Biweekly News Collection No.4

NO.4 (FEBRUARY 20, 2019)


IN SECOND WEEK OF FEBRUARY, VIETNAM AGREED TO EXPAND ITS [ANNUAL] IMPORT QUOTA FOR CAMBODIAS RICE TO 300,000 TONS. The agreement was announced by the meeting of the Cambodian Minister of Commerce with Vietnam high official on Asia-Africa Market Department of Vietnamese Ministry of Industry and Trade. In 2018, official data recorded 26,712 tons of rice export to Vietnam. (Phnom Penh Post).

ON JANUARY 30, 2018 A SEMINAR ON CONNECTING FDI AND SMES WAS HELD IN PHNOM PENH by the cooperation of the CDC, International Financial Corporation (World Bank) and Japanese Embassy, attended by 160 from policy makers, research institutes, local and foreign business associations, and investors in Cambodia. The seminar agenda included existing government policies, challenges & opportunities, results of need survey, good international practices, and Q&A. (Government).

GLOBAL CONNECTEDNESS INDEX (GCI). CAMBODIA MOVED UP FOUR SPORTS TO 49 IN 2018 FROM 53 IN 2015 OUT OF 169 COUNTRIES ON ITS STATUS OF THE WORLDS MOST CONNECTED NATIONS. The move means greater cultural diversity, more choices, more opportunities to learn and develop, greater integration and opening new market opportunities, said the report. Top ten countries of Cambodia’s international flows are China (17%), Thailand (17%), Vietnam (11%), US (9%), South Korea (4%), Japan (4%), Singapore (4%), the UK (3%), Lao PDR (3%), and France (3%). Cambodia is one among four countries – Malaysia, Mozambique, Singapore and Vietnam – where the international flows most exceeded expectations. The Southeast Asian nations Cambodia, Malaysia, Singapore and Vietnam beat expectations by the widest margin, reflecting improved supply chain networks within the region and ASEAN policy initiatives promoting economic integration. Singapore also remains the world’s second most connected country, being the only Asia Pacific country to feature in the Top 10 ranking. Myanmar experienced the biggest improvement, jumping 23 spots to 133rd position. Hong Kong retains its second place behind Singapore on the depth dimension of the Index, which measures the proportion of overall physical, intellectual and human capital that crosses national borders; while Japan and South Korea continue to rank amongst the top 5 in global breadth of the same flows. (DHL Website).

KINGDOM SEES MINIMAL CHANGE IN RICE EXPORTS BETWEEN 2016-2018. The sector appears to face new challenges requiring the government and private sector to work harder to keep the industry healthy. The challenges are centered around the EU market as the bloc imposes tariffs on Cambodia’s rice, added on the existing issues such as higher production costs and a lack of infrastructure. Nevertheless, the industry insiders said the volume of this year’s rice exports will remain steady due to a new quota from China and Vietnam. (Phnom Penh Post).

ON JANUARY 11, AN INVESTOR DELEGATE FROM CHINAS CHONG QING MET WITH THE SECRETARY GENERAL OF THE COUNCIL FOR DEVELOPMENT OF CAMBODIA (CDC) to discuss the investment opportunities on solid waste processing into energy and the construction of the urban sky train. (Government).


TEMI TOURISM PROJECT APPROVED BY THE CDC. The project is Qualified Investment Project (QIP) registered capital at the application and approval of $500.4 million, and promises 5,150 new direct jobs. The project locates in Koh Kong province.


ON 18 FEBRUARY 2019, A CONSULTATIVE MEETING TO COLLECT INPUTS FOR DRAFTING NEW INVESTMENT LAW, from private sector, research institutes, legal consultants, and development partners was held in Phnom Penh by the Council for Development of Cambodia. The new law aims to attract more direct investments and improve Cambodian competitiveness. However, the above mentioned process indicates that the new law adoption is still at least one to two years ahead. (Government).



