Logo of Phnom Penh Post newspaper Phnom Penh Post - Business Insider: China investment boon comes with a price

Business Insider: China investment boon comes with a price

Ho Vandy sits in his private tour agency’s office in Phnom Penh last week.
Ho Vandy sits in his private tour agency’s office in Phnom Penh last week. Heng Chivoan

Business Insider: China investment boon comes with a price

As Chinese investment has flooded into the Kingdom, many local business owners have seen their profits start to fall. The Post’s Cheng Sokhorng sat down with Ho Vandy, adviser to the Ministry of Commerce and former president of the Cambodia Association of Travel Agents, to discuss the current state of investment in Cambodia and the recent challenges posed by the influx of Chinese cash and businesses.

How do you see the state of investment in Cambodia currently?
There are many types of investment, which are defined by Cambodia’s FDI [foreign direct investment] regulations. Currently, Chinese investment is the most outstanding in the Kingdom across almost every single industry. This is because of the good relationship between the Cambodian and Chinese governments, as well as the encouraging FDI policies Cambodia has adopted which have attracted a lot of investment from large Chinese companies for the past four years.

There was a boom of Chinese investment in the Kingdom just last year, especially in Sihanoukville province. This investment is not only a result of increased Chinese tourism, which has seen around 10 Chinese tour agencies enter the Kingdom as well, but also in the hotel and entertainment industries as well as large-scale projects like airports and dams.

What has been the impact of this growing investment?
The growth of incoming investment, spurred on by encouraging laws adopted by the government, has had many different impacts. Some positive results will be immediately evident, while others will become obvious in the long term.

But there are negative impacts, too, mostly caused by poor enforcement of regulations by government bodies in the region. For example, we already know that there are many Chinese people who overstay their visas in Cambodia. There are also problems between Cambodians and Chinese that have resulted from the increased Chinese investment, including fights and even kidnappings, which are the challenges.

What actions should Cambodia take to solve these challenges?
In order to successfully meet these challenges, Cambodia’s ministries and relevant authorities should enforce existing regulations and strengthen their presence by creating more policies, which should more explicitly detail what businesses can and cannot do in Cambodia. All businesses should respect the law and follow all future regulations in order to put an end to these issues.

The government recently created a task force to ease tensions between Cambodian and Chinese business owners in Sihanoukville. Do you think it will be effective?
First of all, we should have basic laws to identify and manage all businesses that are investing in the Kingdom, and we should keep track of what percentage of these investments have been absorbed by the local labour force. Chinese investment in the Kingdom has also come in the form of foreign labourers, and this is where we lose the benefit of the investment to our country.

Our poverty reduction policies depend on locals being employed as human resources. We need to implement more transparency laws, and we also need to create more regulations that prioritise local labourers. Currently we are trying to promote our human resources sector by providing locals with technical training that will teach standard skills and promote locally produced products.

This interview has been edited for length and clarity.

MOST VIEWED

  • Would you like fries with that? US burger chain makes Phnom Penh debut

    California-based The Habit Burger Grill restaurant chain is all set to serve up a delicious array of charbroiled burgers and sides at its newest international location in the centre of Phnom Penh. The Habit is “renowned for its award-winning Charburgers grilled over an open flame,

  • Banteay Meanchey flood victims receive aid

    Prime Minister Hun Sen on Wednesday provided aid to more than 10,000 families affected by flooding in Banteay Meanchey province’s Mongkol Borei district and offered his condolences to the 18 victims who drowned in the province over the past week. He said flooding had occured in

  • PM urges caution as Polish man tests positive for Covid

    The Ministry of Health on Wednesday reported that a 47-year-old Polish man tested positive for Covid-19 after arriving in Cambodia on Monday. There are a total of six Covid-19 patients currently in the country, all of whom are being treated at the Khmer-Soviet Friendship Hospital

  • Banteay Meanchey floods kill one more as death toll reaches 15

    As floodwaters start to recede in Pursat, Battambang and Pailin provinces and Phnom Penh, Banteay Meanchey continues to bear the brunt as one more person was killed on Monday, bringing the total number of flood-related deaths to 15 in the province this month. Banteay Meanchey provincial

  • Serving coffee with a side of robots

    The eye-catching glass building surrounded by greenery at the intersection of Streets 371 and 2002 in Phnom Penh’s Sen Sok district is more than just another coffee shop where you can while away a few hours. UrHobby House cafe is filled with robots and characters from

  • Floods prompt evacuations in Kampong Speu

    Rain-induced floods and water flowing from Kampong Speu province have submerged the houses of 1,527 families living close to the Prek Thnot River in Spean Thma, Tien, Kong Noy and Roluos communes in Phnom Penh’s Dangkor district, according to data from local authorities. Spean Thma