China was ranked first in terms of foreign direct investment (FDI) equity inflows to Cambodia in the first half of this year, at about $2 billion, according to the Chinese ambassador.
Speaking in a recent interview with Bayon Television (BTV), Wang Wentian said major projects invested by Chinese companies include the Phnom Penh-Sihanoukville Expressway, a coal-fired power station in Preah Sihanouk province and the Siem Reap-Angkor International Airport.
“Practical cooperation in all fields between the two sides has been deepened and played an active role in the Cambodian economy, overcoming the effects of the Covid-19 virus,” he said, stressing that the Chinese side is “pleased to continue to strengthen practical cooperation with Cambodia in all areas to help revive its economy”.
Royal Academy of Cambodia economic researcher Hong Vanak pointed out that Chinese FDI stock dipped year-on-year, but represented a greater share of total inflows last year than in 2019.
According to the Council for the Development of Cambodia (CDC), China accounted for 69 per cent of total FDI stock.
Vanak told The Post that a good number of projects are pending an injection of funds, or have yet to begin to fully take form. He suggested that investors at other ventures could have just started to look for partners who may be interested in investing in the Kingdom.
“We believe that the Chinese investment comes due to the good relations between the Cambodian and Chinese governments.
“However, investment is still limited because the investment values are only on paper. The actual disbursements won’t match the [total amount of capital registered], so there’ll be no crisis caused by overwhelming Chinese investment,” he claimed.
The Cambodia-China Free Trade Agreement (CCFTA) was signed by Minister of Commerce Sorasak and his Chinese counterpart Zhong Shan via video link on October 12, with Prime Minister Hun Sen and Chinese foreign minister Wang Yi as witnesses.
The Cambodian commerce ministry previously said the CCFTA would provide the Kingdom duty-free access to over 300 items. China would grant duty-free status to 95 per cent of agricultural imports from Cambodia, it said.
Ministry spokesman Seang Thay told The Post early this month that once the CCFTA is ratified by both countries, Cambodia expects to receive a litany of benefits, such as access to a wider market.
He noted, however, that China will accord duty-free status to more imports from Cambodia than the Kingdom will to those from the East Asian economy.
Other perks include a freer flow of goods and additional opportunities to attract foreign investment to Cambodia, as well as a shot in the arm for Cambodian agricultural exports to the Chinese market, he said.
“This agreement will play a large role in stimulating domestic production, especially in some agricultural segments such as bananas, mangoes, cassava, longan, cashew nuts and so on,” Thay said.
Cambodia and China plan to boost bilateral trade to $10 billion by 2023.
Bilateral trade between Cambodia and China surged 1.4 per cent last year over 2019, to $9.56 billion, according to the ambassador.
And according to the CDC, Cambodia approved 87 new investment projects and expansions of existing ones, worth more than $2.96962 billion.
