PHNOM PENH, Cambodia, Aug 13, 2009 (Asia In Focus via COMTEX) -- Flows of foreign direct investment into Cambodia dropped by 50 per cent in the first six months of 2009, compared with the same period last year, local officials have said. Investment by China and South Korea - the two biggest investors in 2008 - decreased by 93 per cent and 58 per cent respectively, while Japan's investment surged beyond expectations, the Council for the Development of Cambodia (CDC) said in its latest report.
Showing posts with label Foreign Direct Investment. Show all posts
Showing posts with label Foreign Direct Investment. Show all posts
Thursday, August 13, 2009
Monday, September 15, 2008
Korean investors reach for Cambodian skies
Sep 16, 2008
By Geoffrey Cain
Asia Times (Hong Kong)
Led by property developers, South Korean investors accounted for over 70% of the $1.5 billion worth of foreign direct investment (FDI) that entered Cambodia in the first half of this year, nearly three times higher than the $520 million it received all of last year. South Korean investments have since 2006 dwarfed Chinese inflows, which have been more critically scrutinized, but only represented 10% of total FDI in the first half of 2008.
Cambodia has long been one of Southeast Asia's laggard economies, plagued by its war-torn past and a backward period of communist-led central planning. With economic opening and market reforms, Cambodia's economy is zipping along nicely, with gross domestic product surging at 9.5% last year. Nowhere is that fast growth more noticeable than in the city's fast-changing skyline.
With all the building activity, some are beginning to wonder if the economics of the building spree compute and how the broader Cambodian economy might be affected if South Korea goes into financial meltdown, as some analysts have predicted. South Korean investors are overseeing and building at least eight major property projects in Phnom Penh, but that number is constantly changing as new concepts arrive at and leave the drawing boards.
There are clear risks to the high-end developments, which are banking heavily on the arrival of high spending foreigners once a purported major oil and gas find on the country's southwestern coast is realized and exploited. The World Bank once estimated the country's total offshore production potential to be at around 2 billion barrels, though Chevron, the US energy company managing the concession, has remained tightlipped about the details and viability of the fuel find.
Consider, for instance, Gold Tower 42, a $240 million condominium project financed by South Korea's DaeHan Real Estate Investment Trust and built by developer Yon Woo. The high rise project is selling units for between $460,000 to $1.5 million and the developer claims 75% of the tower's space has already been sold, mostly to Chinese and South Koreans. Considering 33% of all Cambodians earn less than US 50 cents a day, according to government statistics, the project's pricing is out of reach for nearly all local buyers.
The same is true of the $2 billion Camko City, a satellite city built and owned by South Korean developer World City Company, which entails an international university, condominiums, exercise centers and modern shopping for a community of over 1,000 well-heeled residents. Another South Korean-built mini-neighborhood, Sun Wah International Finance Center, is also on the drawing board and promises similar top-notch amenities.
Camko City, like several other South Korean-led developments, has stirred local controversy and carries big political risks. To make way for the project, the developers completely filled Pong Peay Lake, once a main outlet for the city's dysfunctional drainage system, while evicting long-term residents with compensation at one-tenth of the property's market value, rights groups say. According to Cambodian land laws, lakes are public property and may be developed only in a "rational" manner.
Bypassing donors
South Korea's building spree comes just 11 years after the two countries re-established formal diplomatic ties, which were broken off in 1975 when the communist Khmer Rouge regime took power. Cambodian Prime Minister Hun Sen has warmly welcomed Seoul's capital inflows and even presided over the launch of certain South Korean-led big ticket property projects. The former communist guerilla-cum-market reform champion was recently reelected to a new five-year term and has successfully leveraged the country's recent fast economic growth to his political advantage.
During an inauguration event in May for a new road project, funded by the South Korea International Cooperation Agency (KOICA), Hun Sen pointed to the South Korean-built Gold Tower 42 as a sign of coming Cambodian prosperity. He lauded South Korea for being at the forefront of eight Cambodian business sectors and said that "diplomatic relations with the Republic of Korea are remarkably developed".
