korea balance against China\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/koreapro.org\/#website\",\"url\":\"https:\/\/koreapro.org\/\",\"name\":\"KOREA PRO\",\"description\":\"Be smart about South Korea. 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