Alternative Modernity
Multi-modernity and Chinese-style modernisation, Zolton Pozsar and Barry Eichengreen on Exorbitant Privilege, Seun Sam on Cambodia-US relations
UPDATE: After the 20th National Congress of the Communist Party of China was held, "Chinese modernity”, “new form of human civilization", "diversity of civilizations", "coexistence of civilizations surpassing the superiority of civilizations" were written into the congress report or the newly revised party constitution. This is a brand-new way of thinking of intellectuals since European modernity was copied in the beginning of last century.
The monetary order is already being challenged by de-dollarisation efforts and central bank digital currencies. Since the end of the cold war, the world has largely enjoyed a unipolar era — the US was the undisputed hegemon, globalisation was the economic order and the dollar was the currency of choice. But today, geopolitics once again poses a formidable set of challenges to the existing world order. That means investors have to discount new risks.
In 2011 the U.S. share of global exports was only 13%, today it is 8%. The United States was the source of less than 20% of foreign direct investment, now less than 10%, down from nearly 85% between 1945 and 1980. These two changes are both manifestations of the same fact: the United States has lost almost all its exorbitant privilege.
Li Xiguang: on alternatives to Western Modernity
The speech of Li Xiguang (China), professor of Tsinghua University, director of Tsinghua University International Center for Communication Studies, during the Global Conference on Multipolarity (29.04.2023).
Multi-modernity and Chinese-style modernization
Professor of School of Journalism
Tsinghua University
After the 20th National Congress of the Communist Party of China was held, "Chinese modernity”, “new form of human civilization", "diversity of civilizations", "coexistence of civilizations surpassing the superiority of civilizations" were written into the congress report or the newly revised party constitution. This is a brand-new way of thinking of intellectuals since European modernity was copied in the beginning of last century.
In an era when Western ideology and capitalism are fully infiltrating our lives, Chinese modernity and the new form of civilization are an important step in the production of knowledge of a new modernity.
Since the collapse of the Soviet Union, the United States and the West have been talking that only when China fully accepts Western ideological paradigms can China be qualified to become a member of modern society.
Especially in recent years, the Western media and politicians have joined hands in using racist media language to enhance a totally negative narrative of China. ”By manipulating the agenda of the international community, the West is stepping up its speed in internalizing their ideology in non-Western societies. Any country that deviates from the Western value system, and takes an independent system from the West, it will be labeled as a "rogue nation" or "pariah".
Over the past centuiry, the Communist Party of China has fulfilled its mission, uniting the Chinese people to draw a magnificent picture in the human development on the vast land of China, and made people who have been slaved both physically and mentally by the Western colonialists for more than 100 years stand up with a brand new modernity.
Chinese modernity is defined by maintaining close ties with the people and practicing a people-centered development philosophy.For example, the common prosperity that China has emphasized is in its definition of Chinese modernity. But this key message is not in the mind of the people who hold the banner of Western modernity since European enlightenment.
After more than 40 years of reform and opening up, when we talk about Chinese-style modernization, it is no longer just the four modernizations of industry, agriculture, national defense and science and technology initiated by Premier Zhou Enlai in the 10th National Congress of CPC in 1974 At the 18th National Congress of the Communist Party of China in 2012, Chairman Xi on the basis of summarizing experience and in-depth analysis of the Chinese actual situation, he has formulated a plan for the overall promotion of the new modernization from the five aspects of civilization which include economy, politics, culture, society, and ecology.
The strategic goal of the "five in one" blueprint is a new version of modernity.
China was forced to start its westernization since 1840 But the Chinese modernity proposed by the 20th Party Congress was not only defined in terms of economy and society, but politics, culture, and even ecology. And the standards of the new modernity are localized in China.
Chairman Xi in his report at the 20th Party congress proposed a brand new definition of the socialism with Chinese characterisitc which is a combination of China’s actual national conditions with China's thousands of years of tradition and balue system.
The West inheriting the their colonialist tradition, continue using their colonial mentality to enslave the developing countries economically but also ideologically by "Orientalizing" and "demonizing" southern countries.
Former U.S. Secretary of State Pompeo warned China that to keep China in its proper place. He sounds like a slave owner talking to his slaves.