He attended in person the inauguration earlier this year of South Korean President Lee Myung-bak and surprised many when he told a local television reporter that Lee was his former "economic adviser".
South Korean investment signals a shift from Cambodia's traditional reliance on multilateral development aid funded by the likes of US Agency for International Development (USAID) and the Japanese International Cooperation Agency (JICA), towards more private investment-led growth. The South Koreans' no-strings-attached approach to business is also believed to be favored by Hun Sen's government, which often found itself at loggerheads over issues of transparency and corruption with multilateral lenders.
At the same time, there are mounting and apparently unhedged market risks to the breakneck growth. The building spree in Phnom Penh notably coincides with a spike in inflation, which rose a dramatic 25% in the first half of 2008, according to the National Bank of Cambodia. That's driven up substantially the prices of imported building materials such as glass and steel.
Some analysts believe fast rising property prices, fueled by rapid South Korean capital inflows, might even be inflating Cambodia's first-ever property market bubble.
The National Bank of Cambodia recently projected gross domestic product would slow to 7.2% in 2008, down substantially from last year's 9.5% clip. The report noted that the construction sector is now the country's biggest urban employer.
Some economic and financial analysts have drawn worrying comparisons to neighboring Vietnam, where land and property prices skyrocketed in line with rapid FDI from Taiwan, Singapore and South Korea in 2007, but fell back around 25% in the first half of 2008 due to softening economic conditions and dried-up finance for buyers. In response, Vietnamese banks have restricted their lending to property buyers and developers.
South Korean property developers in Phnom Penh have so far defied economic gravity, with representatives from IFC and Gold Tower 42 claiming that the impact of inflation on their ventures will be minimal and that construction would continue on schedule. So far most developers have not increased their asking prices, despite the fact existing housing prices and rents have increased five-fold or more since 2005, when the projects were first drawn up. Scaffolding prices alone have jumped to $1,035 per ton this from $400 in 2007, property analysts say.
Other analysts say South Korea's mounting economic troubles at home, including a ballooning short-term debt profile, could soon impact on Cambodian ventures as credit conditions tighten. It's still unclear how much South Korea's own softening economy has served as a push factor in outward investments into Cambodian property.
The South Korean won has depreciated around 10% against the US dollar this year and foreign capital outflows from Seoul are gathering pace. Some analysts estimate South Korea became a net borrower as of July, witnessed in the country's narrowing foreign reserve stock. If the won-dollar depreciation continues, as some analysts predict, it will create new burdens to South Korean companies through higher external lending rates.
Add to that mix fast rising prices for building materials and it seems possible the more ambitious of the South Korean property projects could become financially unviable before they are completed. To fill all the high end space now scheduled to be built - assuming it's actually completed - Cambodians will eventually need to occupy a substantial percentage of many developments, some property analysts say.
Yet with a national GDP per capita of $1,800, it's not clear yet that locals, apart perhaps from government-linked elites, can afford the prices South Korean developers and their financial backers still expect to fetch. There are also potential cultural barriers: middle class and elite Cambodians' have long favored to live in stand-alone, colonial-style villas rather than cement and glass skyscrapers.
While South Korean developers continue to ramp up their building spree, the sky may yet be the limit to their Cambodian designs.
Geoffrey Cain is based in Phnom Penh and a contributor to the Far Eastern Economic Review and Integrated Regional Information Networks (IRIN), a United Nations-run news wire service. He may be reached at geoffrey.cain@gmail.com.
By Geoffrey Cain
Asia Times (Hong Kong)
Some analysts believe fast rising property prices, fueled by rapid South Korean capital inflows, might even be inflating Cambodia's first-ever property market bubble.PHNOM PENH - Planned to tower 52 stories above this city's low-slung skyline, the US$1 billion International Finance Complex (IFC) embodies the bold new ambitions of Cambodian capitalism. If South Korean investors actually complete all the projects they have announced and launched, the once colonial Phnom Penh will soon come to resemble a mini version of high-rise Seoul.
Led by property developers, South Korean investors accounted for over 70% of the $1.5 billion worth of foreign direct investment (FDI) that entered Cambodia in the first half of this year, nearly three times higher than the $520 million it received all of last year. South Korean investments have since 2006 dwarfed Chinese inflows, which have been more critically scrutinized, but only represented 10% of total FDI in the first half of 2008.
