Government approves ASEAN-Sino investment deal after announcing figure
CHINA’s foreign direct investments in the Kingdom hit an accumulated US$8 billion in June this year, a senior finance official told the National Assembly yesterday as it ratified the ASEAN-China Economic Cooperation Framework Agreement.
Secretary of State for the Ministry of Economy and Finance, Kong Vibol, told the Assembly that China’s investments have created many jobs in Cambodia, contributing to reducing poverty.
“China is the largest investor in Cambodia,” he said.
“As of June 2010, the accumulation of Chinese investment hit $8 billion in the sectors of agro-industry, tourism, infrastructure, and hydro-power as well as the garment industry. By contrast, there are no Cambodian investors to invest in China.”
His comments came as the National Assembly rubber-stamped the ASEAN-China investment agreement, provisionally agreed in August, as well as a similar pact initially signed with South Korea in June 2009.
The step means Cambodia has officially adopted a legal structure to promote and protect foreign investments in line with ASEAN’s recommended framework for comprehensive economic cooperation.
Ai Khon, vice chairman of the National Assembly’s Commission on Planning, Investment, Agriculture, Rural Development and Water Resources, said yesterday: “The agreement will promote investment flows and create liberal, transparent and competitive investment regimes on both sides.”
He said that the agreements would ensure similar treatment is granted to investors in respective countries, guarantee fair and equitable protection of investment, lay out compensation measures in case of expropriation, and provide rules for investor-state dispute settlement.
Cheam Channy, a lawmaker for opposition Sam Rainsy Party, said his party entirely supported these agreements as they would promote and expand investments – but warned it would be worth nothing if Cambodia’s judicial system, governance record and corruption levels were not improved.
“We’d like to urge the government to give much attention on these issues in order to attract investment or they [the investors] will put their money in other ASEAN countries with better laws and enforcement,” he said.
Qian Hai, spokesperson for the Chinese Embassy in Phnom Penh, said yesterday’s ratification of the agreements demonstrated “good cooperation”.
“Our main cooperation is in the area of infrastructure because we think that is what will help Cambodia develop,” he said.
He said the agreements would promote increased investment because it made it “more convenient” for businesspeople to invest in other countries.
Figures from the Council for the Development of Cambodia (CDC) show that in both 2008 and 2009 China topped FDI sources in Cambodia, funding 40.14 percent of investment projects worth $4.3 billion in 2008 and 15.23 percent worth $892.6 million in 2009.