In the 18th century,Europeans were deeply impressed by the wealth and style of governance of China. In the meantime, the ideas of the British classical economists like Adam Smith were woven into the story of the rise of the West: the concept of capitalist industry is " Progress” while Asia is “backward” and “authoritarian”.
German sociologist Max Weber proposed at the end of the 19th century and the beginning of the 20th century that India and China lacks the cultural values necessary for capitalism. Even so, they can be "modernized," but only through a painful process of cultural transformation, removing their cultural "barriers" to capitalist development.
In the eyes of some historians, Europe has some unrivaled characteristics that make it the first to modernize. Europe thus obtained the morality and power to spread "modernity" to the whole world, while places outside Europe could not produce "modernity" independently due to cultural, political or economic "obstacles".
Many people think that these concepts, especially market capitalism and democracy, can only come from Western civilization.Because of their "perfection",the European civilization is universal, not only for the West, but for everyone.
This way of looking at the rise of the modern world is based on an imagined cultural superiority of the West. Eurocentric thinking represents the soft power of the US and the West, and believes that all advanced and excellent new ideas and practices can only come from the West.
By 2020, the last 6 million poor people in China were lifted out of poverty, and China, the most populous country in the world, have become a society out of poverty.
However, the West never regards poverty alleviation as the goal of human rights, but uses human rights as a political weapon to maintain its ideological and political hegemony in the world, and demonizes countries whose interests may run counter to those of the West.
By wielding the big stick of "human rights", the United States is trying to maintain the political and military alliances of the West, and at the same time engage in large-scale Westernization of ideology and values
around the world. But the Western modernity and neoliberalism are no longer growing. We are witnessing an expansion of Chinese spiritual power. This is a Chinese modernity and a new form of human civilisation.
Read more here.
Great power conflict puts the dollar’s exorbitant privilege under threat
By Zolton Pozsar, Ex Credit Suisse
The monetary order is already being challenged by de-dollarisation efforts and central bank digital currencies. Since the end of the cold war, the world has largely enjoyed a unipolar era — the US was the undisputed hegemon, globalisation was the economic order and the dollar was the currency of choice. But today, geopolitics once again poses a formidable set of challenges to the existing world order. That means investors have to discount new risks.
China is proactively writing a fresh set of rules as it replays the Great Game, creating a new type of globalisation through institutions such as the Belt and Road Initiative, the Brics+ group of emerging economies and the Shanghai Cooperation Organisation, a collective security alliance of eight countries.
While under lockdown, Beijing forged a special relationship with Moscow and Tehran. This relationship with Russia, with the unwitting assistance of global warming, is helping extend China’s BRI through Arctic shipping lanes. And late last year, we saw the very first summit between China and the Gulf Cooperation Council and hence a deepening of China’s ties with Opec+. All of this may eventually lead to “one world, two systems”.
If we are drifting from a unipolar world to this multipolar one, and if the G20 fractures into the camps of the G7 plus Australia, Brics+ and the non-aligned, it’s impossible that these rifts will not affect the international monetary system. Growing macroeconomic imbalances in the US further add to these risks.
The dollar-based monetary order is already being challenged in multiple ways, but two in particular stand out: the spread of de-dollarisation efforts and central bank digital currencies (CBDCs).
De-dollarisation is not a new theme. It started with the launch of quantitative easing in the wake of the financial crisis, as current account surplus countries frowned at the idea of negative real returns on their savings. But recently, the pace of de-dollarisation appears to have picked up.
Over the past year, China and India have been paying for Russian commodities in renminbi, rupees and UAE dirhams. India has launched a rupee settlement mechanism for its international transaction while China asked GCC countries to make full use of the Shanghai Petroleum and Natural Gas Exchange for the renminbi settlement of oil and gas trades over the next three to five years. With the expansion of Brics to beyond Brazil, Russia, India and China, the de-dollarisation of trade flows may proliferate.
CBDCs could accelerate this transition. China has changed the strategy through which it internationalises the renminbi. Given that financial sanctions are implemented through the balance sheets of western banks, and that these institutions form the backbone of the correspondent banking system that underpins the dollar, using the same network to internationalise the renminbi may have come with risks. To get around this, a new network was needed.
