China is still the leading source of foreign direct investment (FDI) into Cambodia, reaching $3.594 billion last year, Minister of Commerce Pan Sorasak said at the 16th China-Asean Expo on Saturday.
During the 3rd China-Asean Business Leaders’ Forum at the expo, which is being held in Nanning, Guangxi Zhuang Autonomous Region in southern China beween September 21-24, Sorasak said Chinese FDI inflow to Cambodia continues to increase from year to year.
Sorasak said good Sino-Cambodian bilateral cooperation has boosted trade, investment, tourism, diplomacy and relations between the people of the two countries, which have grown steadily.
The minister said bilateral trade volume between the two countries last year was about $6.457 billion.
For five straight years between 2013 and 2017, China has been Cambodia’s largest foreign direct investor, with investment capital of $5.3 billion, or about $1 billion annually, according to 2018 figures from the Cambodia Investment Board at the Council for the Development of Cambodia (CDC).
According to the findings carried out in 2016 by the National Bank of Cambodia and the National Institute of Statistics, China was the biggest investor in Cambodia between 1994 and 2014, accounting for up to 44 per cent of the $19.2 billion in FDI.
Total investment in Cambodia nearly doubled to $6.3 billion in 2017, up from $3.6 billion in 2016, CDC data shows.
Cambodia Chamber of Commerce vice-president Lim Heng said Chinese investment in the Kingdom has shown strong growth since 2016 and has greatly benefited the Kingdom, particularly by creating thousands of new jobs.
He said Cambodia has been reducing complicated procedures and cutting various fees to attract foreign investors to the Kingdom.
“With the Chinese government’s [Belt and Road Initiative], I am confident that Chinese investment in Cambodia will continue to grow further in 2019,” he said.
Sorasak said the Chinese were investing in key Cambodian sectors including garments, construction, electricity, rice milling, agribusiness, mining and energy, coal and tourism.
Of these, construction is attracting the largest amount of Chinese investments, with each project worth hundreds of millions of dollars.
Globally, China has been a major driver of real estate capital flows. CBRE Research data shows that Chinese outbound investment in real estate rose from $8 billion in 2013 to just under $35 billion in 2017.
Cambodia Constructors Association general manager and secretary Chiv Sivpheng said the Kingdom’s construction sector growth currently comes from a lot of Chinese investment. He said the inflow of FDIs could help boost the economy.
“With political stability and economic growth, the construction sector will continue to grow stronger in the future.
“The funds from Chinese investors not only help create new jobs for Cambodians but also helps the government to gain tax revenue,” he said.