Cambodia has long been one of Southeast Asia's laggard economies, plagued by its war-torn past and a backward period of communist-led central planning. With economic opening and market reforms, Cambodia's economy is zipping along nicely, with gross domestic product surging at 9.5% last year. Nowhere is that fast growth more noticeable than in the city's fast-changing skyline.
With all the building activity, some are beginning to wonder if the economics of the building spree compute and how the broader Cambodian economy might be affected if South Korea goes into financial meltdown, as some analysts have predicted. South Korean investors are overseeing and building at least eight major property projects in Phnom Penh, but that number is constantly changing as new concepts arrive at and leave the drawing boards.
There are clear risks to the high-end developments, which are banking heavily on the arrival of high spending foreigners once a purported major oil and gas find on the country's southwestern coast is realized and exploited. The World Bank once estimated the country's total offshore production potential to be at around 2 billion barrels, though Chevron, the US energy company managing the concession, has remained tightlipped about the details and viability of the fuel find.
Consider, for instance, Gold Tower 42, a $240 million condominium project financed by South Korea's DaeHan Real Estate Investment Trust and built by developer Yon Woo. The high rise project is selling units for between $460,000 to $1.5 million and the developer claims 75% of the tower's space has already been sold, mostly to Chinese and South Koreans. Considering 33% of all Cambodians earn less than US 50 cents a day, according to government statistics, the project's pricing is out of reach for nearly all local buyers.
The same is true of the $2 billion Camko City, a satellite city built and owned by South Korean developer World City Company, which entails an international university, condominiums, exercise centers and modern shopping for a community of over 1,000 well-heeled residents. Another South Korean-built mini-neighborhood, Sun Wah International Finance Center, is also on the drawing board and promises similar top-notch amenities.
Camko City, like several other South Korean-led developments, has stirred local controversy and carries big political risks. To make way for the project, the developers completely filled Pong Peay Lake, once a main outlet for the city's dysfunctional drainage system, while evicting long-term residents with compensation at one-tenth of the property's market value, rights groups say. According to Cambodian land laws, lakes are public property and may be developed only in a "rational" manner.
Bypassing donors
South Korea's building spree comes just 11 years after the two countries re-established formal diplomatic ties, which were broken off in 1975 when the communist Khmer Rouge regime took power. Cambodian Prime Minister Hun Sen has warmly welcomed Seoul's capital inflows and even presided over the launch of certain South Korean-led big ticket property projects. The former communist guerilla-cum-market reform champion was recently reelected to a new five-year term and has successfully leveraged the country's recent fast economic growth to his political advantage.
During an inauguration event in May for a new road project, funded by the South Korea International Cooperation Agency (KOICA), Hun Sen pointed to the South Korean-built Gold Tower 42 as a sign of coming Cambodian prosperity. He lauded South Korea for being at the forefront of eight Cambodian business sectors and said that "diplomatic relations with the Republic of Korea are remarkably developed".
He attended in person the inauguration earlier this year of South Korean President Lee Myung-bak and surprised many when he told a local television reporter that Lee was his former "economic adviser".
South Korean investment signals a shift from Cambodia's traditional reliance on multilateral development aid funded by the likes of US Agency for International Development (USAID) and the Japanese International Cooperation Agency (JICA), towards more private investment-led growth. The South Koreans' no-strings-attached approach to business is also believed to be favored by Hun Sen's government, which often found itself at loggerheads over issues of transparency and corruption with multilateral lenders.
At the same time, there are mounting and apparently unhedged market risks to the breakneck growth. The building spree in Phnom Penh notably coincides with a spike in inflation, which rose a dramatic 25% in the first half of 2008, according to the National Bank of Cambodia. That's driven up substantially the prices of imported building materials such as glass and steel.
Some analysts believe fast rising property prices, fueled by rapid South Korean capital inflows, might even be inflating Cambodia's first-ever property market bubble.
