Xi visit to cement closer Cambodia ties

Source:Global Times Published: 2016/10/12 23:08:39

Investors have plentiful opportunities in infrastructure

Cambodian Prime Minister Hun Sen cuts a ribbon during the inauguration of the Chinese-funded Stung Russey Chrum Krom hydropower dam in Koh Kong province on January 12, 2015. Photo: CFP

Gao Hua

Editor's Note:

Chinese President Xi Jinping is scheduled to visit Cambodia, Bangladesh and India from Thursday to Monday. Ahead of Xi's visit, Global Times (GT) reporter Ma Jingjing interviewed Gao Hua, president of the Chinese Chamber of Commerce in Cambodia, on the status of Chinese investment in the country and prospects for bilateral economic cooperation.

GT: What's the current state of Chinese investment in Cambodia?

Gao: China ranked first among foreign investors in Cambodia in 2015, with investment of $865 million. Chinese companies invest in a wide range of sectors including infrastructure, agriculture and tourism. In addition to private companies, many State-owned enterprises are rushing into Cambodia for investment. For example, Chinese companies have invested more than $1.6 billion to build six hydropower stations.

GT: What factors do you think are attracting Chinese investors?

Gao: The sound relationship between the two countries serves as a solid basis for boosting Chinese investment in the country. Besides, Cambodia's fast economic growth and the country's social and political stability play a significant role. Cambodia is expected to maintain an economic growth rate of more than 7 percent until 2018, according to the Cambodia Industrial Development Policy 2015-2025. Meanwhile, Cambodia's factors of production such as labor are cheap. The country's minimum wage standard is $160 per month. On average, workers at textile plants are paid $200 a month, which is much less than in China.

Last but not least, Cambodia's infrastructure is catching up. In 2015, Cambodia's power supply increased 9.8 percent year-on-year to nearly 5.4 billion kilowatt-hours. And the average rate for power is around 1 yuan ($0.15) per kilowatt-hour in Cambodia at present, compared with about 2 yuan five years ago.

GT: What role does Cambodia play in China's "Belt and Road" (B&R) initiative?

Gao: Cambodia attaches importance to China's B&R initiative and hopes to take part in this grand program. Though Cambodia has a population of 15 million, the Association of Southeast Asian Nations (ASEAN) is a large market with a population of nearly 1 billion. Cambodia has a strategic geographic advantage in connecting China and ASEAN countries.

Meanwhile, Cambodia is looking for Chinese partners to carry out agricultural projects under the program.

GT: As more and more Chinese companies invest in Cambodia, what challenges do they face?

Gao: Most foreign investors are troubled by a lack of fundraising channels in Cambodia due to the country's under-developed financial services industry. In the farming sector, foreign investors have to choose the crops they plan to grow according to the country's tropical climate, as only a limited number of agricultural products are suited to the country's tropical climate, including rice, cassava and maize.

GT: What else do you think both governments can do to promote economic cooperation between the two countries?

Gao: The Cambodian government is making efforts to expand exports of agricultural products. Recently, China agreed to increase its purchases of Cambodian rice to 200,000 tons for the harvest season of 2016-17 from 100,000 tons. An agreement about Cambodia's fruit exports to China is expected to be signed during President Xi's visit to the country.

I also hope China can provide more financial support to Cambodia. For example, specialized banks such as Agricultural Bank of China can set up branches in Cambodia to make loans to investors.

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