Song Xiaoguo, speaks at a signing ceremony of the Cambodia-China Agricultural Promotion Centre in Phnom Penh, Cambodia, Dec. 24, 2014. (Photo/Xinhua)
Sichuanese enterprises have focused their overseas investment on Southeast Asia, especially on Cambodia and Myanmar, as nations in the region strengthen incentives for foreign investment over recent years, the Chengdu-based Finance and Investment reports.
China and Cambodia have very close political relations and can complement each other in trade, with especially sound prospects in Cambodia's agriculture, garment making, property and tourism sectors, said Song Xiaoguo, councilor of the Commercial Office of the Chinese embassy in Cambodia, at a recent investment promotion conference.
Cambodia has advantages in land, labor costs and resources, while China has a high level of technology, talent, management personnel and large funds, said Marcus Lee, managing director and chief China economist with Hampton Court Investment Bank. Lee has recently conducted a research trip to Cambodia.
In line with the China-ASEAN Free Trade Area agreement, China and Cambodia began cutting tariffs from Oct 1, 2009. China had implemented zero tariffs on most Cambodian products by Jan 1, 2010, while Cambodia began cutting tariffs in 2011, reducing tariffs further in 2013 and 2015, eventually implementing zero tariffs on more than 90% of products from China in 2015.
In recent years, many leading Chinese enterprises have invested in Cambodia, focusing on garment factories, agriculture, property, construction materials, processing of agricultural products, electricity, telecommunications, and health, Lee said. As of June 2014, China had invested US$9.9 billion in Cambodia, according to Cambodian government figures.
Myanmar, which has seen stable economic growth in recent years, has become a hot investment destination, having absorbed foreign direct investment of US$45.2 billion as of January 2014, with funds mostly coming from China, Thailand, Hong Kong and Singapore. Myanmar approved a new foreign investment act in November 2012, and last year made efforts to improve its infrastructure to lure foreign funds.
Negotiations on the ASEAN Economic Community are expected to be completed by 2015, seen as an important turning point for Southeast Asian economies to be included in the regional economy. The ASEAN market will become an integrated market with a population of 600 million and annual economic output reaching US$3 trillion.
While Chinese enterprises have flooded Southeast Asia with investment, individual investors have also been actively investing in the region's stock markets. Cambodia's stock exchange began trading in April 2012, with Chinese investors heavily involved.
Myanmar plans to establish its stock exchange in 2015, and about 10 companies are qualified for listings so far.
References:
Song Xiaoguo 宋曉國
Marcus Lee 李統毅
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