The National Bank of Cambodia recently projected gross domestic product would slow to 7.2% in 2008, down substantially from last year's 9.5% clip. The report noted that the construction sector is now the country's biggest urban employer.
Some economic and financial analysts have drawn worrying comparisons to neighboring Vietnam, where land and property prices skyrocketed in line with rapid FDI from Taiwan, Singapore and South Korea in 2007, but fell back around 25% in the first half of 2008 due to softening economic conditions and dried-up finance for buyers. In response, Vietnamese banks have restricted their lending to property buyers and developers.
South Korean property developers in Phnom Penh have so far defied economic gravity, with representatives from IFC and Gold Tower 42 claiming that the impact of inflation on their ventures will be minimal and that construction would continue on schedule. So far most developers have not increased their asking prices, despite the fact existing housing prices and rents have increased five-fold or more since 2005, when the projects were first drawn up. Scaffolding prices alone have jumped to $1,035 per ton this from $400 in 2007, property analysts say.
Other analysts say South Korea's mounting economic troubles at home, including a ballooning short-term debt profile, could soon impact on Cambodian ventures as credit conditions tighten. It's still unclear how much South Korea's own softening economy has served as a push factor in outward investments into Cambodian property.
The South Korean won has depreciated around 10% against the US dollar this year and foreign capital outflows from Seoul are gathering pace. Some analysts estimate South Korea became a net borrower as of July, witnessed in the country's narrowing foreign reserve stock. If the won-dollar depreciation continues, as some analysts predict, it will create new burdens to South Korean companies through higher external lending rates.
Add to that mix fast rising prices for building materials and it seems possible the more ambitious of the South Korean property projects could become financially unviable before they are completed. To fill all the high end space now scheduled to be built - assuming it's actually completed - Cambodians will eventually need to occupy a substantial percentage of many developments, some property analysts say.
Yet with a national GDP per capita of $1,800, it's not clear yet that locals, apart perhaps from government-linked elites, can afford the prices South Korean developers and their financial backers still expect to fetch. There are also potential cultural barriers: middle class and elite Cambodians' have long favored to live in stand-alone, colonial-style villas rather than cement and glass skyscrapers.
While South Korean developers continue to ramp up their building spree, the sky may yet be the limit to their Cambodian designs.
Geoffrey Cain is based in Phnom Penh and a contributor to the Far Eastern Economic Review and Integrated Regional Information Networks (IRIN), a United Nations-run news wire service. He may be reached at geoffrey.cain@gmail.com.
Monday, December 10, 2007
Cambodia opens door to Indian FDI
2007-12-10
Sourced From: Confederation of Indian Industry
Sourced From: Confederation of Indian Industry
The Royal Government of Cambodia will invite Indian foreign direct investment (FDI) to Cambodia for economic take-off and transformation in Cambodia, said Mr. Samdech Akka Moha Sena Padei Techo Hun Sen, Prime Minister of the Kingdom of Cambodia at a business meeting organised jointly by the Confederation of Indian Industry (CII), The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Federation of Indian Chambers of Commerce and Industry (FICCI) , here on Saturday.
On the prospects of investment in Cambodia , the Prime Minister said that The Royal Government of Cambodia is supportive of the private sector and have created a favourable environment for the private sector to protect their investments and business activities in Cambodia. Cambodia important potential in agriculture and agro-industry, labour intensive industries, processing, tourism, mining and some sections of manufacturing and services, he said.
The Royal Government of Cambodia promotes Private Participation in Provision of Infrastructures, provides National Treatment and allows free movement of capital and foreign exchange, said Mr. Hun Sen. The foreign investor can do business with or without Cambodian partners and can decide on the level of equity, said the Prime Minister.
Dr Shakeel Ahmed, Minister of State for Communications and Information Technology, Government of India said that both India and Cambodia have young population who can contribute to the technological development and growth of the two countries. Indian IT companies have significant presence in Cambodia and can further initiate the ICT programs of the Royal Government of Cambodia, he said.
Speaking on India's achievements and plans in IT and Telecom, Dr. Ahmed said that the National E Governance Mission of India is an initiative to provide administrative services at the doorstep of every citizen. India is fast becoming the knowledge capital of the world and can cooperate with Cambodia in information and telecommunication sector, said the Minister.
