PHNOM PENH (REUTERS) - Cambodia is considering a proposal by China to use the yuan currency instead of the US dollar for bilateral trade, a spokesman for Cambodia's commerce ministry said on Tuesday (Feb 6), the latest sign of strengthening ties between the two countries.

The vice-governor of China's southern Guangdong province Ouyang Weimin made the request to Cambodian Minister of Commerce Pan Sorasak last week during the latter's visit to China, Seang Thay.

The commerce ministry spokesman said Pan Sorasak agreed that trade should be conducted using the yuan and Cambodia's local riel currency.

"The Chinese side raised that, from their experiences, when they did trade with other countries using US dollars, exchanging back and forth, they lost a lot of money," Seang Thay told Reuters. "So now, they want to use yuan directly," he added.

Pan Sorasak visited Guangdong last week where he urged the province's officials to invest more in Cambodia and also import its agricultural products.

The US dollar is legal tender for conducting transactions in Cambodia, but the country is heavily dependent on Chinese aid and investment.

China is also Cambodia's biggest aid donor and its backing has bolstered Prime Minister Hun Sen in the face of criticism over what his opponents have said amounts to his destruction of democracy ahead of an election this year.

The two countries have pledged to push bilateral trade to US$6 billion (S$8 billion) by 2020. Bilateral trade was US$4.4 billion in 2015, according to latest data.

The high level of Chinese investment is evident from the skyscrapers that have shot up in the capital Phnom Penh, and the hotels and casinos that are being built to serve Chinese buyers in the resort city of Sihanoukville.

Officials at the National Bank of Cambodia could not be reached for comment.