Biweekly News Collection No.3

(NO.3, JANUARY 29, 2019)


Lack of awareness and Investment hampering local fintech sector. Insiders of the National Bank of Cambodia said at an annual conference to fulfill its potential in the Cambodian economy, fintech must overcome a number of challenges, including lack of consumer awareness, a weak regulatory framework, and scant funding and investment. Additionally, other areas of fintech, like Artificial Intelligence and Big Data are still largely unexplored in Cambodia, while smartphone and internet-related technologies are flourishing. A lot of Cambodian are using smartphones, mostly in urban areas, but they still lack understanding on fintech. At the same time local investors do not seem interested in the sector either. (Khmertimes)

Japanese firms see opportunity in South East Asia garbage. Rapid economic development across SE Asia has created a serious garbage problem, as growing volumes of rubbish highlight a shortage of disposal sites. But in this problem lies an opportunity for Japanese companies with incineration expertise to begin the urgent task of constructing badly needed disposal facilities. Large scale incineration project in SE Asia such as one located about 150 km from Jakarta of Indonesia is support by JICA project. State-of-the-art facilities built by Japanese companies, including Hitachi Zosen Corp and JFE Engineering Corp, also generate power in the incineration process, which allows an early recovery of construction costs. (About 30% of the existing facilities in Japan- approximately 1,100 in total)- are capable of generating power. Japanese companies have increasingly received orders from Europe and other regions and SE Asia in this promising market, amid the Chinese competition. In Thailand, Chinese companies have received an increasing number of orders by offering lower prices. However, there have been complaints about failure, insufficient power-generation capacity and other problems at the incineration facilities built by Chinese companies. (Phnom Penh Post)


Gold Tower 42 to be completed by 2020.After years of delays in construction, building Gold Tower 42 is scheduled to be completed in early 2020. Yon Woo Cambodia, the company that owns the building, reached an agreement in November 2017 with Shenzhen Hongtao Decoration and Weimin Construction & Engineering, which will be in charge of completing the project. The project began in 2008 and has already been delayed three times: first in 2009, following the global financial crisis, and again in 2012. Construction resumed in 2013 and then stopped again in 2017. Yon Woo Cambodia announced in 2018 that Gold Tower 42 construction has already cost $100 million so far and another $140 million will be spent to complete the whole project. (Khmertimes)

Hyundai joins venture with Vietnamese auto firm. A joint venture of Hyundai and Vietnamese firm Thanh Cong Group JSC was singed to boost sales in the merging market. Two parties signed an initial agreement to establish a sales joint venture with the goal of selling 100,000 vehicles in Vietnam by next year. Sales of Vietnam’s automobile sector jumped 27% to 287,949 units in 2018 from 226, 120 in 2017. In order to achieve the sales goal, Hyundai will increase production to 100,000 vehicles in the second half of the next year from 60,000. (Yonhap News Agency).

Chip Mong Group bank unveiled. President of Chip Mong Commercial Bank Plc, Yew Wan Kup said the bank obtained an in-principle license from the National Bank of Cambodia in May 2018 and has been building up its team since then. The bank will begin operations by offering banking products and then gradually move to the latest digital banking ones. (Phnom Penh Post).


Ministry of Commerce to lose $60M a year in revenue. The ministry of Commerce will lose $60 million in revenue annually after the government eliminated export procedures in a campaign to boost competitiveness. (Phnom Penh Post).

Ministry of Commerce is drafting the Law on Customer Protection. The law is expected to promote the fair competition among business people and improve customers’ welfare. (Ministry’s annual report 2018).

Cambodian government reveals the team to construct the draft of the Digital Economy Policy. The team consists of 23 people mostly from the Ministry of Economy and Finance and Supreme National Economic Council. (Sub-decree).


Trade deficit grows once more. Cambodia’s trade deficit with the rest of the world continued to widen last year to $5.2 billion, as the imports outstripped the exports once again, according to a report of the National Bank of Cambodia. A total import in 2018 was at $18.8 billion of goods and a total export was at $13.6 billion. The annual growth rate of import was at 21.3% and export was 21% in 2018. Increasing demand for goods such as construction materials, vehicles, food-related goods, as well as increasing price of imported oil and more demand for raw materials for manufacturing sector are the main causes of accelerating imports. Business Research Institute for Cambodia (BRIC) chief economist Hiroshi Suzuki said it is common for developing countries like Cambodia to see a trade deficit increase during high growth stages because to maintain high growth it is necessary to improve new equipment and raw materials for production – same situation of Japan in high growth period between the 1950s and 1960s. Cambodian trade account deficit has been completely offset by the surplus of service accounts – mainly in tourism- official development assistance, and foreign direct investment. (Phnom Penh Post).