Mr. P K Sandell, Chairman, Computers and Electronics Committee, ASSOCHAM , said that Cambodia offers tremendous investment opportunity along with growth prospect to Indian investors. India and Cambodia should identify and intensify the areas of trade, he said.
The Indian IT companies offer technology models that are suitable to Asian countries and can be fulfill Cambodia's requirements, said Mr. Sandell. Garments, fisheries, agriculture, food processing, tourism, education and infrastructure are the key areas of cooperation between the two countries, he added.
India – Cambodia relationship is the confluence of culture and religion, said Mr. D Datta, Chairman FICCI, India–Cambodia Joint Business Council, and Chairman and Managing Director, WAPCOS . New products and services should be identified to enhance the bi-lateral trade ties between India and Cambodia, he said. Indian companies should look forward to opportunities in water, power ansd infrastructure projects whereas Cambodian companies should open offices in India to explore new avenues, he added.
Mr. Sanjay Kirloskar, Chairman, CII- CLMV Country Committee and Chairman & Managing Director, Kirloskar Brothers Ltd. identified the areas to improve bi-lateral relations between India and Cambodia and said that barriers in services and commodity trade should be removed along with India's participation in infrastructure projects, including railways and energy projects in Cambodia.
Mr. Kirloskar said that cooperation should be enhanced in biotechnology, bioinformatics, broadcasting, communication, education, human resources and skill development. Other areas of collaboration can be generic pharmaceutical industry, traditional herbal medicines, tourism and manufacturing, he said.
On the prospects of investment in Cambodia , the Prime Minister said that The Royal Government of Cambodia is supportive of the private sector and have created a favourable environment for the private sector to protect their investments and business activities in Cambodia. Cambodia important potential in agriculture and agro-industry, labour intensive industries, processing, tourism, mining and some sections of manufacturing and services, he said.
The Royal Government of Cambodia promotes Private Participation in Provision of Infrastructures, provides National Treatment and allows free movement of capital and foreign exchange, said Mr. Hun Sen. The foreign investor can do business with or without Cambodian partners and can decide on the level of equity, said the Prime Minister.
Dr Shakeel Ahmed, Minister of State for Communications and Information Technology, Government of India said that both India and Cambodia have young population who can contribute to the technological development and growth of the two countries. Indian IT companies have significant presence in Cambodia and can further initiate the ICT programs of the Royal Government of Cambodia, he said.
Speaking on India's achievements and plans in IT and Telecom, Dr. Ahmed said that the National E Governance Mission of India is an initiative to provide administrative services at the doorstep of every citizen. India is fast becoming the knowledge capital of the world and can cooperate with Cambodia in information and telecommunication sector, said the Minister.
Mr. P K Sandell, Chairman, Computers and Electronics Committee, ASSOCHAM , said that Cambodia offers tremendous investment opportunity along with growth prospect to Indian investors. India and Cambodia should identify and intensify the areas of trade, he said.
The Indian IT companies offer technology models that are suitable to Asian countries and can be fulfill Cambodia's requirements, said Mr. Sandell. Garments, fisheries, agriculture, food processing, tourism, education and infrastructure are the key areas of cooperation between the two countries, he added.
India – Cambodia relationship is the confluence of culture and religion, said Mr. D Datta, Chairman FICCI, India–Cambodia Joint Business Council, and Chairman and Managing Director, WAPCOS . New products and services should be identified to enhance the bi-lateral trade ties between India and Cambodia, he said. Indian companies should look forward to opportunities in water, power ansd infrastructure projects whereas Cambodian companies should open offices in India to explore new avenues, he added.
Mr. Sanjay Kirloskar, Chairman, CII- CLMV Country Committee and Chairman & Managing Director, Kirloskar Brothers Ltd. identified the areas to improve bi-lateral relations between India and Cambodia and said that barriers in services and commodity trade should be removed along with India's participation in infrastructure projects, including railways and energy projects in Cambodia.
