Property News Roundup 3rd June 2024

We’re delighted to share the weekly news highlights below.

1. Funan Techo Canal Project to Open in August 2024
The Cambodian government has announced the commencement of the Funan Techo Canal project, a $1.7 billion investment slated to begin in August 2024. This announcement was made by PM Hun Manet during the inauguration of various achievements at the Cambodian Buddhist Cultural Center on 30 May 2024. The new waterway project will span approximately 180 km, starting from the Takeo Canal of the Mekong River, passing through the Ta Ek Canal of the Bassac River, then entering the Ta Hing Canal of the Bassac River, Koh Thom district, and continuing to the sea in Kep. It will traverse four provinces: Kandal, Takeo, Kampot, and Kep.

30 May, 2024 | Construction & Property | Link: https://tinyurl.com/yk9aezjh

2. Phnom Penh’s Third Ring Road renamed as Xi Jinping Boulevard
The Cambodia government has officially renamed the Third Ring Road in Phnom Penh “Xi Jinping Boulevard” in honor on the Chinese President, who has been a key figure in enhancing Cambodia-China ties as well as economic partnerships. An official ceremony for renaming the road was held at the Peace Palace, presided over by Prime Minister Hun Manet and Wang Wentian, Chinese Ambassador to Cambodia. Director-General of the International Relations Institute at the Royal Academy of Cambodia said that Cambodia naming a structure after a person or a country signifies that the Kingdom has placed great respect and honor on the individual or country who bears the name.

29 May, 2024 | Khmer Times | Link: https://tinyurl.com/mr2th75n

3. PM reveals the project to build a new road connecting Kampong Speu to the Koh Kong port
PM Hun Manet has unveiled plans for a new road connecting Kampong Speu to the Koh Kong port, aimed at harnessing the region’s potential akin to that of Phnom Penh. The PM highlighted the strategic importance of constructing a road linking Koh Kong province’s port to Kampong Speu. This initiative is expected to unlock significant economic opportunities for Kampong Speu, emphasizing the critical role of human resources in driving this development. He urged the younger generation to enhance their skills and capabilities to mirror Phnom Penh’s development success.
31 May, 2024 | Construction & Property | Link: https://tinyurl.com/wsudph64

4. China considering additional SEZs in Kingdom
China has agreed to study the possibility of creating more special economic zones (SEZ) in Cambodia, while pledging to encourage Chinese companies to invest in the Kingdom, as well as expanding agricultural imports from Cambodia. The agreement were reached during a meeting between Chinese Foreign Affaires and Cambodia Minister of Foreign Affairs and International Cooperation. China reaffirmed its support for major infrastructure development projects in Cambodia, including transportation, logistics and irrigation systems, such as the “strategically important Funan Techo Canal”. Under the Hexagon Cooperation, Cambodia expects China to increase its investment in infrastructure and increase imports of Cambodian agricultural products. It also believes China will boost cooperation in skills development through increased cooperation with the Ministry of Labour and Vocational Training,
28 May, 2024 | Phnom Penh Post | Link: https://tinyurl.com/4788mday

5. AMRO forecasts that Cambodia’s economy will grow by 5.6% by 2024 and 5.9% by 2025
The ASEAN + 3 Macroeconomic Research Office (AMRO) recently released a positive outlook for Cambodia’s economy, predicting a growth rate of 5.6% in 2024 and 5.9% in 2025. This upward trend signifies a significant improvement compared to the 5% growth recorded in 2023. AMRO’s chief economist, attributes this projected growth to two key factors: “the recovery of the garment sector, along with the sustainable expansion of other manufacturing exports. AMRO acknowledges potential challenges that highlights “external risks and domestic vulnerabilities” that could impact the projected growth trajectory. The report also includes an inflation projection, with consumer price index (CPI)-based inflation expected to reach 2.5% in 2024 and 2.6% in 2025.
29 May, 2024 | Constrution & Property | Link: https://tinyurl.com/wpv8zzmr

6. China is trying to end its ‘epic’ property crisis. The hard work is just beginning
Beijing has launched its most ambitious plan to rescue its property market that investors have eagerly anticipated for months. The package is center around Beijing adoption which is asking local government to buy unsold home from developers and convert them into social affordable housing. It also features a reduction in mortgage interest rate and downpayment ratios. However, it is unclear to where indebted governments can get the funding, beyond the relatively small amounts the PBOC is channeling via state banks. According to Goldman analysis, addressing the oversupply of unsold homes is only the first step and the beginning. The second and third step which involve bosting housing demand and mitigating the contraction in property construction that require more detailed measures to revive consumer confidence and boost housing prices. Making matters worse, the external environment has become increasingly difficult with US government announced new tariff on China.
30 May, 2024 | CNN Business | Link: https://tinyurl.com/pcnh695z

