The Royal Group Phnom Penh Special Economic Zone (PPSEZ). Heng Chivoan
The Kingdom anticipates increased direct investment from the Japanese, as the Cambodian government and private sector highlight the country’s potential in geography, investment law, labour force and ability to export to international markets with trade preferences.
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Prime Minister Hun Manet visited Japan this past December to attend the commemorative summit for the 50th anniversary of ASEAN-Japan Friendship and Cooperation.
On the sidelines of the summit, he also presided over the 2023 Cambodia Investment Forum, engaging directly with Japanese financers to encourage further activity, including discussions on the initiative to establish the Cambodia-Japan Special Economic Zone (SEZ).
And following a request from Cambodia’s public-private sector, Yoshihisa Suzuki, chairman of the Mekong-Japan Business Cooperation Committee of the Japan Chamber of Commerce and Industry (JCCI), met last weekend with Manet, before the former’s resumption of discussions with the leadership of the Cambodia Chamber of Commerce (CCC), led by CCC president Kit Meng.
Japanese investment encouraged
Lim Heng, vice-president of the CCC, told The Post on February 4 about the bilateral meeting he attended between the chamber and the Japanese delegation, held at the Royal Group Phnom Penh SEZ (PPSEZ) on February 2.
He said the session was a direct response to the call of government leaders in December 2023 to meet with Japanese investors.
Heng emphasised the discussion’s importance in promoting and attracting more Japanese to directly invest in Cambodia or to expand market ties, in a bid to bolster Cambodian-Japanese business relations.
“After the visit from the leaders of the [JCCI], I am hopeful that Cambodia will see an increasing number of positive developments from Japanese investors,” he stated.
Heng noted that an interesting aspect of the meeting was the presence of Japan Airlines (JAL), as direct flights between the two nations are currently only available through All Nippon Airways Co Ltd (ANA).
He added that Japanese investment in Cambodia currently includes projects like Minebea (Cambodia) Co Ltd, a modern machinery and motor factory, a car assembly plant, AEON Mall, sectors in agriculture and a proposed SEZ.
In a meeting with Manet on February 1, Suzuki highlighted that the JCCI is one of Japan’s largest economic and trade institutions.
He said that with 515 offices and over 1.25 million members, it focuses on industries including textiles, machinery, metals, energy, chemicals, food, housing, information technology and finance.
He added that existing Japanese activities in Cambodia are primarily in sectors such as textiles, gas supply and agriculture.
If you build it, they will come
Sam Soknoeun, president of the Global Real Estate Association, which is exploring the potential for collaboration with Japanese investors on the proposed Cambodia-Japan SEZ project, stated that Japanese financing in the zone would likely attract even more Japanese investment.
He noted that SEZs in Cambodia are predominantly Chinese-owned, leading to an increase in Chinese investors and factories.
“Japanese investors are widely acknowledged for their potential and transparency. Therefore, if Cambodia establishes an economic zone with the Japanese, it will create more opportunities to attract Japanese companies to invest here,” he said.
Soknoeun elaborated on his in-depth study with Japanese financers to identify companies capable of encouraging more Japanese enterprises to establish operations in the Cambodia-Japan SEZ, which is anticipated to emerge in the future.
“If well-known Japanese companies open factories in Cambodia, it will not only improve the quality of consumer products in the country but also enhance the capacity to export Cambodian goods to international markets,” he added.
Sun Chanthol, first vice-president of the Council for the Development of Cambodia (CDC), chaired an inter-ministerial meeting on December 25, aiming to further attract Japanese financing.
The forum included a delegation led by Japanese ambassador Atsushi Ueno and focused on two major initiatives: firstly, the expansion of the Sihanoukville Autonomous Port (PAS) into a regional port and, secondly, the study and development of the Cambodia-Japan SEZ project.
The zone would be developed specifically to encourage more Japanese investment.
According to the National Bank of Cambodia (NBC), by the first quarter of 2023, Japan ranked as the fourth largest investor in the Kingdom.
Total investment stood at 11.3 trillion riel ($2.769 billion), marking an 11.6% increase from the same period in 2022, following China, South Korea and Singapore. The primary sectors attracting Japanese investment include finance, construction, hotels and real estate.
Data from the General Department of Customs and Excise (GDCE) indicated that in 2023, trade between the two countries totalled $1.8 billion, representing a 7.2% decrease from the $1.94 billion recorded in 2022.
Exports to Japan amounted to $1.17 billion in 2023, a marginal increase of 0.2%, while imports from Japan totalled $623.6 million, showing a steep decline of 18.5%.
