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Logo of Phnom Penh Post newspaper Phnom Penh Post - China's investment in Cambodia fixed assets dives amid downturn

China's investment in Cambodia fixed assets dives amid downturn

The Kingdom eyes more diversified involvement from Japan, whose investment grew from zero last year to just under $5 million so far in 2009

FIXED-asset investment in Cambodia by China and South Korea plunged in the first half of 2009, while Japan's fixed assets spiked during the same period, according to a report from the Council for the Development of Cambodia released earlier this month.

Chinese investments dropped more than 93 percent, and South Korean capital declined nearly 58 percent, the report stated.

Chinese investment by fixed assets in Cambodia dropped to US$242.43 million, from $3.86 billion during the first half of last year," the report said. "Korea was down to $109.2 million from $258.09 million last year."

Fixed asset investments by Japan during the same period, the report noted, hit $4.76 million in the first half of this year, up from nothing last year.

Yun Heng, deputy director of the Evaluation and Incentive Department at the Cambodian Investment Board, an arm of the CDC, characterised the decline in investments as the result of smaller-scale projects this year.

"When we look at the [Chinese and Korean] figures, it's bad, but those countries still have a similar number of ongoing projects. They're just smaller than last year's projects," he said.

Yun Heng said most of the South Korean investments related to real estate, agriculture and tourism, while Chinese investments focused on real estate, garment factories, mining and hydroelectric dams.

Japanese investment typically targets tourism, Yun Heng said, but added that Cambodia hopes to see this diversify into the IT and manufacturing sectors.

Lee Hyoung-seok, deputy director general of the Korea Trade-Investment Promotion Agency, said Monday that it was inevitable during times of economic crisis that investments would drop.

"[Investment] has definitely dropped because of the global recession and the real estate downturn, so Korean investment opportunities in Cambodia are now smaller than they were two or three years ago," Lee said. "Investors ... are watching the economic environment before making further investments."

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