Mr. Kirloskar said that cooperation should be enhanced in biotechnology, bioinformatics, broadcasting, communication, education, human resources and skill development. Other areas of collaboration can be generic pharmaceutical industry, traditional herbal medicines, tourism and manufacturing, he said.
Monday, October 08, 2007
ANALYSIS: China's investment push abroad picks up pace
DPA
For more than a decade, China - with its 1.3 billion consumers and legions of industrious, low-paid workers - has been Asia's biggest magnet for foreign direct investment (FDI) from around the globe.
Less noticed, until recently, has been China's effort to become a foreign-investor nation in its own right, a development yet in its infant stage by global standards.
"China's outward FDI is still relatively small," said a report published by three North American universities in August, which found that China's total was 5 per cent of US investment in 2005, only 0.6 per cent of the global amount.
But the study also noted that the pace of investment has been picking up, climbing to 16 billion dollars in 2006, or nearly 30 per cent more than the previous year. That is starting to show in the FDI statistics in neighbouring Asian countries.
In Thailand, Chinese firms applied for approval of projects totalling 155 billion baht (4.5 billion dollars) between October 6, 2006 and July 7 of this year.
In Laos, for the fiscal year ending on September 30, Chinese companies accounted for nearly half of the 1.1 billion dollars of FDI projects approved, about 32 per cent of it in hydroelectric power.
Much of China's push abroad has been motivated by the country's need for energy and raw materials to fuel its relentless growth.
That thirst has taken Chinese companies to mineral-rich Perth, Australia, where the state economy is growing at triple the national average due to Chinese trade and investment, giving birth to a new generation of Perth millionaires.
The quest for energy has also taken Chinese state investors to countries with less-savoury governments such as Sudan, Iran and Myanmar.
The recent international furore over the Myanmar junta's latest crackdown on its citizens has highlighted the political dimension of China's investment spree.
China is a significant investor in Myanmar and one of its main trading partners. It is also key to the ruling military regime's financial survival.
Chinese companies are studying plans to invest billions of dollars in a pipeline from Sittwe, in western Myanmar, to Yunnan province in China, to deliver natural gas from the Shwe gas field.
The huge field has the potential to generate about 12 to 15 billion dollars for Myanmar's generals if it can be piped to market. That could be enough to keep them in power for another decade or two.
China is also a major potential investor in hydroelectric power in both Myanmar and Laos.
China's Sinohydro Corporation has set up a joint venture with Thailand's MDX Corp to build a 1-billion-dollar dam at Hat Gyi on the Salween River in northeastern Myanmar.
The 1,200-megawatt project, expected to sell its output to Thailand, threatens the livelihoods of thousands of ethnic Karen in the area, who have been waging a guerrilla struggle against Myanmar's military for six decades.
Chinese companies have also invested in hydroelectric projects in neighbouring Laos, hoping to cash in on Thailand's need for energy.
Unlike the hunt for petroleum, the hydroelectric investments are export-oriented, and perhaps driven by employment considerations.
"China has the biggest dam industry in the world," said Witoon Permpongsacharoen, editor of Watershed Magazine. "They have 80,000 large dams in China and they need to create jobs for this industry."
Given China's dismal record of disregarding the social and environmental impacts of its own dams, that is not necessarily a good omen for the people of Myanmar and Laos, although it will no doubt benefit their leaders.
China's political connections with those countries help them to secure the deals, but it means that more environmentally conscious companies are losing out.
"What this country needs to do is attract some of the multinational companies that are forced to have high environmental and social standards by their shareholders," said forest engineer Peter Fogde, a Swedish director of the Burapha Group in Vientiane, Laos with interests in eucalyptus plantations for wood products.
"Coming from Sweden you have social-environment issues built into you when you are born," said Fogde, who warned that huge tracts of land being given as concessions for rubber plantations to Chinese and Vietnamese investors will cause massive erosion of topsoil.
But not all Chinese investment is as environmentally or politically dangerous. Chinese investors are supplying cheap motorcycles to Laos, Cambodia and Vietnam, giving the dominant Japanese brands a run for their money.
A Chinese company also plans to set up the first cement plant in Laos, giving the domestic construction industry a needed boost and lowering its costs.
