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China – Cambodia Diplomatic Relations & Investments

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China and Cambodia share a long-standing strategic and friendly relationship that dates back to the 1950s. China has been a crucial source of economic and military assistance to Cambodia, and their cooperation has continued to strengthen over the years.

  • Economic Cooperation
    China is Cambodia’s biggest trading partner, and this partnership has contributed significantly to Cambodia’s economic growth. The Chinese Government has made substantial investments in the country, creating jobs and developing infrastructure, such as roads, bridges and ports. As a result, the commercial ties between the two countries remain strong and continue to flourish.
  • Political Cooperation
    China is a strong supporter of Cambodia’s government. It has been a consistent and vocal supporter of Cambodia in international arenas, including the United Nations. China’s unwavering support has bolstered Cambodia’s position on the world stage.
  • Cultural Cooperation
    China and Cambodia have a rich history of cultural exchange that goes back centuries. There is a growing Chinese community in Cambodia, and this has facilitated cultural cooperation and the sharing of cultural traditions between the two countries. Both nations have benefited from this strong cultural bond.
  • Military Cooperation
    China has provided Cambodia with significant military assistance, including weapons and training. Government officials from China and Cambodia regularly consult on security and defence matters. This military cooperation has strengthened the ties between the two nations and has contributed to the region’s stability.

The relationship between China and Cambodia is strong, long-standing and mutually beneficial. Both countries are committed to promoting peace and stability in the region and have complementary interests in economic development and security. As China continues to emerge as a global economic power, its partnership with Cambodia will remain an important part of its international relations.

China’s Trade Relationship with Cambodia

China’s trade relationship with Cambodia is strong and continues to grow. As Cambodia’s largest trading partner, China has established numerous economic cooperation agreements with the country.

According to the World Bank, Cambodia exported goods worth US$1.94 billion to China in 2022, while importing US$14.2 billion worth of goods from China. The primary exports from Cambodia to China consist of garments, footwear, home/travel wares and agricultural products, such as rice, rubber and timber. On the other hand, Cambodia imports machinery, electronics, textiles, chemicals, fuels, food and construction materials machinery from China.

The trade between China and Cambodia is expected to further expand due to a number of factors, including Cambodia’s growing economy and China’s Belt and Road Initiative.

The Chinese Government has implemented several programs to support trade and investment between China and Cambodia. These programs include:

  • China-Cambodia Free Trade Agreement (CCFTA): Signed in 2020 and enacted in 2022, the CCFTA eliminates tariffs on most goods traded between China and Cambodia.
  • China-ASEAN Free Trade Agreement (ACFTA): Signed in 2002 and enforced in 2005, the ACFTA eliminates tariffs on most goods traded between China and the ASEAN countries, including Cambodia.
  • Mekong-Lancang Cooperation (MLC) Framework Agreement: Established in 2015, the MLC includes China, Cambodia, Laos, Myanmar, Thailand and Vietnam. It aims to promote economic cooperation and development in the Mekong River region.
  • Regional Comprehensive Economic Partnership (RCEP): A free trade agreement between 15 countries in the Asia-Pacific region was signed on November 15, 2020, making it the world’s largest trading bloc in terms of GDP and population.

The rapid growth of China’s trade with Cambodia has had a significant impact on Cambodia’s economy, contributing to higher economic growth, job creation and poverty reduction.

China’s Investment in Cambodia

China has emerged as the largest investor in Cambodia globally. In 2022, China accounted for a substantial 43% share of all foreign direct investment in Cambodia. The key sectors of China’s investment in Cambodia encompass:

  • Infrastructure
    China’s investment in Cambodia’s infrastructure has been substantial, with a particular focus on roads, bridges, airports and seaports. Such investment has greatly enhanced Cambodia’s connectivity, making it easier for businesses to operate within the country.
  • Property
    Chinese investors are actively engaging in residential, commercial and industrial property investment in Cambodia. The country offers attractive affordability, enormous potential for capital growth, robust overall economic growth and political stability.
  • Energy
    China has made a significant investment in Cambodia’s energy sector, including in hydropower dams and thermal power plants. This has effectively addressed Cambodia’s escalating energy requirements while concurrently decreasing reliance on imported energy sources.
  • Industry
    China’s investment initiatives extend to various industrial projects in Cambodia, such as garment factories, cement plants and steel mills. This, in turn, has driven employment opportunities and fostered exports, contributing to Cambodia’s overall economic progress.
  • Tourism
    Cambodia greatly benefits from Chinese tourists, who make up a significant percentage of the tourist sector. Chinese investors have actively participated in developing numerous tourism projects in Cambodia, including hotels, casinos and theme parks.

China’s investment in Cambodia has significantly impacted the Cambodian economy, propelling economic growth, generating employment and actively reducing poverty.

Chinese Investment in Cambodian Property

Sihanoukville, Cambodia
Sihanoukville, Cambodia

Chinese investment in Cambodian property significantly increased in 2022, and is estimated to be worth US$3 billion, which is an impressive 50% increase from the previous year when investment was around US$1.5 billion. The 2022/23 Cambodia Investment Climate Assessment report by the World Bank attributes this growth to several factors, including:

  • Strong economic growth in Cambodia: Cambodia’s economy is expanding rapidly, resulting in an increased demand for property.
  • Affordability of property in Cambodia: Compared with other nations in the region, the cost of property in Cambodia is relatively low.
  • Potential for capital growth: As the Cambodian property market grows, there is significant potential for capital growth.
  • Political stability in Cambodia: As a politically stable country, Cambodia has become an attractive investment destination.

Chinese investment in Cambodian property has had a major impact on Cambodia’s economy by boosting economic growth, generating job opportunities and attracting foreign tourism.

Cambodia: Discovering the Nation

Introduction to Cambodia
    » Introduction to Phnom Penh
    » Introduction to Siem Reap
    » Monarchy & Government
Tourism & Residency
    » Thriving Tourism Industry
    » Visas in Cambodia
Healthcare & Education
    » Healthcare in Cambodia
    » Education in Cambodia
    » International Schools in Cambodia
Technology
    » The Rise of Technology in Cambodia

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