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On Thursday, Cambodian Prime Minister Hun Manet started his official visit to France. The visit seems to have gone very well with several good outcomes to report. Both countries expressed satisfaction in deepening bilateral defense cooperation, including demining and language training for peacekeepers. French companies are showing interest in Cambodian infrastructure projects, including railways and logistics expansion. Six MoUs were signed to boost economic ties, and the two nations have now officially upgraded their relationship to a strategic partnership.
Economic Strategy: High Hopes Amidst Real Challenges
Cambodia aims to become a high-income country by 2050 through the strategy of economic growth, employment, human capital, diversification, and competitiveness. Despite optimistic government forecasts of 6.6% GDP growth in 2024, international projections remain lower thanks to global tensions and domestic issues like limited productivity. The strategy shows a need to transform the (highly economically important) garment sector, agriculture, MSMEs, and tourism, but challenges like reliance on garment manufacturing, the need for agricultural reform, and low-spending tourists are doggedly persistent.
Read more: East Asia Forum
Cambodia-Vietnam Trade Booms: $6.6B
In 2023, Cambodia-Vietnam bilateral trade reached nearly $6.6 billion, a 7.3% year-on-year increase. Exports to Vietnam grew by ~37%, to almost $3 billion, while imports from Vietnam decreased by almost 9%. The trade growth, particularly in exports, is a reflection of the country's expanding production capacity and a reduced need to rely on imports.
Read more: The Star
Cambodia-EU Trade Sees Slide
Contrasting the success seen in Vietnamese trade (previous story), trade with the European Union (EU) decreased by almost 5% in 2023, totaling $4.61 billion. The decline was primarily in exports, which fell by 9.4% to $3.66 billion, while imports from the EU increased by ~17%. The main exported products were garments, textiles, shoes, travel goods, bicycles ($417M!), and milled rice. The decrease in exports is largely being chalked up to the global economic slowdown and resulting reduced purchase orders from Europe. Germany, Spain, the Netherlands, France, and Belgium remain Cambodia's top EU trading partners.
Read more: Cambodianess
CDC Approves $60 Million in New Investment
The Council for the Development of Cambodia (CDC) has approved ten new investment projects, totaling more than $60 million. These projects, registered as of January 15, include the establishment of garment factories in various districts and provinces, footwear and bag factories, electronic factories, a light bulb factory, and a plastics manufacturing plant. These investments are expected to create more than 12,000 job opportunities, which should significantly help local employment and economic growth numbers over the next few years.
Read more: Khmer Times
Ministry of Information Rejects HRW Report
The Ministry of Information in Cambodia has dismissed Human Rights Watch's (HRW) report on press freedom in the country, calling it a misrepresentation. The HRW report claimed tight government control over media and harassment of independent outlets, but Ministry spokesperson Tep Asnarith argued that the report is unbalanced, biased, and defamatory. He claims that the Cambodian Constitution guarantees press freedom, and journalists operate freely and safely, maintaining transparency and public trust. He further suggested that the government remains committed to protecting press freedom and views the media as a key partner in socio-economic and democratic development.
Read more: The Star
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Rubber Gets A Billion-Dollar Boost
Reports from the rubber industry are setting up for a major expansion with Chinese investment. Last year, Cambodia exported rubber worth just under $500 million, a slight decrease from the previous year. A new phase of growth is on the horizon with announcements of a $1 billion Chinese investment in rubber and tire projects, however. The investments include Wanli Tire's capacity expansion and a mutual cooperation agreement between Cambodia and China's NERCRAT. The investment should see Cambodia's position in the global rubber market improving from it’s already solid footing.