PHNOM PENH: Cambodia has been experiencing strong economic growth for many years. As the economy grows, the country needs to increase its production capacity and attract investment. China is the largest investor in Cambodia, and its investments have played a significant role in the country’s economic development.
H.E. Ky Sereyvath, an economics expert and the Director-General of the Institute of China Studies at the Royal Academy of Cambodia, recently highlighted several significant reasons why Chinese investment has played such an important role in Cambodia’s growth, both in the past and in the future.
Power assistance
China has been investing in Cambodia’s energy sector for many years. From 2006 to 2022, China’s total investment in the energy sector reached $6.6 billion, which accounts for 30% of China’s total investment in Cambodia. These investments have helped to improve Cambodia’s power generation capacity and ensure a stable supply of electricity.
Infrastructure assistance
China has also provided significant assistance to Cambodia in the development of its infrastructure. From 2006 to 2022, China’s total investment in Cambodia’s infrastructure sector reached $7.4 billion. This investment has helped to build roads, bridges, airports, and other essential infrastructure that has improved Cambodia’s connectivity and transportation network.
Real estate investment
China has also invested in Cambodia’s real estate sector. From 2006 to 2022, China’s total investment in the real estate sector reached $1.57 billion. This investment has helped to develop new housing and commercial properties, which has boosted economic activity and created jobs.
The need for regulation
While China’s investment has been beneficial to Cambodia’s economic development, there have been some concerns about the impact of Chinese investment in certain sectors, such as real estate. In 2019, there was a surge in Chinese investment in Sihanoukville, which led to a sharp rise in land prices and concerns about the displacement of local residents.
In response to these concerns, the Cambodian government has taken steps to regulate foreign investment, including requiring foreign investors to obtain a license before investing in certain sectors. The government is also working to develop a law that would protect the rights of local workers and businesses.
The importance of foreign investment
Despite some concerns, foreign investment remains essential for Cambodia’s economic development. Foreign investors bring with them capital, technology, and expertise that can help to boost economic growth and create jobs. The Cambodian government is committed to attracting foreign investment and ensuring that it benefits the entire population.