And in Thailand, the Chinese projects approved this year include one to produce 5,000 tons of candles annually, and the Chinese-Thai Fusen Angell Motor company's plan to produce 55,000 electric cars.
Less noticed, until recently, has been China's effort to become a foreign-investor nation in its own right, a development yet in its infant stage by global standards.
"China's outward FDI is still relatively small," said a report published by three North American universities in August, which found that China's total was 5 per cent of US investment in 2005, only 0.6 per cent of the global amount.
But the study also noted that the pace of investment has been picking up, climbing to 16 billion dollars in 2006, or nearly 30 per cent more than the previous year. That is starting to show in the FDI statistics in neighbouring Asian countries.
In Thailand, Chinese firms applied for approval of projects totalling 155 billion baht (4.5 billion dollars) between October 6, 2006 and July 7 of this year.
In Laos, for the fiscal year ending on September 30, Chinese companies accounted for nearly half of the 1.1 billion dollars of FDI projects approved, about 32 per cent of it in hydroelectric power.
Much of China's push abroad has been motivated by the country's need for energy and raw materials to fuel its relentless growth.
That thirst has taken Chinese companies to mineral-rich Perth, Australia, where the state economy is growing at triple the national average due to Chinese trade and investment, giving birth to a new generation of Perth millionaires.
The quest for energy has also taken Chinese state investors to countries with less-savoury governments such as Sudan, Iran and Myanmar.
The recent international furore over the Myanmar junta's latest crackdown on its citizens has highlighted the political dimension of China's investment spree.
China is a significant investor in Myanmar and one of its main trading partners. It is also key to the ruling military regime's financial survival.
Chinese companies are studying plans to invest billions of dollars in a pipeline from Sittwe, in western Myanmar, to Yunnan province in China, to deliver natural gas from the Shwe gas field.
The huge field has the potential to generate about 12 to 15 billion dollars for Myanmar's generals if it can be piped to market. That could be enough to keep them in power for another decade or two.
China is also a major potential investor in hydroelectric power in both Myanmar and Laos.
China's Sinohydro Corporation has set up a joint venture with Thailand's MDX Corp to build a 1-billion-dollar dam at Hat Gyi on the Salween River in northeastern Myanmar.
The 1,200-megawatt project, expected to sell its output to Thailand, threatens the livelihoods of thousands of ethnic Karen in the area, who have been waging a guerrilla struggle against Myanmar's military for six decades.
Chinese companies have also invested in hydroelectric projects in neighbouring Laos, hoping to cash in on Thailand's need for energy.
Unlike the hunt for petroleum, the hydroelectric investments are export-oriented, and perhaps driven by employment considerations.
"China has the biggest dam industry in the world," said Witoon Permpongsacharoen, editor of Watershed Magazine. "They have 80,000 large dams in China and they need to create jobs for this industry."
Given China's dismal record of disregarding the social and environmental impacts of its own dams, that is not necessarily a good omen for the people of Myanmar and Laos, although it will no doubt benefit their leaders.
China's political connections with those countries help them to secure the deals, but it means that more environmentally conscious companies are losing out.
"What this country needs to do is attract some of the multinational companies that are forced to have high environmental and social standards by their shareholders," said forest engineer Peter Fogde, a Swedish director of the Burapha Group in Vientiane, Laos with interests in eucalyptus plantations for wood products.
"Coming from Sweden you have social-environment issues built into you when you are born," said Fogde, who warned that huge tracts of land being given as concessions for rubber plantations to Chinese and Vietnamese investors will cause massive erosion of topsoil.
But not all Chinese investment is as environmentally or politically dangerous. Chinese investors are supplying cheap motorcycles to Laos, Cambodia and Vietnam, giving the dominant Japanese brands a run for their money.
A Chinese company also plans to set up the first cement plant in Laos, giving the domestic construction industry a needed boost and lowering its costs.
And in Thailand, the Chinese projects approved this year include one to produce 5,000 tons of candles annually, and the Chinese-Thai Fusen Angell Motor company's plan to produce 55,000 electric cars.
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