PHNOM PENH - China has become Cambodia’s biggest investor, putting some $8.8 billion into the country over nearly two decades, according to online data from the government’s lead investment agency.
Those investment numbers, from the Council for the Development of Cambodia, from 1994 to 2011, do not take into account a number of newer investments, including a 400-kilometer rail line, a steel plant and sea port, worth another $11 billion.
Those investments have given China increased political influence, and last year Cambodia faced broad criticism for its apparent support of China’s position on the South China Sea during a key Asean meeting.
CDC officials could not be reached for comment.
However, Cheam Yiep, a ruling party lawmaker and head of the National Assembly’s finance committee, said the increase in Chinese investment was due to Cambodia’s investment laws and guarantees for foreign investors.
“That’s the reason they come,” he said.
The second-largest investor was South Korea, followed in order by Malaysia, the UK and the US. Japan, the largest international donor to Cambodia, ranks No. 15 in investment, according to the CDC figures.
Kiyotaka Doho, a senior official for the Japan External Trade Organization, said most Japanese investment has come as small projects, compared to the massive real estate and hydropower plants from China. Approximately 60 percent of Chinese investment comes from real estate, followed by another quarter in hydropower or dams, he said.
“Those investments are big, with a lot of money,” he said. “But for Japanese companies, we focus on manufacturing, which is small projects.”
Cheam Yiep said Japanese investors take more time to investigate before investing, but those numbers are on the rise, as well.
Kang Chandararoth, an economist at the Cambodian Institute for Development Study, said the increase in foreign investment here is a good sign, “no matter which countries.”
“It is good that we have interest from foreign investor, no matter which countries. It does not need to be China, Korea or Europe. Whoever has money to invest and put it in a way to improve our economy, he said.”
Economists say the country continues to be plagued by corruption, which could scare off some potential investors. Still, according to the CDC, where most Chinese investment is coming in natural resources, rubber and tourism, there is potential for increased investment in tourism, agriculture, industry and services.