Chinese investors were the driving force behind Cambodia’s economic growth in July, participating in 44 new and expanded investment projects, primarily in the garment sector. These projects, totaling over $396 million in capital, created approximately 25,000 jobs, according to the Council for the Development of Cambodia (CDC). Among these projects, 41 were new ventures, while three were expansions of existing ones. Thirty-one projects were located outside special economic zones (SEZs), while 13 were situated within SEZs.
The garment sector attracted the most investors, with 10 projects, followed by the electricity sector with five and the plastics industry with four. A notable project outside an SEZ was the expansion of a laundry, dyeing, and printing facility in Kraing Tea village, Preah Nipean commune, Kong Pisei district, Kampong Speu province, with an additional investment of over $21 million.
One high-profile project was the establishment of the Koh Kong Zhejiang SEZ in Chroy Svay commune, Sre Ambel district, Koh Kong province, with a $100 million investment and the creation of 331 jobs. Another significant undertaking was the construction of a Gallatin food processing plant within the new Koh Kong Zhejiang SEZ, with an investment exceeding $26 million and the expectation of generating 194 jobs.
China’s influence on global supply chains and the Asian economic landscape has been significant for decades. Cambodia, with its strategic geographic position and expanding economy, has attracted substantial interest from China, facilitating its integration into global supply chains. The garment and power sectors attracted the most investors with several projects.
Reports indicate that China’s infrastructure projects have enhanced Cambodia’s connectivity, strengthened its economic ties with the world and the region, and boosted foreign direct investment. However, experts believe that Cambodia should consider diversifying its investment portfolio rather than relying solely on funding from China.
On Monday, Cambodia initiated the China-backed construction of a $1.7 billion canal designed to connect the Mekong River to the sea. This project has raised concerns about Beijing’s growing influence in the region. The Cambodian government strongly denies reports suggesting that the Chinese navy might use the canal to threaten neighboring countries, including Vietnam.
