China’s largest bank will be the country’s second to launch in Cambodia during a period of soaring investment in the Kingdom by the People’s Republic.
The Industrial and Commercial Bank of China will open a branch office in Phnom Penh before the end of November, bank president and executive director Yang Kaisheng said on Tuesday during discussions with Cambodia Prime Minister Hun Sen.
“The relationship between Cambodia and China is quickly moving forward in a positive way,” Eang Sophalleth, Hun Sen’s personal spokesman, quoted Yang Kaisheng as saying during the meeting. “Therefore, ICBC decided to invest in Cambodia.”
With US$1.13 billion of foreign direct investment in Cambodia between January and July, or an 83 percent year-on-year increase, China is the Kingdom’s biggest investor, according to Council for the Development of Cambodia statistics.
Hun Sen welcomed ICBC, according to Eang Sophalleth, saying the bank would promote trade and, in particular, the “record-high” Chinese investment. ICBC was the largest listed bank in the world with a market capitalisation of $233.5 billion in 2010, according to the company’s website.
The increasing volume of trade and investment between the two countries is drawing Chinese banks south, said In Channy, CEO and president of ACLEDA Bank, Cambodia’s largest domestic bank.
Bank of China, the People’s Republic’s No 2 lender, opened in Cambodia in May. With total assets of more than $1.7 trillion in 2010, it was hoped the branch opening would fuel large-scale investment in the country, the Post previously reported. It has a presence in 30 countries.
“These banks are following their customers from their home country,” In Channy said yesterday. “You see the number of investments from Chinese businesses, and they really outnumber investors from other countries.”
The Chinese banks are suited to fund large projects such as hydropower dams, he said, a financing feat beyond the scope of local retail banks. Hun Sen and Yang Kaisheng also discussed goals of increasing agricultural exports to China, according to Eang Sophalleth. While Yang Kaisheng said the Chinese government has made Cambodian exports a priority, Hun Sen said no agricultural products have gone to China because of a lack of capital investment in the industry.
Numerous deals for Cambodian rice have been inked between Cambodian and Chinese companies since the beginning of the year.
Exports, however, are pending Chinese agriculture inspection that some experts have said will indefinitely hinder business, the Post reported last month.