Around the world but particularly in the global east and south, CBDCs are spreading like fast-growing kudzu vines with more than half of the world’s central banks exploring or developing digital currencies with pilots or research, according to the IMF. They will be increasingly interlinked. Central banks interlinked through CBDCs essentially recreate the network of correspondent banks that the US dollar system runs on — instead of correspondent banks, think more of correspondent central banks. The emerging, CBDC-based network — enforced with bilateral currency swap lines — could enable central banks in the global east and south to serve as foreign exchange dealers to intermediate currency flows between local banking systems, all without referencing the dollar or touching the western banking system.
Change is already afoot. The current account surpluses of China, Russia and Saudi Arabia are at a record. Yet these surpluses are largely not being recycled into traditional reserve assets like Treasuries, which offer negative real returns at current inflation rates. Instead we have seen more demand for gold (see China’s recent purchases), commodities (see Saudi Arabia’s planned investments in mining interests) and geopolitical investments such as funding the BRI and helping allies and neighbours in need, like Turkey, Egypt or Pakistan. Leftover surpluses are held increasingly in bank deposits in liquid form to retain much-needed options in a changing world.
In finance, everything is about marginal flows. These matter the most for the largest marginal borrower — the US Treasury. If less trade is invoiced in US dollars and there is a dwindling recycling of dollar surpluses into traditional reserve assets such as Treasuries, the “exorbitant privilege” that the dollar holds as the international reserve currency could be under assault.
Read more here.
The Rise and Fall of the Dollar
By Barry Eichengreen
The Counterfeiters, an award-winning German film set in 1940s Europe, opens with the concentration camp survivor Salomon Sorowitsch, played by the Austrian actor Karl Markovics, sitting fully clothed on the beach holding a suitcase full of dollars. The war has just ended, and he intends to put that currency, of dubious provenance, to work on the tables of Monte Carlo. That it is dollars rather than French francs is essential to the authenticity of the scene. In post–World War II Europe it was the dollar, the currency of the only major economy still standing, that people in all countries wanted. Dollars were the only plausible currency that a Holocaust survivor might carry into a casino in 1945.
Fast forward now 50-odd years. In City of Ghosts, a 2002 thriller set in contemporary Cambodia, the hero, a crooked insurance salesman played by Matt Dillon, uses a suitcase full of dollars to ransom his partner and mentor, played by James Caan, who has been kidnapped by business associates. More than half a century of cinematic time has passed and the location is now developing Asia rather than Europe, but the suitcase still contains dollars, not Japanese yen or Chinese renminbi. That any self-respecting kidnapper would expect the ransom to be paid in dollars is so obvious as to go unstated.
The suitcase full of dollars is by now a standard trope of mystery novels and Hollywood screenplays. But this artistic convention reflects a common truth. For more than half a century the dollar has been the world’s monetary lingua franca. When a senator from the Republic of Kalmykia is caught shaking down a Russian airline, he is apprehended with a suitcase containing $300,000 in marked U.S. bills. When Somali pirates ransom a ship, they demand that the ransom money be parachuted to them in dollars. As the Wall Street Journal has put it, “In the black market, the dollar still rules.” The fact that nearly three-quarters of all $100 bills circulate outside the United States attests to the dollar’s dominance of this dubious realm.
But what is true of illicit transactions is true equally of legitimate business. The dollar remains far and away the most important currency for invoicing and settling international transactions, including even imports and exports that do not touch U.S. shores. South Korea and Thailand set the prices of more than 80 percent of their trade in dollars despite the fact that only 20 percent of their exports go to American buyers. Fully 70 percent of Australia’s exports are invoiced in dollars despite the fact that fewer than 6 percent are destined for the United States. The principal commodity exchanges quote prices in dollars. Oil is priced in dollars. The dollar is used in 85 percent of all foreign exchange transactions worldwide. It accounts for nearly half of the global stock of international debt securities. It is the form in which central banks hold more than 60 percent of their foreign currency reserves.
