Prime Minister Hun Sen and President Xi Jinping. China will be a key partner in aiding Cambodia’s economy rebuild through both trade and foreign direct investment.(Source: Khmer Times)
According tothe report, despite research indicating that a slow recovery in tourism maycontinue to weigh down growth in the first half of 2021, the sector maystrengthen in the second half as vaccines become more widely available andconsumer confidence improves.
The reportadded the government having extended monthly tax exemptions to hotels,guesthouses, travel agents and restaurants in selected provinces, amongst othermeasures, is improving the situation.
Additionally,Cambodia’s openness to trade remains another factor that will likely spurdevelopment, said the report.
The WBreport comes on the heels of a DHL Global Connectedness Index study that showedCambodia ranking 46th on DHL’s list of most globally connected countries. This is a high ranking for a lower-middle income state, laying a foundation forCambodia to attract more FDI.
Chinaremains the largest source of FDI inflow to Cambodia, with the bulk of itsinvestments going to key sectors such as garments, large infrastructureprojects, electric and electronic components, agriculture, mining and energy,coal and tourism.
Other majorsources of FDI include the Republic of Korea, the UK, Malaysia, Japan and HongKong (China). Similarly, the largest share of committed investment from these economiesgoes to the garments, construction and infrastructure sectors, followed bytourism and agriculture.
Cambodia hasalso been quick to move towards a number of regional FTA signings, with anagreement signed with China and the terms of one with the Republic of Koreaagreed on.
On theregional front, the newly established Regional Comprehensive EconomicPartnership (RCEP) is expected to boost economic confidence across Asiasubstantially. The WB predicts the agreement could increase Cambodia’s exportsto China by 23 percent./.
VNA
