Cambodia exported $308.391 million worth of goods to Japan in the first quarter of 2023, marking an increase of just 0.9 per cent from the $305.545 million recorded in the same period last year, according to provisional Customs (GDCE) data.
In the January-March period, bilateral trade amounted to $456.643 million – marking a 4.9 per cent year-on-year drop from $480.190 million – accounting for 4.06 per cent of Cambodia’s total international trade volume for the quarter, which was to the tune of $11.252 billion.
Cambodian imports from Japan totalled $148.252 million, down 15.1 per cent from $174.645 million in the year-ago period, as the Kingdom’s trade surplus with the archipelago nation expanded 22.3 per cent on a yearly basis to $160.140 million.
Speaking to The Post on April 26, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng argued that Japan’s technologically-advanced society and the Kingdom’s thriving agricultural economy all but ensure that the two countries are able to exchange goods that are in short supply in the other.
According to him, major Cambodian exports to Japan include garments, footwear, general components and agricultural products, while key imports comprise agricultural and other machinery, vehicles, and electronics.
Bilateral trade is expected to grow on the back of the two countries’ membership in the Regional Comprehensive Economic Partnership (RCEP), he said, adding that a host of Japanese players are currently investing in supermarkets, commercial centres, construction and agriculture across the Kingdom.
“Good relations between the governments and peoples of the two countries will help increase two-way trade, as well as the number of Japanese investors in Cambodia,” he said, adding that the CCC has opened a representative office in Japan with that very goal, and pointing out that many Cambodians live and work in the East Asian country.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, drew attention to the fact that the value of the Kingdom’s exports to Japan is lower than the same for other countries such as the US, China, Thailand and Vietnam.
Although admittedly seeing the untapped potential of agricultural exports to Japan, he highlighted the overall need to improve quality for a meaningful uptick in sales of local merchandise to Asia’s second-largest economy.
To appreciably increase goods exports to Japan and elsewhere, “Cambodia must strive to further diversify its goods and step-up quality to be able to succeed on the international market”, he suggested.
According to the National Bank of Cambodia (NBC), cumulative foreign direct investment (FDI) inflows into Cambodia in the 10,011-day period from the August 5, 1994 promulgation of the old Law on Investment and end-2021 amounted to 168.8 trillion riel, or $41.0 billion, rising by 11.2 per cent from the nearly 152 trillion riel recorded by end-2020.
Japan was the fifth largest investor in the Kingdom with $2.4 billion, or a 5.9 per cent market share, after the Greater China region ($18.0 billion; 43.9 per cent), South Korea ($4.9 billion; 11.9 per cent), Singapore ($2.7 billion; 6.5 per cent) and Vietnam ($2.5 billion; 6.1 per cent). The Greater China region encompasses mainland China, Hong Kong, Macau and Taiwan.
According to the GDCE, the bilateral merchandise trade volume between Cambodia and Japan totalled $1.948 billion in 2022, rising by 12.33 per cent over a year earlier, with Cambodian exports accounting for a 60.22 per cent share, down by 2.85 percentage points on a yearly basis.
Last year, Cambodian goods exports to and imports from Japan amounted to $1.173 billion and $774.989 million, respectively, up 7.26 per cent and 21.0 per cent year-on-year, narrowing the Kingdom’s trade surplus with the archipelago nation by 12.15 per cent to $398.041 million versus $453.116 million in 2021.
Japan was the fourth largest buyer of Cambodian merchandise in 2022, accounting for 5.22 per cent of the global total of $22.483 billion.