Why Cambodia?

OVERVIEW OF THE CAMBODIAN ECONOMY

A country of almost 17 million inhabitants, Cambodia has enjoyed sustained growth for over twenty years (an average of more than 7% since 2000). While almost 75% of the population is still rural, urbanisation is well under way and agriculture now accounts for less than a quarter of GDP. Traditionally driven by services (tourism and finance), textiles and construction, while the share of agriculture is declining, GDP is set to grow by 5.6% in 2023, to nearly USD 30 billion. It is expected to grow by 6% in 2024, the second fastest in ASEAN and one of the fastest in the world.

As a member of ASEAN, the WTO, RCEP and the ASEAN Economic Community (AEC), Cambodia has benefited from the region's dynamism. This has taken the form of an influx of foreign investment, mainly from Asia (China, Japan, Korea, etc.). A very open trading country, its foreign trade is in deficit and asymmetrical, with the bulk of Cambodia's imports coming from Asia - especially China - while almost two-thirds of its exports are destined for the European and American markets. Cambodia still benefits from strong support from multilateral and bilateral donors (more than one billion dollars in grants and concessional loans per year, including 200 million from AFD), as well as commercial advantages (privileged access to European and American markets).

After the health crisis, bilateral trade has resumed, even if the international context is not favourable. Despite everything, French exports rose by 31% in 2023 (to €171m) and should continue to grow in 2024. Imports are down slightly to €1.2bn, and remain concentrated on textiles and agri-food products. In terms of FDI, France is present in most sectors of the Cambodian economy, but particularly in energy, infrastructure (transport, public works) and tourism.

In addition to the subsidiaries of major groups, the existence of a dynamic network of French companies abroad (over 400) explains these investments and the French presence. For over a year now, bilateral relations have been revitalised with visits from Prime Minister Hun Sen (December 2022), the King (November 2023) and the new Prime Minister HUN Manet (January 2024). The new government, appointed in August 2023, is very pro-active and specifically encourages French companies to invest in Cambodia (the investment law, in force since June 2023, provides a favourable framework). So the Cambodian market offers some interesting prospects, and it's an open one, even if understanding its specific features is useful if you want to succeed.

Source : Economic Department of the French Embassy in Cambodia (note adapted by the CCIFC)