Acknowledging the importance of creating a more conducive and preferential environment for 2-way trade and investment, Vietnam and Cambodia last week agreed to provide effective facilitation to investors and enterprises from one country to operate in the other, during an official visit to Cambodia by Prime Minister Pham Minh Chinh.
The two sides also agreed to ensure effective implementation of the Investment Promotion and Protection Agreement and the Agreement on Avoidance of Double Taxation. In all, Vietnam and Cambodia inked 11 cooperation agreements (see box).
“Both sides expressed their commitment to further promoting and facilitating bilateral trade, particularly border trade, through the effective implementation of the newly signed Agreement on Border Trade and the MoU on the development and connection of border trade infrastructure. On that basis, the two sides undertook to deepen economic ties between bordering provinces,” read a joint statement released during this visit.
|Cooperation is ramping up in sectors from labour to agriculture, photo: Le Toan |
They emphasised the need to enhance connectivity between the two economies, both in terms of physical infrastructure as well as institutions and policies, including through expediting the completion of the Master Plan on Vietnam-Cambodia Economic Connectivity 2030.
Currently, Vietnam is constructing an expressway running from Soc Trang province’s Tran De port to An Giang province, both in the Mekong Delta region; and another running from Ho Chi Minh City to the south-eastern province of Tay Ninh. The two expressways are connected with border gates to Cambodia, as well as other expressways.
“Vietnam is also studying the construction of railways and roads to further connect it with other regional nations,” said PM Chinh at last week’s forum on trade and investment promotion in Cambodia.
Both countries have vowed to boost the connectivity between both economies in hard infrastructure and other policies, with priorities placed on ramping up digital transformation cooperation between state management agencies and enterprises.
PM Chinh suggested that Cambodia give more favourable conditions to Vietnamese businesses to conduct long-term business and investment activities in Cambodia, based on mutual benefits. “Vietnam always creates the best conditions for both nations’ enterprises to implement business and investment activities.”
Bilateral trade and investment ties between Vietnam and Cambodia have been flourishing, with a 2-way trade turnover hitting $9.54 billion last year, up 79.1 per cent over 2020. The figure reached $8.45 billion in the first nine months of this year, up 16.7 per cent on-year. This included $4.55 billion for Vietnam, up 28.8 per cent on-year, and $3.89 billion for Cambodia, up 5.1 per cent on-year. The figure is expected to increase to about $10 billion for the whole of 2022.
Vietnam has placed funding into almost 200 projects in Cambodia thus far, with total registered capital of $2.93 billion, making it the biggest ASEAN investor in Cambodia and among five biggest foreign investors in this nation. Cambodia is also the second-largest overseas investment market for Vietnam, which is now investing in 79 countries and territories.
Vinamilk last week announced that it will raise its total capital for projects in Cambodia to $42 million and will construct a dairy farm there with an annual output of over 4,000 tonnes of milk materials. Since 2014, Vinamilk subsidiary Angkormilk has been operating a $23 million factory which annually produces about 50 million litres of assorted types of milk.
Vietnamese investors began speeding up their investments in Cambodia in 2008, with focus laid on the sectors of rubber plantation, telecommunications, property, services, and banking. Many major Vietnamese rubber plantation projects, for example, have been implemented in Cambodia by Vietnam Rubber Group, Hoang Anh Gia Lai Group, and CT Group.
The two nations have also established an aviation venture, a fertiliser production factory, Metfone Telecommunications, factories to produce sugar and ethanol, and a thermoelectricity plant inside Cambodia.
Telecommunications giant Viettel is also expanding its presence in Cambodia, while Vietnamese lenders BIDV, SHB, MB, Sacombank, and Agribank are also performing well in this nation. Meanwhile, Cambodia currently has 28 valid investment projects in Vietnam registered with over $70 million in capital.
Vietnam and Cambodia have also boosted bilateral ties in many other sectors such as education and training, transport, culture, healthcare, and telecommunications. The former annually provides hundreds of scholarships for students of the former to study in its territory.
Documents inked during Cambodia visit last week
- MoU on types and quantity of commercial vehicles for a protocol on road transport
- MoU on agricultural cooperation
- Cross-border trade agreement
- Agreement on administrative cooperation regarding EU Customs Law on bicycle spare parts
- Agreement on administrative cooperation under Part No.18(3)(B) of Customs Regulation 2020
- Agreement on cooperation in radio and television until 2025
- MoU on cooperation in post, telecommunications, IT, and digital transformation
- MoU on cooperation between Committee for Ethnic Minority Affairs and Cambodia’s Ministry of Cults and Religions
- MoU on labour cooperation
- MoU on cooperation in renewal in finance and payment system
- MoU between Viettel Cambodia and Cambodia’s Ministry of Post and Telecommunications
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