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China’s trade with Cambodia swells

China and Cambodia have seen a 16 per cent rise in bilateral trade volume in the first seven months of the year. Bilateral trade between China and Cambodia has rapidly increased in recent years.

The two countries hope to be able to achieve a target of $5 billion in trade volume by 2017. China is the largest investor in Cambodia. Chinese investments have been made in the fields of energy, garment industry, banking and finance, telecommunications, construction and real estate, tourism, and agriculture. There are more than 3,000 registered Chinese companies operating in Cambodia.

China is one of the top providers of development assistance to Cambodia. The main drivers of the growth of trade between Cambodia and China over the last several years include the strong growth in construction sectors that need to import construction materials, especially from China, while Cambodia exports agricultural products like rice, corn, cassava.

Chinese assistance is mostly in the form of concessional loans. These loans target infrastructure projects, such as roads, bridges, and hydropower projects, and oil and mineral exploration.

As Chinese labour becomes more expensive, and workers become more vocal, Cambodia’s cheap and controlled labor force provides an escape route for Chinese companies.