Economic co-operation between Cambodia and Hong Kong continues apace. Hong Kong is Cambodia’s 6th largest trading partner, and it is the 5th largest source of imports. From June 1, Cambodian diplomats and a range of government officials can travel to Hong Kong without a visa and stay for 14 days under a new exemption agreement. In Cambodia, there are 56 Hong Kong-owned garment and footwear factories employing some 35,000 workers. On a recent trade mission to Cambodia, John C Tsang, finance secretary of the Hong Kong Special Administrative Region, sat down with the Post’s Hor Kimsay to talk about the economic relationship.
In general, what is the Hong Kong investor’s perception of Cambodia as an investment environment?
Cambodia has become the center of manufacturing. Cambodia has many advantages with good competitive strengths. Wages are competitive. There is a plentiful, young labour force. Land costs are very competitive. These are key characteristics that many employers are looking for. Hong Kong investors see a lot of opportunity. The garment industry is already here. And beside from this, we also see a growing number of Hong Kong investors who are interesting in electronic manufacturing, the power sector in terms of electricity, and transportation companies.
As for disadvantages, what are your thoughts on the image of Cambodia as a place where corruption and informal payments have hindered the potential of business growth here?
I do not think the corruption in Cambodia is any worse than other places around the world. This is one of the factors that I am sure investors have to take into consideration when they decide on the location of their investment.
The delegation scheduled trips to Cambodia and Myanmar. Why pick only those countries?
We have been in touch with countries in the ASEAN region for quite a long time. For now, Myanmar and Cambodia are both emerging markets and newly industrialised countries. Thus, growth potential is much higher than more developed economies in the region. It is the right time for investors now. For a place like Cambodia, the growth is very fast.
Despite the increasing interest of foreign investors in Cambodia, what is your recommendation for Cambodia to catch up more with its other neighbours in ASEAN?
If we compare Cambodia to other countries in the ASEAN region, it is very small. Cambodia is an open market economy. In many ways, it is very similar to Hong Kong. If Cambodia can continue down the line of a more open economy like Hong Kong, I think the potential is very big. Moreover, the key sector for future development is the strengthening of education to create more expertise among the younger generation.
The population is very young. And if they could have access to more education, not only in academic subjects, but also from a broad range of skills such as hotel management, engineering, mechanics and all different sectors in the economy, it is quite crucial.
This interview has been edited for length and clarity