Speaking during a meeting in Phnom Penh with a Chinese business delegation comprised of 12 companies this week, PM Hun Manet welcomed the interest of Chinese businesspeople in investing in the kingdom, according to a news release from the prime minister’s spokesperson unit.

He said that Cambodia has prioritized investments in clean energy, environmental protection, health, agriculture, industry, and finance, among others.

He encouraged the Chinese delegation to discuss with relevant ministries and institutions, especially with the Council for the Development of Cambodia, to gain deeper insights into Cambodia’s investment potential.

China is the largest investor and trading partner of Cambodia.

Neak Chandarith, director of the Cambodia 21st Century Maritime Silk Road Research Center, said Chinese-funded enterprises have played an important role in helping boost Cambodia’s economy and improving local people’s livelihoods.

“Chinese-invested mega-projects under the Belt and Road Initiative (BRI) such as the Sihanoukville Special Economy Zone, hydropower plants, Phnom Penh-Sihanoukville Expressway, the Siem Reap Angkor International Airport, roads, and bridges, among others, have played and will continue to play a crucial role in supporting the kingdom’s economy,” he told Xinhua.

He said the flagship BRI projects here would help Cambodia achieve its ambitious goals of becoming an upper-middle income country by 2030 and a high-income country by 2050. Xinhua

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China remains the dominant investor in Cambodia, contributing 68% of the total investment capital. This strong economic partnership is underpinned by bilateral trade agreements and the Regional Comprehensive Economic Partnership (RCEP).

While Chinese investment leads the pack, local investors also played a significant role, contributing 14.25% to the overall investment. Other key investors include Singapore, Vietnam, and the Philippines.

The CDC’s approval of these projects underscores Cambodia’s attractive business climate and growth potential. The government’s proactive approach to investor attraction and business environment improvement has been instrumental in this success.

This surge in investment is reflected in the broader economic landscape. Cambodia attracted a staggering US$3.25 billion in fixed-asset investment during the first half of 2024, a 195% increase compared to the same period last year.

These developments position Cambodia as a promising investment destination and contribute to its overall economic growth.

Editor’s Opinion:

The surge in foreign investment into Cambodia, particularly from China, is undoubtedly a positive development. It promises to create jobs, stimulate economic growth, and elevate Cambodia’s standing on the global investment stage. The government’s efforts to foster a business-friendly environment are commendable and deserve recognition.

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This builds on their existing Comprehensive Strategic Partnership and Diamond Cooperation framework. These corridors aim to boost Cambodia’s socio-economic development.

A High-Level Meeting Signals Strong Chinese Interest

HE Chea Vuthy, Secretary General of Cambodia Investment Board (CIB) of the Council for Development of Cambodia (CDC), recently met with a delegation of 40 Chinese companies. This second meeting in just three months highlights China’s growing interest in investing in Cambodia’s textile industry, including garments, footwear, and materials.

Cambodia’s Investment Advantages Attract Chinese Capital

The Secretary General emphasized Cambodia’s attractive investment environment, citing a decade of increasing Chinese investment and trade. Cambodia’s peace, political stability, and investment-friendly laws have positioned it as the top recipient of foreign investment in the first half of 2024.

Cambodia Offers Established Infrastructure and Investment Zones

The meeting also showcased Cambodia’s existing industrial base. The country boasts 44 Special Economic Zones (SEZs), with 28 already operational. Established industries include car tires, electronics, furniture, and more, offering opportunities for cluster investments.

China’s Investment and Aid Fuel Cambodian Growth

The delegation leader expressed strong interest in investing in Cambodia. This aligns with China’s significant contributions, over US$1.3 billion invested in Cambodia during the first half of 2024, ranking them second overall. There were also over US$3 billion in concessional loans and grant aids, funding critical infrastructure projects like roads and bridges.

Cambodia Encourages Sustainable Investment Practices

The Secretary General encouraged the companies to consider establishing industrial zones with complete production chains, catering to domestic, regional, and global markets. He also emphasized the importance of using clean energy to protect the environment.

This meeting exemplifies the deepening economic partnership between Cambodia and China. The establishment of corridors and China’s continued investment hold promise for Cambodia’s socio-economic development.

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Experts point to the strong relationship between Cambodia and China as a key factor. Keo Piseth, a social observer and political science Ph.D. candidate, highlights the “steel friend” partnership and Cambodia’s strategic location in Southeast Asia as attractive to Chinese investors. Additionally, the Cambodia-China Free Trade Agreement (CCFTA) is seen as a significant boost.

