China agrees $1.2bn in aid for economic development

Tuesday, December 22, 2009

Deals signed by vice president more than total offered previously

Photo by: HENG CHIVOAN

Prime Minister Hun Sen and Deputy Prime Minister Sok An (right) welcome China's Vice President Xi Jinping (second from left) to Phnom Penh on Monday ahead of a signing ceremony that saw the world's third-largest economy offer the Kingdom $1.2 billion in financial aid.

CHINESE Vice President Xi Jinping oversaw the signing of US$1.2 billion in economic agreements Monday during a state visit to Phnom Penh, deals worth more than the cumulative economic aid offered previously by Beijing over the past 17 years.

Xi’s delegation agreed the raft of aid deals following a reception with Prime Minister Hun Sen in what was the vice president’s first official visit to Cambodia since taking up the position last year.

The agreements – 14 in total – will see China offer economic grants and soft loans for the construction of roads, transport infrastructure, communication equipment and irrigation projects.

Other agreements include a soft loan for an electricity transmission loop line around the capital to be built by China National Heavy Machinery Co, and economic and technical cooperation with an interest-free loan of 50 million yuan ($7.3 million), along with another grant of the same value – also for technical assistance – although their exact use was not specified.

From 1992 up until Monday, Beijing had offered $930 million in low-interest loans and financial aid to the Kingdom, according to Information Minister Khieu Kanharith.

The world’s third-largest economy would also offer the Kingdom preferential market access for exports, he added.

“China allowed Cambodia to export 418 types of local products,” Khieu Kanharith told reporters in Phnom Penh after the signing ceremony.

However, the Kingdom does not produce sufficient exports, he said, adding that Chinese firms are welcome to invest further in Cambodia.

In the first nine months of 2008, approvals of Chinese investment in Cambodia hit a record $3.94 billion, according to figures by the Centre for the Development of Cambodia, compared with just $339 million during the same period this year.

Both sides agreed to increase cooperation within all sectors of the economy, the minister said.

Xi, who arrived in Cambodia on Sunday, will leave the Kingdom today after meeting with Senate President Chea Sim, National Assembly President Heng Samrin and King Norodom Sihamoni.