This situation is more than a bit peculiar. It made sense after World War II when the United States accounted for more than half of the combined economic output of the Great Powers. America being far and away the largest importer and main source of trade credit, it made sense for imports and exports to be denominated in dollars. Since the United States was the leading source of foreign capital, it made sense that international financial business was transacted in dollars. And with these same considerations encouraging central banks to stabilize their currencies against the dollar, it made sense that they should hold dollars in reserve in case of a problem in foreign exchange markets.
But what made sense then makes less sense now, when both China and Germany export more than the United States. Today the U.S. share of global exports is only 13 percent. The United States is the source of less than 20 percent of foreign direct investment, down from nearly 85 percent between 1945 and 1980. These two changes are both manifestations of the same fact: the United States is less dominant economically than 50 years ago. This fact reflects the progress of other economies, first Europe, then Japan, and most recently emerging markets like China and India, in closing the per capita income gap. Economists refer to this narrowing as catch-up or convergence. It is entirely natural insofar as there is no intrinsic reason that U.S. incomes and levels of labor productivity should be multiples of those in the rest of the world. This process of catch-up is one of the great achievements of the late twentieth and early twenty-first centuries in that it has begun lifting out of poverty the majority of the world’s population. But it also means that the United States accounts for a smaller share of international transactions. And this fact creates an uneasy tension with the peculiar dominance of the dollar.
This dominance is something from which we Americans derive considerable benefit. An American tourist in New Delhi who can pay his cab driver in dollars is spared the inconvenience of having to change money at his hotel. The widespread international use of the dollar is similarly an advantage for American banks and firms. A German company exporting machine tools to China and receiving payment in dollars incurs the additional cost of converting those dollars into euros, the currency it uses to pay its workers and purchase its materials. Not so a U.S. exporter of machine tools. Unlike firms in other countries, the U.S. producer receives payment in the same currency, dollars, that it uses to pay its workers, suppliers, and shareholders.
Similarly, a Swiss bank accepting deposits in francs but making foreign loans in dollars, since that’s what its customers want, has to worry about the risk to its profits if the exchange rate moves.5 That risk can be managed, but doing so is an added cost of business. Our Swiss bank can protect itself by buying a forward contract that converts the receipts on its dollar loan into francs when the loan matures, at a rate agreed when the loan is made. But that additional transaction has an additional cost. American banks that make foreign loans in dollars as well as taking deposits in dollars are spared the expense of having to hedge their foreign currency positions in this way.
A more controversial benefit of the dollar’s international-currency status is the real resources that other countries provide the United States in order to obtain our dollars. It costs only a few cents for the Bureau of Engraving and Printing to produce a $100 bill, but other countries have to pony up $100 of actual goods and services in order to obtain one. (That difference between what it costs the government to print the note and a foreigner to procure it is known as “seignorage” after the right of the medieval lord, or seigneur, to coin money and keep for himself some of the precious metal from which it was made.) About $500 billion of U.S. currency circulates outside the United States, for which foreigners have had to provide the United States with $500 billion of actual goods and services.
more important is that foreign firms and banks hold not just U.S. currency but bills and bonds that are convenient for international transactions and at the same time have the attraction of bearing interest. Foreign central banks hold close to $5 trillion of the bonds of the U.S. treasury and quasi- governmental agencies like Fannie Mae and Freddie Mac. They add to them year after year.
And insofar as foreign banks and firms value the convenience of dollar securities, they are willing to pay more to obtain them. Equivalently, the interest rate they require to hold them is less. This effect is substantial: the interest that the United States must pay on its foreign liabilities is two to three percentage points less than the rate of return on its foreign investments.7 The U.S. can run an external deficit in the amount of this difference, importing more than it exports and consuming more than it produces year after year without becoming more indebted to the rest of the world. Or it can scoop up foreign companies in that amount as the result of the dollar’s singular status as the world’s currency.
This has long been a sore point for foreigners, who see themselves as supporting American living standards and subsidizing American multinationals through the operation of this asymmetric financial system. Charles de Gaulle made the issue a cause célèbre in a series of presidential press conferences in the 1960s. His finance minister, Valéry Giscard d’Estaing, referred to it as America’s “exorbitant privilege.”
