China Dominates Construction

KHMER TIMES
SUM MANET

Cambodia’s construction sector is buoyed by investments from China. KT/Chor Sokunthea

China is the top-ranking foreign investor in the construction and property sectors in Cambodia, with South Korea and Japan coming second and third, according to a new government report.

According to the Ministry of Land Management, Urban Planning and Construction report released on Tuesday, since 2000, investment from 18 foreign countries had pumped more than $4 billion into 284 construction and property projects in Cambodia, with China contributing the most.

“Since 2000 until August 2016, investments from the foreign private sector have been in 284 projects, with a construction area totaling 12,496,615 square meters and worth estimated total investment of $4.3 billion,” said the report.

Among top investment capital from 18 countries, the report added, that China was ranked first, South Korea second, and Japan third.

In the same period, the ministry registered a total of 1,862 companies involved in the construction sector.

However, the report notes that only 871 are currently active, with 588 being locally run, and 283 being registered to foreign companies hailing from 29 different countries.

Dith Channa, managing director of Lucky Realty Co., said that the numbers were not surprising, given China’s huge population and investors keen to look abroad for opportunities. The current good relations between the two countries also helps the investment climate, he said.

“Obviously, for the last few years Chinese investors have injected a lot of investment capital in the Cambodian property development that boosts the sector. Japan and South Korea are also very active,” Mr. Channa said. “Because Cambodia still has a big room for making profits, they aim to seize the investment opportunities present here.”

Chrek Soknim, CEO of Century 21 Mekong, agreed.

“The property sector here is healthy for extracting profit, so not only China, but also other countries have come here for such investment. I expect that Japan will move up to number two soon, because we are currently seeing big companies from Japan coming to invest in the property sector,” he said.

“This will then attract more Japanese companies to invest in Cambodia.” According to the Asia Foundation, outward foreign direct investment from China has exploded in the past 15 years, going from less than $3 billion in 2002 to $123.1 billion by 2014.

Sector-wise, China’s foreign direct investment flowed mainly toward construction, financial, agricultural and mining sectors, said the Asia Foundation.