[Vietnamization: China responds] China forgives $90 million debt owned by Cambodia

Cambodian Prime Minister Hun Sen, left, shakes hands with Chinese President Xi Jinping, right, before a meeting at the Peace Palace, in Phnom Penh, Cambodia, Thursday, Oct. 13, 2016. Xi is on a state visit to strengthen the relationships between the two countries and to witness the agreements to be signed. (AP Photo/Heng Sinith)

China forgives $90 million debt owned by Cambodia

AP / Yahoo News | 13 October 2016

PHNOM PENH, Cambodia (AP) — China has canceled a 600 million yuan ($90 million) debt that Cambodia owed it last year, and will provide an additional 100 million yuan ($15 million) to Cambodia's defense ministry, in further signs of deepening relations between the two countries.

The announcements were made Thursday during Chinese President Xi Jinpeng's first visit to Cambodia. A total of 31 agreements were signed during the visit, which started Thursday, said Eang Sophalleth, a spokesman for Cambodian Prime Minister Hun Sen.

He said Xi told Hun Sen that he was canceling the 600 million yuan debt, and that the two countries agreed to expand trade from the current $4.4 billion to $5 billion in 2017. The Chinese president also assured Hun Sen that he will encourage Chinese people to visit Cambodia, boosting the number of visitors from around 700,000 now to 2 million by 2020.

Hun Sen thanked China for its support, he said.

"The development of Cambodia cannot have happened without help from China," he quoted Hun Sen as saying. Hun Sen asked for more support, especially in defense, investment, health care and infrastructure.

Sophalleth said Xi promised to convince Chinese companies to help Cambodia in building a new airport in Siem Reap province and a new railway.

The spokesman refused to say if the two leaders talked about territorial disputes in the South China Sea.

China is a key ally and economic partner of impoverished Cambodia. It has provided millions of dollars in aid and investment over the past decade, granted it tariff-free status on hundreds of trade items and written off debt.

In return, Cambodia supports China in international forums, including in Beijing's ongoing dispute with other Southeast Asian countries in the South China sea.

In July, China provided Cambodia with nearly $600 million in aid to support the country's election infrastructure, education and health.

China's influence in Cambodia is considerable despite Beijing's strong backing of the former Khmer Rouge government that caused the deaths of some 1.7 million Cambodians in the late 1970s.