The Chinese company that received the contract for a major airport project in Cambodia’s eastern neighbour, China, has apparently run out of money.
ET learned that while the estimated investment for the airport, which would cover 300 hectares of land, was more than $80 million, the Chinese company suffered huge losses from Covid. Sources say this episode exposed the weaknesses of some Chinese companies involved in overseas projects.
The airport was to be built in Cambodia’s Mondulkiri Province. It is home to the country’s smallest population, despite its large land area.
Cambodia is one of China’s closest allies within the Indo-Pacific Region and a key pillar of the BRI to link Southern China with India Ocean Region.
The Comprehensive Strategic Cooperative Partnership was established in 2010. Since then, many pacts have been signed between China and Cambodia. These include the BRI in 2016, and the Cambodia-China Free Trade Agreement (2020).
These agreements cover a variety of segments including trade, commerce, technology, military, and law enforcement. China is Cambodia’s largest foreign direct investor and holds more than 50% of total investments
The Council for the Development of Cambodia (CDC), approved fixed asset investments from China in 2021 worth $2.32 Billion. This is a 67% increase over the $1.39 Billion a year earlier. Bilateral trade increased 38 percent year-on-year last year to $11.2 billion, while Cambodia continues to experience large trade deficits each year.
Sources claim that imports from China to Cambodia are growing much faster than exports.
China is the largest bilateral lender to Cambodia, with a total outstanding loan of $4.05 Billion as of December 31, 2021. It also ranks among the largest aid partners and official development assistance (ODA) recipients.
Since 2004, China has bankrolled over 100 projects in Cambodia. The majority of the projects were funded through concessional loans: 33 via grants, 65 via concessional loan and two via non-concessional loans.
Prasannkumar is a passionate digital marketer and devoted team leader. He loves trying out and sharing the latest knowledge about industry trends, market growth, and keyword analysis with new google and other search engines algorithm. He effectively knows how content feeds into different subsets of the marketing plan and grasps how to develop and share the content assets on the right channels.