Who made Cambodia's economy take off
Cambodia has become one of the most popular investment destinations in the world. According to the 2016 Foreign Direct Investment (FDI) report of the National Central Bank of Cambodia (NBC) in Cambodia, in 2016, the total foreign direct investment in Cambodia was as high as US$2.155 billion. Among them, 538 million US dollars were invested in banks, 390 million US dollars were invested in manufacturing, 370 million US dollars were invested in real estate and construction, and 232 million US dollars were invested in agriculture. Chinese companies are Cambodia’s largest source of investment, with a total investment of US$511 million ranking first.
Due to the promotion of the real estate industry, construction industry, clothing industry and tourism, Cambodia's gross domestic product (GDP) growth is very strong. As of 2017, Cambodia's GDP is expected to reach 22 billion U.S. dollars, an increase of 2.2 billion U.S. dollars over last year.
In 2017, Cambodia's GDP growth rate was 6.9%, ranking sixth in the world. The growth rate in the next five years is expected to remain at 7%, and GDP growth is expected to rank first in Southeast Asia. With this dazzling achievement, the Asian Development Bank (ADB) called Cambodia one of the fastest growing economies in Asia, and called Cambodia the “New Tiger of the Asian Economy”.
Although Cambodia still ranks low in the total global GDP, according to the current GDP and future expectations, Cambodia has become the first choice for foreign investors. Now that Cambodia’s economy and development potential have been recognized, many investments have been transferred from China, Thailand and Vietnam to Cambodia to take advantage of the country’s more favorable investment environment.
The rapid development of tourism
The Board of Directors of the Asian Development Bank recently approved a loan of US$50 million to improve water supply projects and sanitation services in the four major cities of Battambang, Kampong Cham, Siem Reap and Sihanoukville in Cambodia. According to the announcement of the Asian Development Bank, the project will be implemented in 2018 and will be completed in 2022.
Under the situation that the average GDP growth of the entire ASEAN region is only 2.5%, according to the forecast of the Asian Development Bank this year, Cambodia's GDP will maintain a growth rate of 7.1% in 2017. Cambodia is undoubtedly the fastest growing country in Southeast Asia. In the past decade, the Cambodian economy has maintained an average of 7% rapid growth, ranking sixth in the world in terms of growth rate.
At the end of the last century, Cambodia held its first parliamentary election under the auspices of the United Nations. The new parliament promulgated a new constitution, changed the country's name to the Kingdom of Cambodia, restored the constitutional monarchy, implemented a free democracy and a free market economy, and separated the legislative, executive, and judicial powers. This Buddhist country embarked on the historical process of arduous transition to a modern democratic society.
Angkor Wat, as a symbol of the country and the times, has witnessed the subsequent rise of Cambodia. The original name of Angkor Wat is Vrah Vishnulok, which means Temple of Vishnu. It is the best-preserved temple in Angkor’s historic sites. It is famous for its magnificent architecture and meticulous reliefs. It is the largest temple in the world.
In 2016, Cambodia only Angkor Wat received 2 million tourists from 188 countries, of which 670,000 Chinese tourists, ranked first in Cambodia. According to relevant reports from local Cambodian media, from January to November 2017, 2,189,804 foreign tourists visited the historical sites of Angkor in Siem Reap, an increase of 12.43% year-on-year, and ticket revenue reached 95.66 million US dollars, an increase of 76.61% year-on-year.
Huge demographic dividend
Geographically, Cambodia is at the very center of ASEAN and the core area of the Mekong River Basin. It is an excellent strategic location and a gateway to important global markets. The demographic dividend has fulfilled Cambodia's economic development ambitions.
According to a statistics, in 2015, Cambodia's population was approximately 15.65 million, with an average population age of 27, and young people under 30 accounted for 70% of the total population. The entire population structure of this country presents a perfect pyramid shape, with sufficient labor and a strong demographic dividend.
In the West Port Special Zone, the monthly labor cost of ordinary workers is between 170-200 US dollars, and the exchange rate is about 1100-1300 RMB. But in China's Pearl River Delta and Yangtze River Delta, the same worker needs more than RMB 3,000 per month.
The huge demographic dividend has further provided a foundation for the development of Cambodia’s real estate. According to official statistics, as of December last year, Cambodia had a total population of 15.39 million, of which 38% were under 17 years old, a total of 5.889 million; those aged 18-60 accounted for 53%, nearly 8.21 million; and 61 years old The above is only 9%, about 1.295 million people.
The speed of economic development shocks the world
The reason why Cambodia has become a hot spot for investment in the world has its unique advantages.
When roads, bridges, electricity, and ports are built one by one, Cambodia's economy is also advancing rapidly. Cambodia’s political situation is stable and economic freedom is high. All industries are open to the outside world, foreign exchange controls are not implemented, and foreign investment is encouraged.
In 2016, Cambodia received US$2.15 billion in foreign direct investment, of which the main areas of foreign investment were real estate, banking, and manufacturing.
In Cambodia, real estate quickly surpassed agriculture and became the first driver of economic development. With the globalization of the economy, Cambodia's real estate development is booming, and housing prices have maintained an annual growth rate of more than 12%. In addition, the geographical advantage is very obvious. Cambodia is strategically located in the center of ASEAN, and it is also a gateway to important global markets. In 1999, Cambodia joined ASEAN and became its tenth member. Foreign capital entering the Cambodian market can directly radiate the entire ASEAN market.
Excellent investment preferential policies. In order to attract foreign businessmen to invest in Cambodia, the Cambodian government has continued to provide various preferential policies. Cambodia has the least investment control among ASEAN countries. Various preferential investment policies, including tariff reduction and exemption, and trade preferences granted by 31 countries, have attracted a large number of foreign companies to invest in the establishment of industries, etc., which are important for local infrastructure and housing offices. Demand and other aspects are good opportunities for development.
Rich in natural resources. Cambodia is a country dominated by agriculture, with abundant agricultural resources and cheap prices. Cambodia has a superior climate. The main agricultural products are rice, corn, potatoes, peanuts, and beans. The output of cassava reaches 3.78 million tons, and its starch content is high and the quality is good. It is understood that Cambodia's rich cassava starch resources have attracted development and investment from domestic listed companies such as Green-collar Holdings and Erkang Pharmaceutical. In addition, Cambodia has many advantages such as rapid economic development, high rate of return on investment, dollar-denominated pricing, and no foreign exchange controls, making it the best choice for Chinese companies to invest overseas.