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

  • Man Covid-19 positive after Thailand trip

    The Ministry of Health on Saturday reported the third Covid-19 case in less than two weeks, bringing the total to 125. The man, a 26-year-old from Tbong Khmum province's Tbong Khmum district, arrived at the O'Beichoan border checkpoint in Banteay Meanchey province on Thursday. He is

  • Kingdom's GDP growth to narrow -1% to -2.9%, World Bank says

    The World Bank expects further recoil on Cambodia’s gross domestic product (GDP) growth to between minus one per cent and minus 2.9 per cent for 2020 as its main growth drivers – tourism, manufacturing exports and construction – take a beating due to Covid-19, its latest economic update

  • Vietnam: Tougher sentences for child abusers

    Several National Assembly (NA) deputies in Vietnam are calling for tougher penalties to be handed down to child abusers. They hope stricter punishments will act as a strong deterrent to prevent offenders committing further offences in the future. Extreme measures such as chemical castration were

  • Central bank to shun small US banknotes

    The National Bank of Cambodia (NBC) is considering not accepting smaller denominated US dollar banknotes – $1, $2 and $5 – from banks and microfinance institutions (MFIs) which it said are flooding its stockpile as the demand for those notes is low. While some banking insiders welcomed the move as

  • PM lauded in Covid-19 fight

    World Health Organisation (WHO) director-general Tedros Adhanom Ghebreyesus sent a letter to Prime Minister Hun Sen thanking him for following the WHO’s guidance and commending Cambodia’s efforts in the fight against Covid-19. In his letter made public by the Ministry of Foreign Affairs

  • Workers return, hope for salaries

    More than 600 factory workers in the capital’s Chaom Chao commune in Por Sen Chey district returned to work after the factory’s owner promised to pay their salaries in instalments until the middle of next month. On Tuesday and Wednesday, more than 600 workers gathered