Not that this high-flown rhetoric led to changes in the actual existing system. In international finance as in politics, incumbency is an advantage. With other countries doing the bulk of their transactions in dollars, it was impossible for any individual country, even one as critical of America’s exorbitant privilege as France, to move away from the currency. And what was true in the 1960s remained true for the balance of the twentieth century.
But today, in the wake of the most serious financial crisis in 80 years, a crisis born and bred in the United States, there is again widespread criticism of America’s exorbitant privilege. Other countries question whether the United States should have been permitted to run current account deficits approaching 6 percent of GDP in the run-up to the crisis. Emerging markets complain that as their economies expanded and their central banks felt compelled to augment their dollar reserves, they were obliged to provide cheap finance for the U.S. external deficit, like it or not. With cheap foreign finance keeping U.S. interest rates low and enabling American households to live beyond their means, poor households in the developing world ended up subsidizing rich ones in the United States. The cheap finance that other countries provided the U.S. in order to obtain the dollars needed to back an expanding volume of international transactions underwrote the practices that culminated in the crisis. The United States lit the fire, but foreigners were forced by the perverse structure of the system to provide the fuel.
If this was not injustice enough, there is the fact that America’s international financial position was actually strengthened by the crisis. In the course of 2007 the dollar weakened by about 8 percent on the foreign exchange market.8 But since our debts are denominated in our own currency, there was no impact on their dollar value. In contrast, our foreign investments, whether in bonds or factories, became more valuable as the dollar fell. The interest and dividends they threw off were worth more when converted back into dollars.
The dollar’s depreciation thereby improved the U.S. external position by almost $450 billion.10This largely off set the increase in U.S. indebtedness to the rest of the world that would have otherwise resulted from our $660 billion current account deficit. It was almost enough to keep our debts to other countries stable, despite our consuming 6 percent more than we produced. Then in 2008, in the throes of the most serious financial crisis in 80 years, the federal government was able to borrow vast sums at low interest rates because foreigners figured that the dollar was the safest
currency to be in at a time of great turmoil. And again in the spring of 2010, when financial volatility spiked, investors fled into the most liquid market, that for U.S. treasury bonds, pushing down the cost of borrowing for the U.S. government and, along with it, the mortgage interest rates available to American households. This is what exorbitant privilege is all about.
But now, as a result of the financial mismanagement that spawned the crisis and growing dissatisfaction with the operation of the international monetary system, the dollar’s singular status is in doubt. The U.S. government has not been a worthy steward of an international currency, its critics complain. It looked the other way while the private sector produced the mother of all financial crises. It ran enormous budget deficits and incurred a gigantic debt. Foreigners have lost faith in the almighty dollar. They are moving away from it as a unit in which to invoice and settle trade, denominate commodity prices, and conduct international financial transactions. The dollar is at risk of losing its exorbitant privilege to the euro, the renminbi, or the bookkeeping claims issued by the International Monetary Fund known as Special Drawing Rights (SDRs).
Or so it is said. It is said by no less an authority than Sarah Palin on her Facebook page, who warned in October 2009 that talk that the Gulf countries might shift to pricing oil in a basket of currencies “weakens the dollar and renews fears about its continued viability as an international reserve currency.”
That this issue has flashed across the radar screens of politicians who are not exactly renowned for their financial expertise reflects the belief that larger things are at stake. It is thought that widespread international use of a currency confers on its issuer geopolitical and strategic leverage. Because the country’s financial position is stronger, its foreign policy is stronger. Because it pays less on its debts, it is better able to finance foreign operations and exert strategic influence. It does not depend on other people’s money. Instead, it has leverage over other countries that depend on its currency. Compare the nineteenth century, it is said, when Britannia ruled the waves and the pound dominated international financial markets, with the post–World War II period, when sterling lost its dominance and the United States, not Britain, called the foreign-policy shots.
Were all this right, there would have been no reason for me to write this book or for you to read it. In fact, however, much of what passes for conventional wisdom on this subject is wrong. To start, it has cause and effect backward. There may be an association between the economic and military power of a country and the use of its currency by others, but it is a country’s position as a great power that results in the international status of its currency. A currency is attractive because the country issuing it is large, rich, and growing. It is attractive because the country standing behind it is powerful and secure. For both reasons, the economic health of the country issuing the currency is critical for its acquisition and retention of an international role.
