Cambodia must embark quickly and cohesively in an effort to diversify its manufacturing base to counteract the impact of any action taken against its major export industries, a Chinese official said.
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Chinese investors voiced their concerns over ongoing uncertainty regarding the European Union’s threat to cancel its Everything-but-arms (EBA) scheme with Cambodia, which may become effective in as little time as 18 months.
Huang Xiqiang, deputy director general of the foreign affairs office in the Chinese province of Jiangsu, also voiced his concern.
“18 months may seem like a very long time, but, in reality, time will fly if all concerned do not take action to negate the impact of this new form of trade sanction.
“In any event, Cambodia’s manufacturing base is still narrow and small. It needs to diversify its manufacturing base, moving towards other labour-intensive industries and industries that demand a semi-skilled workforce, instead of relying only on garments,” said Mr Huang.
He pointed out that as a close ally and strong trading partner, Cambodia is important to China, adding that Chinese authorities do not want to see the Kingdom’s labour force suffer because of sanctions.
Mr Huang added that diversification is the key, in addition to upskilling the country’s human capital through education and vocational training, which will enable investors to set up production facilities that require a more skilled workforce.
With more than $200 million in investments in Cambodia’s Preah Sihanouk province, Jack Chen, president of Sihanoukville Special Economic Zone (SSEZ), echoed Mr Huang’s sentiments.
He told visiting Cambodian reporters that his company – which owns a suit manufacturing facility in SSEZ – was worried about the possible cancellation of the EBA deal.
“We ship to many countries and not just EU member nations. However, we are still concerned about the impact as there will be some negative developments if the EBA was indeed removed in the years or months to come.
“We, as the developer of SSEZ as well as an investor in the zone, are looking at various options. In China’s Wuxi city, where we are headquartered, we started as a cottage industry before growing to become a giant in garments, tire manufacturing, bio-medicine and real estate development,” he said, adding that this may be the course to follow in Cambodia.
Mr Chen said their next venture will probably be in real estate. They are considering building accommodation units for the thousands of workers employed in SSEZ, which will make the export zone more self-sustainable.