7. Trade recovers fast, surpasses pre-Covid level in Cambodia
With higher disposable income and a growing economy, wholesale and retail trade in Cambodia have recovered post-Covid. And not just recovered but grown higher than 2019 levels. For 2023, the amount of wholesale and retail trade in the country went up to $3.2 billion. 2023’s number not only showed a recovery from Covid, but also higher growth (1.5% up) than the country experienced in 2019 – where retail and wholesale trade was at $3.18 billion. One of the indicators of a more bustling and active retail space is the renting of commercial spaces by large retailers.
30 May, 2024 | Khmer Times | Link: https://tinyurl.com/bdzhdeyr

8. Cambodia deputy PM says Japanese investment to help curb its China dependence
Cambodia expects growing Japanese investment to help curb its economic dependence on China. Sun Chanthol said Cambodia must diversify investment into the nation beyond its “reliance on China alone,” since about two-thirds of all investment capital in Cambodia currently comes from China. Attracting investment from Japan is key to that pus, noting that the government has set up a task force to accelerate value-added tax refunds to Japanese companies after some of them said the process was not fast enough.

31 May, 2024 | Source: NIKKEI Asia | Link: https://tinyurl.com/3v7v47tm

9. ADB announce five-year strategy to partner with Pentagonal Strategy
The Asian Development Bank (ADB) has launched a new country partnership strategy for Cambodia, which closely aligns with phase one of the seventh-mandate government’s Pentagonal Strategy, for the same period of 2024-2028. The five-year strategy covers a wide range of areas of cooperation, including working with the government and other partners to accelerate private-sector-led economic diversification, advance human development and strengthen climate resilience. The strategy will strengthen pathways toward a sustainable, inclusive, and resilient Cambodian economy.

30 May, 2024 | Source: Phnom Penh Post | Link: https://tinyurl.com/2wyfnk3d

10. China mulls record fine for PwC over Evergrande auditing, Bloomberg News reports
China is weighing a record fine for PwC and suspending some of the auditor’s local operations over its role in auditing troubled property developer China Evergrande Group. The fine could be at least 1 billion yuan. while PwC is facing a halt of operation at some of its mainland offices. PwC has been in the spotlight since a Chinese regulator earlier this year found Evergrande had overstated revenue at its main unit Hengda by 564 billion yuan in the two years through 2020. PwC is under a separate investigation initiated by a Hong Kong financial regulator in April after a whistle-blower letter was circulated that raised concerns over audit deficiencies in matters including China Evergrande.

31 May, 2024 | Reuters | Link: https://tinyurl.com/5n8r5wau

11. World Bank finds Chinese company committed violations in Bolivian infrastructure project
A World Bank investigation into a US$230 million infrastructure project in Bolivia found numerous violations committed by a large state-owned Chinese construction company, including disregard for local labour laws and environmental damage, complicating work on an enterprise already delayed and over budget. The bank’s board approved the financing in 2017 and awarded it to the Bolivian Road Administration, which then commissioned China State Construction Engineering Corporation to lead the work. Government officials and representatives of the World Bank assumed that the work would be completed by November 2023. However, the project remains unfinished and numerous problems have arisen since then.

31 May, 2024 | South China Morning Post | Link: https://tinyurl.com/4k3j8r96

12. World Bank’s $40 Million Project To Raise Skills, Jobs in Cambodia
Cambodians are expected to receive improved training and labour market services following a $40 million credit approved by the World Bank’s board of executive directors. The credit from the bank’s International Development Association will support the Skills for Better Jobs Project, aimed at strengthening technical and vocational education and training, improve career guidance and job search support, and better engage employers when developing training programs. Some of the key outcomes of the project include greater employer satisfaction with the skills of graduates, increase in the share of graduates who find jobs paying more than the national median wage, and raising the industry’s voice in training design and delivery, and facilitating dialogue and collaboration between training institutions and employers.
27 May, 2024 | Source: Kiripost | Link: https://tinyurl.com/2whhj8v8