A model of China-Cambodia pragmatic cooperation - Sihanoukville Special Economic Zone

1 Overview of the SSEZ

1.1 Introduction

Sihanoukville Special Economic Zone (SSEZ) is one of the largest and most developed SEZs in Cambodia. It is jointly developed and constructed by private companies from both Cambodia and China, and is located near Sihanoukville Port, the country's largest trading port. It covers an area of 11.13 Km2, facing the world and is committed to building a multinational investment platform for companies around the world. The SSEZ has become one of the key projects under the China's Belt and Road Initiative (BRI) and has been written into the “Action Plan on Building a Cambodia-China Community with a Shared Future”

1.2 Location Advantages 

The Sihanoukville Special Economic Zone (SSEZ) is situated strategically in close proximity to National Road 4, about 3km from Sihanoukville International Airport; 4km from Phnom Penh-Sihanoukville Expressway; and about 17km from Sihanoukville (Sihanoukville). 

With the strategic location close to the Cambodia's only deep-sea port, the SSEZ has the following advantages:

①Convenient shipping conditions: The SSEZ is only 12 kilometers away from Sihanoukville Autonomous Port, will enable it to ship goods to the ASEAN, the Middle East, and European and American markets.

②Close to the Southeast Asian market: It is close to major Southeast Asian economies such as Thailand and Vietnam, which can help facilitate regional economic cooperation.

③Complete infrastructure: It has independent water, electricity, roads, and communication systems to provide efficient services for enterprises.

1.3 Industrial positioning

The first phase of the industry focus on textiles & garments, luggage and leather goods, wood products, etc. as the main development industries. 

The second phase of the industry focus on mainly introducing auto parts & tires, new materials, hardware machinery, building materials, home furnishings.

1.4 Key data (2024):

① In 2024, SSEZ had attracted 28 new enterprises in 2024, bringing the total number of enterprises in the zone to 202, with approximately 32,000 jobs created.

②The total trade volume of the enterprises in the SSEZ reached US$4.07 billion last year, a year-on-year increase of 21.3%.

③ Chinese-funded enterprises accounted for more than 80%, forming an industrial chain of "Chinese technology + Cambodian manufacturing".

2 Core Advantages: Why do global companies choose SSEZ?

2.1 Preferential tax policies

For companies in Cambodia's Sihanoukville Special Economic Zone (SSEZ) can enjoy the following tax preferential policies provided by the Cambodian government:

2.2 "One-stop" service

① Providing lease of land, standard factory buildings, apartments, dormitories, etc.

② One-Stop Service from the government department for document processing and administrative approval

③ Contacting with local universities and recommend suitable management personnel to enterprises

④ Two universities named Cambodia-China Friendship Institute of Technology and Sihanoukville Institute of Business and Technology for professional talent training

⑤ Introduce logistics, insurance, banking and other service agencies to provide security, property and other services

⑥ Establishing legal advisory platform to provide professional legal service to enterprises.

2.3 Infrastructure strength

① Energy self-sufficiency: there are three national grid power access points in SSEZ, including a national substation(150MW) and a thermal power plant (1st phase-35MW) built by SSEZ. 

In 2024, the second phase of Cambodia's national high-voltage substation with a capacity of 100MW has been completed and put into operation, and the laying of steam pipelines will be carried out simultaneously; the construction of the reservoir expansion project started and the construction of the high-level water tank was completed, making the SSEZ's industrial acceptance capacity will be further enhanced.

② Closed ecological system: During the development and construction, the SSEZ carried out greening while building, and built rainwater and sewage diversion discharge pipes in the zone to treat industrial and domestic sewage before discharge. It also built a first-phase sewage treatment plant with a capacity of 5,000 cubic meters per day to ensure that all wastewater in the zone is treated to meet standards before discharge, thereby maintaining the ecological safety of surrounding water sources.

③ Integration of industry, city and education: The hospitals, schools and commercial streets in the Sihanoukville Special Economic Zone are well-equipped, forming a "15-minute living circle". There are two universities in the Sihanoukville Special Economic Zone, which provide professional talent support such as skills and language for the development of enterprises. It has also sponsored two groups of Cambodian youth to study in China, and jointly carried out skills and language training with Wuxi Vocational Institute of Commerce (WXIC) . 90,000 people have received training so far.

3 Successful Cases: How enterprises take advantage of SSEZ and rapidly developed

General Tires Technology (Cambodia) Co Ltd.

General Tires Technology has a total investment of approximately US$500 million in the SSEZ, making it the largest single investment project in the zone. On August 28 2024, the Company held a ceremony for the first batch of the second phase project to roll off the production line at its production base in SSEZ, the designed production capacity of the Phase II project includes 3.5 million semi-steel radial tires and 750,000 full-steel radial tires per year. 

The superior geographical location of the SSEZ makes the company's tire export more convenient, and the thermal power plant in the Special Economic Zone provides a guarantee for the supply and operation of energy such as electricity and steam for the factory.

4 Future Development Prospects

As an important part of the “Belt and Road” initiative, SSEZ has broad prospects for future development:

① Infrastructure upgrade: plans to expand infrastructure such as roads, electricity, and logistics centers to enhance the park’s service capabilities.

② Industrial upgrade: introduce more high-tech manufacturing companies to promote industrial diversification.

③ Green development: strengthen environmental protection measures and promote sustainable development.

With its strategic geographical location, complete infrastructure, preferential policies and broad market prospects, Sihanoukville Special Economic Zone has become one of the most attractive investment destinations in Cambodia. For companies that want to expand the investment into the Southeast Asian market, SSEZ is undoubtedly an ideal choice.

(Data source: Sihanoukville Special Economic Zone's official website)