But whether its currency is used internationally has at best limited implications for a country’s economic performance and prospects. Seignorage is nice, but it is about number 23 on the list of factors, ranked in descending order of importance, determining the place of the United States in the world. That said, how the country does economically, and whether it avoids policy blunders as serious as those that led to the financial crisis, will determine the dollar’s fate. Sterling lost its position as an international currency because Britain lost its great-power status, not the other way around. And Britain lost its great-power status as a result of homegrown economic problems.
The conventional wisdom about the historical processes resulting in the current state of affairs— that incumbency is an overwhelming advantage in the competition for reserve currency status—is similarly wrong. It is asserted that the pound remained the dominant international currency until after World War II, long after the United States had overtaken Britain as the leading economy, reflecting those self-same advantages of incumbency. In fact, the dollar already rivaled sterling as an international currency in the mid-1920s, only 10 short years after the establishment of the Federal Reserve System. It did so as a result of some very concrete actions by the Fed to promote the dollar’s international role. This fact has very different implications than the conventional wisdom for how and when the Chinese renminbi might come to rival the dollar. It suggests that the challenge may come sooner rather than later.
Finally, the idea that the dollar is now doomed to lose its international currency status is equally wrong. The dollar has its problems, but so do its rivals. The euro is a currency without a state. When the euro area experiences economic and financial problems, as in 2010, there is no powerful executive branch with the power to solve them, only a collection of national governments more inclined to pander to their domestic constituencies. The only euro-area institution capable of quick action is the European Central Bank. And if quick action means printing money to monetize government debts, then this is hardly something that will inspire confidence in and international use of the euro. The renminbi, for its part, is a currency with too much state. Access to China’s financial markets and international use of its currency are limited by strict government controls. The SDR is funny money. It is not, in fact, a currency. It is not used to invoice and settle trade or in private financial transactions. As a result, it is not particularly attractive for use by governments in their own transactions.
The United States, whatever its other failings, is still the largest economy in the world. It has the largest financial markets of any country. Its demographics imply relatively favorable growth prospects.
But the fundamental fallacy behind the notion that the dollar is engaged in a death race with its rivals is the belief that there is room for only one international currency. History suggests otherwise. Aside from the very peculiar second half of the twentieth century, there has always been more than one international currency. There is no reason that a few years from now countries on China’s border could not use the renminbi in their international transactions, while countries in Europe’s neighborhood use the euro, and countries doing business with the United States use the dollar. There is no reason that only one country can have financial markets deep and broad enough to make international use of its currency attractive. There may have been only one country with sufficiently deep financial markets in the second half of the twentieth century, but not because this exclusivity is an intrinsic feature of the global financial system.
The world for which we need to prepare is thus one in which several international currencies coexist. It was with this world in mind that the euro was created. A world of several international currencies is similarly what China is after. China has no interest in “dethroning” the dollar. To the contrary, it has too much invested in the greenback. But preserving its investment in the dollar is entirely compatible with creating a more consequential international role for its own currency. And where the renminbi leads, other emerging market currencies, such as the Indian rupee and Brazilian real, could eventually follow.
Serious economic and financial mismanagement by the United States is the one thing that could precipitate flight from the dollar. And serious mismanagement, recent events remind us, is not something that can be ruled out. We may yet suffer a dollar crash, but only if we bring it on ourselves. The Chinese are not going to do it to us.
But this is to get ahead of the story.
Read more here.
Obstacles in US-Cambodia Relations and Future Directions
By Dr. Seun Sam, Political Analyst, Royal Academy of Cambodia
Currently, there is some tension in the relationship between Cambodia and the US. The two nations have historically had a difficult relationship, especially during the Vietnam War and the Khmer Rouge regime in Cambodia. The human rights record and ties between China and Cambodia have drawn concern from the US. The relationship between the US and Cambodia has recently been damaged by a number of factors. The issues that have arisen in relations between Cambodia and the US are outlined below.
