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Wenzhou business grows in Phnom Penh

The number of incoming business people from Wenzhou, a Chinese coastal city of three million known for manufacturing, has grown markedly in recent years.

So much, in fact, that Wezhou opened an official chamber of commerce in Phnom Penh last week.

Labour and land costs on China’s eastern seaboard have pushed some manufacturers out of the city, which is about 500 kilometres south of Shanghai.

As growth in China has show signs of slowing this year, Wenzhou’s private small- and medium-sized industries have felt a squeeze in the access to credit.

Labour prices in Wenzhou are up to four times higher than in Cambodia, Chen Jinglian, chairman at the new association, said.

Although the cost of land has come down recently in Wenzhou, prices are still significantly lower in Phnom Penh.

While many Wenzhou businesspeople have come to Cambodia on their own terms, other have been told to relocate.

“About 50 per cent of the Wenzhou manufacturers here have been commanded by their customers to come here. [Garment makers] need to reduce their operating costs in order to keep their customers,” Chen said.

An insurgence of Wenzhou culture has followed the business people’s presence in Cambodia. The traders have branded themselves as a different breed of deal-maker.

Wenzhou was known as backwater and poor, that is, before China gradually lifted domestic and international regulations on trade in the late 1970s, said Li Chengjian, a factory owner and member of Wenzhou Cambodia Association of Commerce.

“When China opened up, people from Wenzhou spread around the country and started trying to do business,” he said. “They cut hair and hawked things on the street. These same people are the bosses at big companies now.”

While industry in regions such as Shanghai and Guangdong in southern China garnered government support during economic reform, Wenzhou was largely left out.

The result, Li said, was a self-reliant business culture unafraid to take risks and losses.

“Wenzhou people can take some bitter medicine if they have to,” he said.

To contact the reporter on this story: Don Weinland at don.weinland@phnompenhpost.com

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