At present, Cambodia adheres to an open market system. Over the past decade or so, the world has seen rapid economic development in Cambodia, with per capita income growing particularly rapidly, but still at a low level compared to most of its neighbors. Cambodia's two largest industries are textiles and tourism, while agricultural production remains the main source of income for many Cambodians living in rural areas, with the service sector mainly focused on events and catering-related services.
Over the past decade, Cambodia has experienced a long period of economic growth, driven by growth in exports (especially clothing and footwear), increased investment and domestic consumption, with gross domestic product (GDP) growth hovering around 7% per year.
According to Cambodia, Cambodia's GDP will reach 332 in 2023$100 million, an increase of 62%, with a GDP per capita of $1,979. The average annual inflation rate is 3%. According to the National Bank of Cambodia**, GDP is expected to grow by 5% in 20235%, of which tourism grew by 199%, agriculture continued to maintain 11% growth, construction industry growth 11%, industrial growth of 67% (garment industry grew by 5.)9%, non-garment industry increased by 101), the service industry grew by 62%。The average annual inflation rate is 27%。With the implementation of Cambodia's new investment law and the Liberal** Agreement, the Cambodian economy is expected to continue to grow at an annual rate of around 6%, which will help to further promote investment and **.
Cambodia** has made it a priority to attract overseas investment.
Cambodia's preferential policies for foreign direct investment (FDI) include: 100% foreign ownership, up to 8 years of corporate tax reduction, 20% corporate tax rate after the expiration of the preferential period, tax exemption for imported capital goods, no restriction on capital repatriation, etc.
Despite these incentives, Cambodia has not historically seen a large-scale wave of foreign investment. In addition to the relatively small size of the market, there are other factors that hinder the entry of foreign investors, such as corruption, limited skilled labor, inadequate infrastructure, high energy costs, and a lack of transparency in some approval processes. In addition, it is difficult for Cambodian and private investment institutions to negotiate with the business community on new economic policies and regulations, which has also caused great trouble to domestic and foreign investors.
In recent years, China's outward direct investment in Cambodia has increased significantly, becoming an important driving force for economic growth. The increase in investment underscores China's desire to exert influence in Cambodia and Southeast Asia as a whole, and the confidence of China** and Chinese companies in the Cambodian market and Cambodia**.
In the first half of 2023, the Council for the Development of Cambodia (CDC) approved a total of 113 investment projects with an investment amount of 11US$100 million, of which 2200 million US dollars, accounting for 199%；Foreign Direct Investment (FDI) 8900 million US dollars, accounting for 80 percent of Cambodia's total investment1%。China, Vietnam, Seychelles, Thailand and South Korea are the top five foreign investment countries in Cambodia. According to the field, there are 7 investment projects in the agricultural field, with an investment amount of 1$600 million; There are 102 investment projects in the industrial field, with an investment amount of about 8$600 million; Investment in manufacturing industries has also increased, including garment factories, tourism product factories and agro-processing industries.
Cambodia will continue to attract a large number of FDIs as numerous physical infrastructure projects such as commercial and residential real estate developments move forward.
According to the statistics of Cambodian Customs, the total import and export volume of Cambodia in the first half of 2023 will be 236$9, its **mouth 114600 million US dollars, a year-on-year increase of 08%；Imports 122300 million US dollars, down 229%。China, the United States, Vietnam, Thailand and Japan are the top five partners of Cambodia, of which the bilateral amount between Cambodia and China is 61500 million US dollars, a year-on-year increase of 28% (Cambodian exports to China 7.)100 million US dollars, a year-on-year increase of 166%；Imported from China 54400 million US dollars, a year-on-year increase of 12%）。
The main advantages of Cambodia's foreign investment environment are:
1) Implement an open and free market economic policy, with a high degree of liberalization of economic activities;
2) 28 countries and regions, including the United States, the European Union and Japan, have granted Cambodia GSP treatment (GSP); For textile and apparel products imported from Cambodia, the United States will give more relaxed quotas and exemption from import tariffs, and Canada will give preferential treatment such as exemption from import tariffs;
3) Abundant labor resources, low cost, and obvious demographic dividend.