Political repression: The Cambodian government has been accused of suppressing the opposition and civil society. The dissolution of the main opposition party, the Cambodia National Rescue Party, ahead of the 2018 general election created widespread concerns about the democratic process in Cambodia. The US and EU countries had strongly expressed their reactions toward Cambodian Government while Cambodian Government under the leadership of prime minister Hun Sen claimed that Cambodia just followed throughs its national laws to protect security and stability as well as peace in Cambodia.
Human rights abuses: There have been reports of human rights violations, including extrajudicial killings, torture and arbitrary detentions, which have been criticized by the US government and human rights organizations but Cambodian Government has repeatedly claimed that the US government and NGOs that work on human rights issues are strongly biased against Cambodia and they do not clearly understand about Cambodia, they just write what they want to write in order to defame Cambodia.
Tariffs: In 2019, Cambodia was hit with tariffs on some of its exports to the US, such as garments and footwear, amid concerns about labor rights violations and trade imbalances. Under Biden’s administration the US Government does not resume its GSP for Cambodia at all.
Chinese influence: According to the US government, Cambodia has become more and more reliant on China for political and economic support, which some believe could jeopardize US strategic interests in the region. The US government is concerned about Cambodia becoming too close to China while ignoring Cambodia's needs. Instead of sitting back and criticizing Cambodia for moving closer to China, the US administration should support Cambodia and recognize the requirements of Cambodia in every situation.
South China Sea disputes: Cambodia has been criticized for its alignment with China in territorial disputes in the South China Sea, which has put it at odds with some of its ASEAN neighbors and the US. Each related country in ASEAN just cares about their own benefits and they want to push Cambodia to be in trouble with China while they also could not tackle the issues related to the South China Sea Issue.
These issues above have contributed to a tense relationship between the two countries, although there have been attempts to improve ties, such as the recent appointment of a new US ambassador to Cambodia. Prime Minister Hun Sen of Cambodia sometime said that Cambodia really wants to have a smooth relation with the US but the US does not give their hands to Cambodia and there are too many conditions for Cambodia only just to be a good friend with the US.
Improving US-Cambodian relations can be a complex task that requires a range of approaches to address the underlying issues that have led to tensions between the two countries. Here are some potential strategies that could be pursued to improve relations between the two countries.
Strengthen diplomatic ties: Cambodia and the United States have a history of diplomatic cooperation, and it is important to maintain and strengthen these ties. Leaders from both countries should engage in regular high-level diplomatic meetings to discuss shared interests and areas of disagreement. There should have a face-to-face discussion when there is a tension between the two countries, the role of media is very important but having verbal discussion should be the first priority.
Increase economic cooperation: Increased economic cooperation can help to improve relations by building a stronger foundation of shared interests and mutual dependency. The US could explore opportunities to invest in Cambodia's infrastructure, particularly in rural areas where development is needed most. Similarly, Cambodia could work on improving its investment climate to attract more US businesspeople. For many times the US Ambassador to Cambodia has mentioned about improving Cambodia’s business law. Cambodian government should look within to find its weaknesses before calling for foreign investors to invest in Cambodia because foreign investors have always searched for information and atmosphere of the country where they will come to make business.
Address human rights concerns: The US has criticized Cambodia's government for its suppression of the press and opposition parties. In order to improve relations, Cambodia could take steps to improve its human rights record, lifting restrictions on the media, and enabling civil society organizations to operate freely through the laws of Cambodia. There is always a problem in every step but keeping some space for those who have different ideas from the Government is also important for Cambodia to attract foreign governments to think positively about Cambodia.
Increase people-to-people exchanges: Building relationships between the peoples of the two countries can help to foster greater understanding and trust. The US and Cambodia could work together to increase opportunities for cultural exchanges, educational programs and tourism. The future prime minister of Cambodia gained education in the US, the US should be proud of those who gained education in the US and then return home to work in the important position.
In order to discover workable solutions to bolster their ties, it is crucial that both the US and Cambodia approach their relationship with mutual respect and a desire to participate in productive discourse. Understanding one another's cultures, political systems, geopolitical contexts, and needs is crucial to enhancing relations between the US and Cambodia. Sincere dialogue and face-to-face interaction are the cornerstones of appreciating one another's differences.
Read more here.