March 26, 2013: A roundtable discussion on “Cambodia Today: Business and Investment Opportunities and Challenges,” was held at the University of Cambodia for a Chinese delegation led by Mr. Xia Linsheng (Chairman of Chinese Enterprise) from Tsinghua University. Dr. Chap Sotharith, Adviser to Deputy Prime Minister Sok An and Research Director of the Cambodian Institute for Cooperation and Peace, and Dr. Sok Siphana, Adviser to the Royal Government and to the of Supreme National Economic Council, led the discussions.
In his opening remarks, Dr. Kao Kim Hourn observed that Cambodian economic growth depends on four main pillars: agriculture; the garment industry; tourism; and construction and real estate. He noted that the ASEAN community will have zero tax tariffs under the framework of free trade agreements by 2015. China also has a long list of items that could be imported from Cambodia without paying tax. EU markets are also not subject to import taxes, apart from arms, for Cambodia. Moreover, Cambodia has a low-cost labor force, and skills development training for the local workforce is on the way. These factors, together with the fact that the country has political stability and peace, provide huge opportunities for trade and investment in an open liberal environment. However, one challenge is the high price of electricity.
In his presentation, Dr. Chap noted that Cambodia is a pro-business government and China plans to invest $1.6 billion US dollars in a seaport in Koh Kong, the construction of railway from Koh Kong province to Preah Vihear, and a mining project in Preah Vihear. Cambodia has special economic zones that are attractive for investment: land for lease, together with power and water supplies are already available and investors can simply set up a factory through leasing. This has contributed to Cambodian recent high economic growth, averaging 7 per cent. He noted that the Council for the Development of Cambodia (CDC) could provide a one-stop service for investment projects. Some development projects have been in the form of concessions and BOT (Build, Operate, and Transfer) agreements. However, Cambodia has an imbalance of trade, with more import than exports. Dr. Chap said that, to address this problem, Cambodia wants to attract more Chinese and other tourists.
Dr. Sok Siphana pointed out that Cambodia is a small country, with the population of just over 14 million, but ASEAN is a big market with a population of over 600 million. “I always encourage students to learn a foreign language like English, which is an official language of the ASEAN bloc,” Dr. Sok said, adding that many students are now learning foreign languages, which means that they can get work ore easily. He also noted that Cambodia is a member of the World Trade Organization, with the associated commitments and obligations.
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