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Japan Becomes China's Business Rival in Cambodia

ASEAN_Investor
Publish date: Tue, 07 Jul 2015, 12:38 PM
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Marc Djandji, CFA is the Editor-in-Chief of The ASEAN Insider, a subscription-based monthly investment newsletter committed to finding compelling investments backed by powerful structural trends in Southeast Asia. He is also a co-Founder and Partner of ASEAN Strategy Group Ltd., an independent investment banking boutique focusing on cross-border M&A and corporate finance advisory for companies in the small to mid-market segment in Southeast Asia.
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Cambodia Investment

PHNOM PENH (Khmer Times) - Prime Minister Hun Sen returned Monday from a weekend in Japan that included a day-trip 1,000 kilometers south of Tokyo to Yamaguchi Prefecture, home base of Prime Minister Shinzo Abe. The Cambodian leader's trip out of Tokyo followed his participation in Prime Minister Abe's summit on Saturday with leaders of five Mekong nations - Cambodia, Laos, Myanmar, Thailand and Vietnam. But the Sunday outing to the Japanese prime minister's homeland indicates Japan's special courtship of Cambodia. As in the dating game, it can be beneficial for a country to have two suitors. Everyone knows about China's massive aid, trade and investment with Cambodia. But Japan's courtship is getting more and more serious. This year's example was the magnificent Tsubasa Bridge over the Mekong River, the longest bridge in the Kingdom. After opening in April, this Japanese-financed cable-stay bridge now speeds traffic between Phnom Penh and Ho Chi Minh. Look ahead, and within five years, Japanese money will have paid for upgrading National Road 4. Trucks, buses and cars will speed between Phnom Penh and the Thai border. Road work will include construction of a 47-kilometer bypass road around Battambang. The key here is Thailand, a country with the highest wages, the oldest population, and the greatest political instability among the five nations of the Mekong region. Thailand's per capita income of $5,390 is five times higher than Cambodia's income of $1,018. Japan is literally paving the way for Japanese investors to shift east, out of Thailand, to Cambodia. From 2010 to 2012, Japanese investment in Cambodia soared 10-fold, from $35 million to $328 million. In the first quarter of this year, 183 Japanese companies received investment licenses from Cambodia. From a non-player a decade ago, Japan suddenly is Cambodia's third-largest source of investment, after Vietnam and China. Many of these Japanese companies come from Thailand, where Japan has long been the largest source of foreign investment. So Cambodia has the enviable position of sitting between two rich suitors, each eager to win favor in the Kingdom.

By khmertimeskh.com

The post Japan Becomes China's Business Rival in Cambodia appeared first on Asean Investment | Marc Djandji Blog.

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