Vietnamese investors shied away from the Cambodian market during the first half of the year as the Council for the Development of Cambodia (CDC) failed to register a single qualified investment project (QIP) from Vietnam during that period for the first time in its 22-year history, a Cambodian official said yesterday.

Speaking at the Cambodia-Vietnam business forum in Phnom Penh, CDC deputy secretary-general Chea Vuthy said that no Vietnamese investment projects were recorded during the first half of the year, but insisted this was not a cause for concern.

“There is no negative effect because this often happens when doing business,” he said, explaining that investment registration numbers regularly fluctuate during different periods. He also pointed out that QIP status is not provided to small investments, or those made in the banking and services sectors.

“I think that other areas of [Vietnamese] investments that do not need approval from the CDC, like the service sector, are still coming to Cambodia,” he added.

Vietnamese firms were the fourth-largest source of foreign direct investment (FDI) in Cambodia for 2015, as total investments to the Kingdom reached $4.64 billion during the same period, CDC figures show.

Nguyen Duc Thanh, president of the Vietnam Institute for Economic and Policy Research, attributed this year’s investment slump to the poor performance of Cambodia’s agricultural sector.

“Recently, the price of rubber has not been good so I think [Vietnamese investors] do not see this as a good time to make investments,” he said.

Ha Thi Thanh Binh, general secretary of the Association of Vietnamese Investors in Cambodia (AVIC), told reporters that Vietnam’s overall investments in Cambodia reached $2.85 billion through 182 different projects.

Four more Vietnamese firms have now committed to invest in Cambodia through QIP projects and this will improve CDC investor figures for the second half of the year, she added.

Major Vietnamese investors in Cambodia include telecom giant Viettel, whose local subsidiary Metfone is one of the Kingdom’s biggest mobile telecom operators.

Vinamilk, Vietnam’s largest dairy company, has invested in a $23 million production facility in Phnom Penh, while Vietnamese rubber giant Hoang Anh Gia Lai owns several economic land concessions (ELC) in the country and has heavily invested in Cambodia’s agricultural sector.

The governments of both countries had set a target to boost bilateral trade to $5 billion by 2015, but failed to reach their goal as total exchange reached just $3.37 billion last year.