Biweekly News Collection No.2

(NO.2, JANUARY 18, 2019)


SSEZ exported $372 million in 2018. Exports from Sohanoukville Special Economic Zone (SSEZ) increased 68% from 2017. The 1,113 ha SSEZ has 161 registered factories and registered investment capital about $918 million. The industrial zone creates 22,495 jobs. The factories produces textiles, electrical, accessories, shoes, travel goods, electronic products, tires, car parts, office equipment and supplies, furniture and sports equipment. (Phnom Penh Post)

International airports handled over 10 million passengers. Combined passengers passing the three international airports in Phnom Penh, Siem Reap, Sihanoukville in 2018 totaled 10.5 million – 20% up over 2017. (Phnom Penh Post)

Cambodian rice to lose EU duty-free status. The decision will be in effect for three years from January 18, 2019 during which time the tariff will be steadily reduced. The sector will forced to pay $53 million in first year based on the amount of Kingdom exported rice to EU in 2018. EU absorbed around 43% or 269,127 tons of total export. Exporters and economists shared similar views that the solutions to overcoming the EU decision are to lower operating costs and diversify markets. Rice Exporter Association expected the increasing export to China because China provided Cambodia the rice export quota of 300,000 tons per last year but the Kingdom could only export 170,000 tons. (Phnom Penh Post)

Kingdom’s rice exports down 1.5%. Rice export dropped due to the industrial lingering challenges – the cost of production and competition with the international market. Export in 2018 totaled 626,225 tons compared with 635,679 tons in 2017. (Phnom Penh Post)


German chemical firm opens. BASF SE announced it had inaugurated its own company in Cambodia to offer a range of solutions for diverse industries, after working through distribution partners since 2014. The company’s main business in Cambodia will be chemicals (monomers and intermediates), performance materials (polyurethane solutions), nutrition and health and agriculture solutions – innovative and sustainable solutions to support the growth of strategic industries like furniture, rubber, footwear, nutrition and health, and agriculture. (Phnom Penh Post).

Royal Field Development tower begins construction. The $150 million multi-purpose tower, which is a joint venture between local company and a well-known US hotel chain, began construction and is set to open in 2022. The tower includes 3 star hotels Fairfield by Marriott Phnom Penh, is located on Russian Boulevard, next to the 7 Makara flyovers. The joint venture is between the Royal Field Development Company Limited, a subsidiary of Chip Mong Group, and the US’s Marriott International Inc. (Phnom Penh Post)

SME Bank set to launch later in 2019. New bank with initial capital of $100 million set to provide financing for SMEs is set to launch this year as fund is set in place for the operation. The new bank will prioritize Cambodian agribusiness and SMEs that linked to foreign direct investment, the tourism sector and the tech start-ups. (Phnom Penh Post).

Acleda Bank, CBC ink business partnership. The partnership will provide financial health check services, which allows clients from financial institutions to check their own credit history at Acleda Bank. Before the partnership, the only one option is to go to CBC. Acleda branch coverage is the advantage for this partnership. (Phnom Penh Post)


Government to harness tech to increase economic growth. A technical working group of the government is established to formulate a digital economy policy which will functions as the roadmap to boost the Kingdom’s economy through technical innovation. The team will seek one to two years to finalize the policy. (Phnom Penh Post)


Government offers massive tax break to CSX firms. The government has granted a huge tax incentive to companies listed on the CSX – a 50 percent reduction on income tax and eliminating all tax debt if the firms are listed on the CSX within three years from now. The sub-decree also states that firms listed within the period will be granted tax relief, including indemnity from paying full income tax, withholding tax, value added tax, specific tax on certain merchandise and services, and public lightening tax. (Phnom Penh Post)

Procedural details for local SME tax incentive will be completed by end of January. Six priority sectors include agro-industries, food production and processing, manufacturing of products used in waste processing and tourism, manufacturing of parts and equipment supplied to other producers, research and development of IT including innovative equipment management services, and enterprises developing SME commercial clusters. Incentives range from exemption of income tax from three to five years for the SMEs in the above sectors which use 60% of domestic raw materials, increase number of employee by at least 20% or located in SME clusters. (General Directorate of Taxation)