China and Cambodia have signed a free trade agreement which will reduce tariffs and boost market access between Beijing and one of its most important Asian allies.
The deal was sealed on Monday in Phnom Penh at the end of a two-day visit by Chinese Foreign Minister Wang Yi who had lengthy discussions with Cambodian Prime Minister Hun Sen.
The agreement, which was put together in under a year, covers trade, tourism and agriculture. Both countries will cut duties on their products early in 2021.
The two countries also signed an aid package from China worth US$140 million for priority infrastructure projects in Cambodia this year, official media Fresh News reported Monday.
The deal will be a much-needed boost for Cambodia, which lost part of its special trade preferences with the European Union in August over human rights concerns. The loss of this key market for its exports convinced the Cambodian government to focus its economic attention on China, the largest investor in the country, accounting for over 40% of foreign investment.
Monday’s agreement is one of the first fruits of that decision.
Wang also promised that Cambodia would be one of the first countries to receive Covid-19 vaccines developed by China.
Wang Yi’s visit to Cambodia is part of a five-day tour of several Southeast Asian countries that will also take him to Malaysia, Thailand, Laos, and Singapore.