Multinational Corporations Step up the Search for the ‘Next China’
Jun 20th, 2008 | By Jason Simpkins | Category: Emerging MarketsThe Next Vietnam
If Vietnam is the next China, then Cambodia may be the next Vietnam. Capital interests are beginning to take notice because of its prime location in the fast growing Asia-Pacific region, young and inexpensive work force, rising productivity, pro-business government, stable politics, and strong GDP growth.
In 2006, foreign direct investment totaled $2.6 billion, up from just $340 million in 2004, according to the International Monetary Fund.
Ironically, China has become one of Cambodia’s biggest investors. According to the official China News Agency, 3,016 Chinese companies had made cumulative investments of $1.58 billion by the end of the end of 2007.
With even lower wages, the nation is fast becoming a new Mecca for the world’s textile industry. The industry employs about 300,000 workers and generates annual revenue of more than $1 billion.
“[Cambodia] is where Vietnam was some 8 to 10 years ago,” Marvin Yeo, who co-founded Frontier, which manages the Cambodia Investment and Development Fund, told the International Herald Tribune.
Renowned investment luminaries Marc Faber and Jim Rogers, who are advising some of the private-equity firms that will pour upwards of $500 million into Cambodia, have also praised the country’s investment prospects, the Wall Street Journal reported.
“Cambodia offers an enormous potential for future capital gains,” Faber wrote in a recent newsletter for acolyte investors.
Cambodia’s GDP peaked at 13.5% in 2005 but is expected to slide to a still-impressive 7% or 8% percent in coming years.
Source: Multinational Corporations Step up the Search for the ‘Next China’
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