“Through good relations between China and Cambodia, China has acted as a contributor, an essential element in driving Cambodia’s economic growth,” said Piseth. He views this assistance from a friendly nation positively.

China is also Cambodia’s leading trade partner, with a volume exceeding $12 billion in 2023. However, Piseth raises a concern about the trade balance, with Cambodia exporting significantly less than it imports from China. He hopes China will help Cambodia increase its exports.

Economist Dr. Ky Sereyvath, President of the Chinese Studies Institute of the Royal Academy of Cambodia, emphasizes the “diamond-hexagon” cooperation model, signifying collaboration in six key areas. This partnership, he believes, has created jobs in manufacturing and tourism, contributing to Cambodia’s economic growth.

The Council for the Development of Cambodia (CDC) confirmed that Chinese investment accounted for nearly 50% of the total capital in May 2024. This investment, along with domestic investment, has created over 15,000 jobs through new and expanded projects.

Cambodia’s economic landscape is increasingly shaped by Chinese investment. With strong political ties and trade partnerships, this trend is likely to continue. However, experts highlight the need to address the trade imbalance and ensure long-term benefits for both nations. (CAMCCJA)

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Secretary General warmly received the delegation, acknowledging their long-term presence in Cambodia’s infrastructure sector. He emphasized the flourishing economic relations between China and Cambodia, particularly between Zhejiang Province and the Kingdom. He highlighted this growth as a reflection of strong ties between Chinese businesses and the Cambodian government, acting as a catalyst for increased Chinese investment.

HE Vuthy encouraged the delegation to consider expanding their investments beyond infrastructure. He suggested exploring raw material and semi-finished product production to reduce import reliance and tap into regional and global markets through partnerships with Zhejiang companies.

The delegation expressed gratitude for the meeting and acknowledged Cambodia’s progress, viewing it as a driver for diversifying and strengthening their investment portfolio in the country.

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The discussion, held at the headquarters of the Council for the Development of Cambodia (CDC) on April 9, saw participation from H.E. SUN Chanthol, Deputy Prime Minister and First Vice President of the CDC, Mr. Hong Kian Lim, CEO of Surbana Jurong (SJ) Group of Singapore, and Mr. Yang. According to Mr. Yang, Manhattan SEZ intends to collaborate with major companies like SJ Group and Suzhou Industrial Park in China.

H.E. SUN Chanthol welcomed the investment plans and reassured that the CDC would facilitate all investments following Cambodian laws and regulations.

Lor Vichet, Vice President of the Cambodia-Chinese Commerce Association (CCCA), provided valuable insights into the two levels of national mechanisms for Chinese investments in Cambodia.

The first level operates on an intergovernmental level, requiring agreements between government representatives from both countries. An intergovernmental coordinating committee was established to oversee such agreements.

The second level functions on a broader scale, involving collaboration between Cambodia’s National Assembly and China’s National People’s Congress (NPC). Here, the focus lies on establishing interconnected laws and achieving consensus on implementing joint legal documents aligned with shared development goals, echoing the “Common Prosperity and Common Destiny” vision.

Vichet further explained that when the heads of China’s Communist Party and NPC agree to invest in priority sectors, broad-based support and consensus from both the party and the congress pave the way for project implementation.

This openness to collaboration is reflected in the CDC’s approval of 173 investment projects worth some US$4 billion during the last six months, from September 2023 to February 2024.

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Sok Siphana, a senior minister and chairman emeritus of the Board of Directors of the Asian Vision Institute, said 2024 is the year to implement the China-Cambodia community with a shared future in the new era and the China-Cambodia People-to-People Exchange Year.

“China-Cambodia economic and trade cooperation will continue to deepen and become a driving force for the China-Cambodia economy as well as an important driving force for sustainable social development,” he told Xinhua in a recent interview.

“The potential of China-Cambodia tourism cooperation will continue to be better explored, and Cambodia’s infrastructure investment will achieve a higher growth,” he added.

Siphana said the construction of the “Industrial Development Corridor” and the “Fish and Rice Corridor” will achieve new developments.

He said Cambodia’s economic growth is expected to rebound to 5.8 percent in 2024, citing a World Bank’s recent report.

The senior minister said Cambodia and China had achieved good results in their trade and investment ties in 2023 amid declining global demand, saying that the two-way trade increased last year, as China’s investment in Cambodia accounted for 66 percent of the kingdom’s foreign investment sources.

He said China had been Cambodia’s largest trading partner for 12 consecutive years and remained the Southeast Asian country’s biggest source of foreign direct investment.

