Cambodia and Japan signed seven Memorandum of Understanding (MoU) at the 50th ASEAN-Japan Anniversary Summit where Prime Minister Hun Manet discussed trade and investment issues with Japanese premier Fumio Kishida.
According to PM Hun Manet’s Facebook post, the MoUs signed between December 15 and 19, focused on development projects such as hydrography, water supply, and e-government, as well as cooperation in digital, banking, and energy.
This year also marks 70 years of diplomatic ties between Cambodia and Japan, Hun Manet said, noting that it is a “special year” for both to upgrade their relationship to a “comprehensive strategic partnership”. During the bilateral meeting, the two leaders discussed strengthening and expanding cooperation between the two countries, with a focus on promoting investment, trade and private sector relations.
In the first 11 months of 2023, the value of trade between Cambodia and Japan amounted to $1.63 billion dollars, a decline of 7.9 percent from the corresponding period last year.
Progress in Japanese investment
In Japan, Hun Manet attended several private business meetings to discuss the advancement of investment projects in Cambodia. On December 16, he met with Sumitomo Corporation to talk about investment activities in Cambodia and ASEAN, which touched on energy, electronics, manufacturing, infrastructure, broadcasting and digital sectors.
Potential investors, corrugated box manufacturer Ehime Package Co Ltd, biotechnology firm Pharma Foods International Co Ltd, electronics component maker Minebea Mitsumi Inc, automotive parts supplier Yazaki Corporation and Japanese conglomerate KOJIMA Holdings Co Ltd, and many other companies have voiced their intention to expand into Cambodia. Responding to this, Hun Manet thanked Japanese investors for their contribution to Cambodia’s economic growth thus far.
The government has been focusing on business sustainability and ensuring an amicable investment environment via new policies, mechanisms, legal frameworks, and supporting infrastructures such as incentives, to entice local and foreign investors, Hun Manet said.
Field of technology
Government spokesperson Pen Bona told CamboJA that one of the main objectives for the prime minister’s visit to Japan was to meet with as many private companies as possible to attract more investment.
Bona said Japanese investors, such as Aeon and Minebea Mitsumi, have recently shown increased interest in investing in Cambodia, adding that continued Japanese investment has created many jobs for Cambodians and seen economic growth.
Hong Vannak, an economist at the Royal Academy of Cambodia (RAC), told CamboJA that Japan is an industrialized country, especially in terms of technology. Thus, Hun Manet’s meeting with Japanese companies is crucial in order to attract them to explore investment opportunities in Cambodia, particularly in the field of technology.
Pressure by the US
However, within the framework of Asia, Japan has not yet been able to decide on large-scale investment as it is allegedly “influenced by the US”.
“Japan does not seem to have the so-called strong independence from the US, due to its influence by US politics and cooperation,” Vannak said. “Before any large-scale investments are made in any country, it has to [take note] of the pressure by the US.”
The Japanese embassy in Cambodia did not respond to questions by the publication date, noting that they would get back by the end of this week.
In a recent visit to Cambodia by Melissa A Brown, the US deputy assistant secretary, said Cambodia has to combat corruption and ensure that the rule of law is respected in order to attract foreign direct investment, including US investors’.
Meanwhile, Vannak said Japan has participated in small and medium-scale investments in Cambodia such as logistics, agriculture and process manufacturing.
He added that due to the increasing cooperation between Cambodia and China, Japanese investments in electricity projects may not be possible, but technology is feasible with digitalization in the process.
