Chinese investment in Sihanoukville Special Economic Zone in Cambodia is changing the lives of workers and their families in the region
Jon Gong worked most of his life as a farmer in a rural region of Cambodia and never dreamed that one day he would own a small cafe.
But in 2012, he opened the Kichisu Village Coffee Shop and now he has a thriving business in the Cambodian county of Modelang.
A bird’s-eye view of Cambodia’s Sihanoukville Special Economic Zone, a cluster of manufacturing companies, developed by the Cambodian and Chinese governments in 2008. Provided to China Daily
Most of his customers work in the Sihanoukville Special Economic Zone, a cluster of manufacturing companies, developed by the Cambodian and Chinese governments in 2008.
“My son, daughter and son-in-law now work in the zone,” Gong said. “Their monthly salaries total more than $800, which is double what people receive outside the zone, so we invest it in our family business.”
Life has changed so dramatically for the 50-year-old budding businessman that he is now planning to build residential property that he will rent out to factory workers at the SSEZ.
“Seven years ago, most farmers and their families in the county had no plans for the future because we had no money,” he said. “Now our family has money, a coffee shop and dreams for the future.”
Gong’s success story is just one of many. In the space of seven years, the SSEZ has become a thriving manufacturing center and home to more than 80 companies, including those from China, Japan, France and the United States.
Many produce fashion products, such as clothing, hand bags and suitcases, for famous brands.
“The SSEZ is the most successful one among the first batch of the eight overseas industrial parks, including those in Russia, Pakistan and Thailand, that were approved by China’s commerce and finance ministries in 2006,” Song Xiaoguo, counselor of China’s Economic and Commercial Counselor’s Office in Cambodia, said. Back in 2012, Cambodia and China set a target of boosting bilateral trade to $5 billion by 2017. And ventures such as the SSEZ are crucial to developing closer economic ties.
“Every month the salary of the employees working here totals more than $1.8 million,” Zhou Haijiang, the president of Hodo Group, one of China’s largest garment manufacturers, said.
“It not only improves the lives of thousands of local families, but also speeds up the industrialization of the country,” Zhou, whose company was one of the first to move into the region, added.
Located in the Cambodian coastal city of Sihanoukville, the SSEZ covers an area of 11.13 square kilometers and is close to the only deepwater port in the country.
“Cambodia is one of the main transport hubs in Southeast Asia and is an important country along the 21st Century Maritime Silk Road,” Zhou said, referring to the Belt and Road Initiative, a development strategy proposed by China in 2013.
“The establishment of the SSEZ will further enhance the ties between the two countries and promote cooperation in business and technology.”
The Sihanoukville industrial complex has become a cornerstone of the economic partnership between Cambodia and China. In 2008, Cambodian Prime Minister Hun Sen attended the groundbreaking ceremony at the SSEZ. He expressed his hopes that it would become the country’s version of Shenzhen, China’s manufacturing powerhouse.
“When the SSEZ was set up, we introduced China’s ‘One-station Service’,” Song said. “This involved all government departments in the project opening up offices in the zone to provide better services to the investors.”
Chinese companies there enjoy quota and custom duty exemptions as well as easy transport links to the deepwater port. But getting the development off the ground was far from easy.
“The zone’s land belonged to more than 300 land owners,” Dai Yue’e, general manager of the SSEZ, said. “We needed to negotiate with each of them.
“We had to measure their land inch by inch because many local people didn’t believe in advanced measurement equipment.”
As manufacturing grows in Cambodia, more companies are setting up businesses in the SSEZ. “Companies from Japan, France and the US have settled here,” Dai said. “With its advantages in taxation, labor costs and transport, more firms will be joining them.”
Based in the Yangtze River Delta, the Ounoya Clear Water Leather Supply Co Ltd opened operations in the economic zone in 2011.
The major leather manufacturer has benefitted from low production costs and preferential financial policies, reporting annual exports of $200 million last year.
“Cambodia has a population of 14 million with 62 percent of working age,” Wu Kun, general manager of Ounoya Clear Water Leather Supply, said. “Our workers receive a monthly salary of $180 to $220. According to local laws, the lowest salary is $128, so we are paying more than that.”
Training is also a priority and more than 14,000 workers have taken part in international trade and business management programs, general manger Dai said.
“I spent two years training in China learning Mandarin,” Lok Vannara, who works as an interpreter in human resources, said. “This job has changed my life.”
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The main street of the Sihanoukville Special Economic Zone. In the space of seven years, the SSEZ has become a home to more than 80 companies. Provided to China Daily
(China Daily 06/30/2015 page15)