Tuesday, December 14, 2010

China is important, but so is prudence

Monday, 13 December 2010
Steve Finch
The Phnom Penh Post

A YEAR after Chinese Vice President Xi Jinping visited Cambodia to sign a staggering US$1.2 billion in economic deals with the government, Prime Minister Hun Sen heads to China for this week’s five-day visit to further entrench economic ties between the two countries.

After the recent introduction of Bank of China, the country’s second-largest in terms of lending, Industrial and Commercial Bank of China, the largest in China, looks set to follow with its first Cambodian branch after a signing ceremony scheduled for this week.

With Cambodia’s banking sector set for another period of consolidation as the deadline for banks to triple the minimum capital reserve requirement to $37.5 million, the entrance of another large Chinese bank points to a shift in Cambodia’s financial sector that could lead to a rise in the influence of banks from the mainland.

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