Siphana said the formal entry into force of the China-Cambodia Free Trade Agreement and the Regional Comprehensive Economic Partnership Agreement (RCEP) have injected vitality into the continued growth of the bilateral trade volume.

According to him, Cambodia’s rice, cassava, bananas, mangoes, longans, peppers, and other categories of high-quality agricultural products are approved to be exported to China.

Durians and bird’s nest are currently undergoing market access assessment, he said, adding that China has become the largest export market for Cambodian bananas and longans.

Siphana said Cambodia is committed to maintaining its high-level diplomacy with China and supporting the Belt and Road Initiative (BRI).

“The BRI is an important factor in attracting more Chinese investment,” he said.

The senior minister added that the BRI is deeply aligned with the first phase of Cambodia’s Pentagonal Strategy, enriching the “Diamond Hexagon” cooperation framework between the two countries, as well as playing an important role in Cambodia’s economic development and improvement of people’s livelihood.

He highlighted flagship BRI projects in the kingdom, including the Siem Reap Angkor International Airport officially launched last November, the Phnom Penh-Sihanoukville Expressway formally put into operation in November 2022, and the ongoing construction of the second expressway from Phnom Penh to Bavet.

“A large number of infrastructure projects such as roads, bridges, airports, and ports implemented by Chinese-funded enterprises have promoted Cambodia’s economic development and connectivity,” Siphana said.

He added that the construction of hydropower stations and transmission grids invested by China, the construction of multiple industrial parks such as the Sihanoukville Special Economy Zone, and the construction of car tire and cement plants have improved the level of industrialization in Cambodia and created a large number of jobs and tax revenues for the kingdom.

“Investments from Chinese technology companies have also expanded Cambodia’s digital economy and green economy,” he said. “China and Cambodia have achieved outstanding results in jointly building a high-quality, high-level, and high-standard community with a shared future.

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The request was made by the minister, H.E. Dith Tina, during a meeting with a delegation of Chinese investors, here at the ministry’s office this morning.

H.E. Dith Tina affirmed that the ministry is ready to cooperate and coordinate with Chinese investors wishing to invest in the country.

The minister underlined that Cambodia needs upstream investment such as processing and packaging of agricultural products, especially rice, cashew, rubber, freshwater, and aquaculture products, as well as other potential agricultural products, for export to China and international markets.

He also laid stress on priority policies of the 7th-mandate Royal Government in the agriculture field, focusing on building modern agricultural communities and deployment of agriculture officials to communes across the country.

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On Thursday, November 30, 2023, Hainan Taste King Investment Group Holdings Co., Ltd., led by Ms. Luo Lihua, Secretary of the Board of Directors and Associates, paid a visit to the Council for the Development of Cambodia (CDC) to explore investment opportunities in the country.

The company, which specializes in planting, processing, and selling areca nuts, expressed interest in collaborating with Cambodian partners to establish areca nut plantations and processing facilities. They also aim to export Cambodian-grown areca nuts to the Chinese market and other international destinations.

H.E. Yun Heng, Deputy Secretary-General of the Board of Investment of Cambodia, welcomed the company’s interest and highlighted Cambodia’s open, transparent, and predictable investment laws.

He encouraged the company to engage with the Cambodian Chamber of Commerce and the Cambodian Oknha Association (COA) to identify potential investment partners.

The CDC pledged its full support to Hainan Taste King Investment Group Holdings Co., Ltd.’s investment endeavors and expressed its commitment to facilitating the company’s success in Cambodia.

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Samdech Vibol Sena Pheakdei Say Chhum, President of the Cambodian Senate, and visiting H.E. Ms. Shen Yueyue, Vice Chairperson of Chinese People’s Political Consultative Conference (CPPCC) National Committee, made the remarks during their meeting at the Senate Palace in Phnom Penh on Nov. 23.

The two sides shared the same idea that the two countries are good brothers, good friends, good partners, and good neighbors with good cooperation in all fields.

Samdech Say Chhum reiterated Cambodia’s irreversible adherence to the “One China Policy”, and thanked the Government and people of China for their assistance in the socio-economic development of Cambodia.

Both sides also praised broader and deeper ties of friendship, solidarity, and comprehensive strategic partnership of cooperation between the two countries, as well as the implementation of the cooperation framework of the high-quality, high-level, and high-standard Community of Common Destiny and diamond cooperation in the six priority areas agreed upon by the leaders of the two countries.

For her part, H.E. Ms. Shen Yueyue lauded the rapid progress of Cambodia and reaffirmed China’s readiness to boost its cooperation with the Kingdom to strengthen political trust and practical development.

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