Cambodia eyes Chinese investment to boost economy

BEIJING - Relations between China and Cambodia have grown closer in recent years, with Beijing investing billions of dollars in the southeast Asian nation to help boost its economy, an official said Sept 16.

China has become Cambodia's biggest source of foreign direct investment, said Mao Tianyu, division chief of the International Department of the Ministry of Commerce.

Chinese companies invested $395 million in non-financial sectors in Cambodia last year, an increase of 83 percent year-on-year. By the end of July 2011, China's outbound direct investment in non-financial sectors in Cambodia amounted to $1.2 billion, Mao said.

Cambodia's economy has been growing rapidly but is still weak compared with other countries in the region.

Its gross domestic product (GDP) rose 5.9 percent year-on-year to reach $11.44 billion in 2010, a growth rate slower than Thailand's 7.8-percent increase and also below the 6.8-percent rise seen in Vietnam, said Xu Ningning, executive vice secretary-general of the China-ASEAN Business Council.

Cambodia's per capita GDP stood at $792 last year with an annual inflation rate of 3.1 percent.

Most rural households in Cambodia depend on agriculture and related sub-sectors. Agriculture, apparel, real estate and tourism are the country's four pillar industries.

As a country endeavoring to integrate itself into the global economy, Cambodia has shown great enthusiasm for foreign investment.

The country approved $5.5 billion in foreign investment during the first seven months of this year, up 301 percent from last year, Xu said.

Khek Caimealy Sysoda, Cambodia's ambassador to China, said she hopes to see more Chinese investment in her home country.

"Cambodia enjoys political and macroeconomic stability as well as a transparent legal framework. It has a lot of potential for investment," she said.