Logo of Phnom Penh Post newspaper Phnom Penh Post - Flourishing China-propelled garment sector a boon to national economy

Flourishing China-propelled garment sector a boon to national economy

Content image - Phnom Penh Post
The labour-intensive garment industry hires about 800,000 workers.

Flourishing China-propelled garment sector a boon to national economy

Foreign direct investment started flowing into Cambodia after its first general election in 1993. The garment manufacturing industry was the first to enter the Kingdom and offer jobs to the fledging economy, thanks to Chinese investors.

Today, more than half the Garment Manufacturers Association of Cambodia’s (GMAC) members are from China.

That said, it is also true that foreign direct investment and international trade through better market access granted by the United States, European Union and other developed countries have tremendously contributed to the social and economic development and prosperity of Cambodia in the last 20 years.

The garment, footwear and travel goods sectors remain the important economic pillars until today.

The seven per cent average annual growth rate has lifted millions of Cambodians out of poverty. And it will allow the Kingdom to be elevated from Least Developed Country to a high middle income one by 2030 and high income country by 2050.

Key to achieving this, of course, is the political and social stability that must be maintained together with constant reforms to business processes and the investment environment.

The garment, footwear and travel goods sectors have created 800,000 jobs and generated some $9 billion in exports in 2018. About $2 billion is paid in wages to workers every year.

The sector has grown along with a high level of labour and social compliance. Better Factories Cambodia’s latest report suggests that factories in the Kingdom have achieved an average compliance level of 90 per cent to Cambodian labour laws and core international labour standards.

Content image - Phnom Penh Post
The sector has contributed immensely to the domestic economy.

Building on this success, we have been able to attract more foreign direct investments to grow our economy and create additional jobs for our young people, especially those entering the working age.

Development of the sector has also laid a solid foundation and eco-system for other export industries to grow. This includes the legal framework, social and environmental standard and compliance, wage setting mechanism, skills development and an environment that’s suitable for trade facilitation.

The sheer size of formal employment in the sector allowed the government to start its National Social Security Fund which is a very important public policy beneficial to our citizens.

As China is in the process of economic transformation, Cambodia can expect more investments from that country, particularly in the low and higher value added sectors.

The Cambodia case study on the impact of Chinese investments in the Kingdom found that the overall impact on the macro-economy is considerably positive.

Chinese investments have been one of the main contributors to Cambodia’s economic growth, according to a report by the Center for Policy Study.

Besides investments in textiles and garments, China has also invested substantially in other important sectors. Cambodia looks forward to cooperating more closely with it in all fields.

From Garment Manufacturers Association in Cambodia

MOST VIEWED

  • Tragedy as four lions devour teenager in Pakistan safari park

    In a horrifying incident at an animal park in the Pakistani city of Lahore, four lions killed a 17-year-old grass reaper. However, how Muhammad Bilal Hussain managed to get near the lions was yet to be ascertained. Safari officials said Hussain climbed a 3.7m high

  • Hun Sen asks Cambodians to believe in government

    Prime Minister Hun Sen on Monday asked citizens and investors to trust that the government will overcome the challenges brought about by Covid-19 and the loss of the EU’s Everything But Arms (EBA) scheme. Speaking to reporters at the Peace Palace in Phnom Penh,

  • Gloom hits Siem Reap tourism

    As the Kingdom’s overall tourism sector continued to grow last year, industry insiders in Siem Reap have expressed their deep concerns, citing a sharp drop in Chinese arrivals to the province beginning late last month. Cambodia earned $4.91 billion in international tourism revenue last year,

  • Westerdam passenger ‘never had’ Covid-19

    The US Centres for Disease Control and Prevention (CDC) said the US citizen that allegedly tested positive in Malaysia after travelling on the Westerdam was never infected with Covid-19 in the first place. In an article published in the newspaper USA Today on Friday, CDC

  • ‘Ghost staff’ found, $1.7M returned to state coffers

    The Ministry of Civil Service said more than seven billion riel ($1.7 million) in salaries for civil servants was returned to the state last year after it discovered that the books had been cooked to pay ‘ghost officials’. This is despite claims by the Ministry of

  • Woman wanted for killing own son

    Police in Phnom Penh’s Meanchey district are on the lookout for a woman who allegedly hacked her son to death on Sunday in Stung Meanchey III commune. District police chief Meng Vimeandara identified the son as Chan Sokhom, 32. “The offender can’t escape forever.