The Council for the Development of Cambodia (CDC) approved 44 new and expansion projects worth $386 million in July. CDC
The Chinese topped Cambodia’s list of leading financiers in July, taking part in nearly 45 new and expansion investment projects, with many in the garment sector.
According to a report released by the Council for the Development of Cambodia (CDC) on August 6, a total of 44 investment projects were approved, totaling more than $396 million in capital and creating about 25,000 jobs.
Of the projects, 41 are new and three are expansions of existing ventures. Thirty-one are located outside of special economic zones (SEZs) and 13 are located within SEZs.
The CDC highlighted that the most prominent initiative outside of an SEZ is the expansion of a laundry, dyeing and printing facility located in Kraing Tea village, Preah Nipean commune in Kampong Speu province’s Kong Pisei district, with an additional investment of more than $21 million.
The highest-profile venture is the establishment of the Koh Kong Zhejiang SEZ in Chroy Svay commune of Koh Kong’s Sre Ambel district, with an investment of $100 million, creating 331 jobs.
Another undertaking is the initiative to construct a Galatin food processing plant located within the new Koh Kong Zhejiang SEZ with an investment of more than $26 million, expected to create 194 employment opportunities.
Chinese investment in July accounted for 68.06% of total capital financing, while domestic investment accounted for 14.24%, according to the CDC.
The garment sector remained attractive for financiers, with 10 projects, followed by the electricity sector with five and the plastics industry with four.
Hong Vanak, an economic researcher at the Royal Academy of Cambodia, said that the large number of investment projects from China was not accidental, as cooperation between the two nations had reached the “Diamond Hexagon” level, along with other regional and bilateral agreements, such as the China-Cambodia Free Trade Agreement (CCFTA) and the Regional Comprehensive Economic Partnership (RCEP).
"Many Chinese investment projects are not coincidental, but a result of the extensive cooperation between the states and the people of the two countries, which drives the flow of investment," he said.
He added that the considerable investment in the garment sector is due to Cambodia still enjoying favourable conditions, including the Everything But Arms (EBA) trade scheme for the EU and the Generalized System of Preferences (GSP) programme with the US, which are both markets for quality garments, travel goods and footwear, worth billions of dollars.
Vanak emphasised that investment in the sector is still important for the country as it creates more jobs.
"Therefore, the increase in investment is due to good relations between the Chinese and Cambodian governments, as well as the good relations between the Cambodian government and the countries that purchase [its] products,” Vanak said.
“This is due to the country’s compliance with the requirements of the purchasing countries. I don’t see the orders decreasing,” he added.
