Cambodia a key country in Belt and Road Initiative

Cambodia is an integral constituent of Xi Jinping’s Belt and Road Initiative (BRI), with the number of Chinese investors showing interest in the kingdom’s market growing rapidly, a Chinese economist said yesterday during a conference on promoting cooperation between China and Cambodia.

Guoyou Song, professor at Fudan University and director of the Centre of Economic Diplomacy in China, speaking during a conference dubbed ‘Cambodia and the region under the BRI’, said Cambodia’s strategic location make it one the most attractive destinations for Chinese investment, with the number of Chinese companies realising this on the rise.

“Cambodia is a good place to invest and has many advantages, including solid economic growth and political stability,” Mr Song said.

The BRI is a development strategy proposed in 2013 by China’s leader Xi Jinping. It focuses on connectivity and cooperation between Eurasian nations, with China at the centre of a massive trade network.

Mr Song said that during the last three years bilateral trade and Chinese investment flowing into the kingdom have increased remarkably.

Chinese FDI into Cambodia was valued at $5.1 billion last year, according to Mr Song. Meanwhile, Chinese investment during the first nine months of the year grew 80 percent compared to the same period last year.

Mey Kalyan, senior advisor to the Supreme National Economic Council, said the BRI covers vast geographical areas, and it is a huge concept that is only now beginning to materialise.

“Key strategies, key countries and key projects are now being explored and selected,” Mr Kalyan said. “It’s like a moving train; a big work in progress.”   

“However, the question is: do we really understand what is really means in practice? Do we understand its implications for Cambodians and their way of life?” he said.

Chinese ambassador to Cambodia Xiong Bo said the BRI is facing new challenges: trade protectionism and unilateralism are on the rise, while global economic growth is sluggish.

The international community, developing countries in particular, are calling for a more open, practical, and efficient international platform for dialogue, coordination and cooperation, Mr Bo said.

Khin Pisey, director of Nuppun Institute for Economic Research in Cambodia and researcher at Cambodia 21st Century Maritime Silk Road Research Center (CMSRRC), said Cambodia and China’s bilateral trade and investment linkages have grown significantly since 2000.

“Cambodia should pay closer attention to any potential slowdown in China and take necessary measures to counter risks, and both governments should widen economic cooperation by boosting investment and trade in high value-added industries,” Mr Pisey said.

“China should further provide concessional finance to build harder infrastructure in Cambodia to improve its logistics and cost competitiveness for the next stage of development.

“Human capital development and technology transfer are equally important areas of cooperation for Cambodia to realise its inclusive development goals,” he said.

Mr Pisey added that China is now the top investor to Cambodia and among the top-ten trading partners, arguing that deepening trade through further removal of tariffs would stimulate growth, especially for Cambodia.

During the last 10 years, bilateral trade between Cambodia and China has increased in average 26 percent per year, reaching $4.8 billion in 2016.