Bilateral trade between Cambodia and Japan in the first eight months of 2022 rose by more than one-sixth on-year, in a trend expected to carry into the foreseeable future, largely driven by agricultural exports from the Kingdom. Still, the business community is calling for greater efforts to identify and develop new products that could command high demand on the Japanese market.
Between January and August, trade between the two countries totalled $1.332 billion, rising by 16.86 per cent year-on-year, with Cambodian exports to Japan accounting for $789.167 million, up 10.65 per cent, and imports $543.095 million, up 27.22 per cent, according to the General Department of Customs and Excise (GDCE).
The Kingdom’s trade surplus with Japan for the period narrowed by 14.0 per cent to $246.072 million.
In August alone, bilateral trade came to $194.74 million, up 21.0 per cent year-on-year, with Cambodian exports to Japan representing $121.24 million, up 5.0 per cent, and imports $73.49 million, up 61.5 per cent. The Kingdom’s trade surplus with Japan for last month shrunk by 31.8 per cent on a yearly basis to $47.75 million.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng told The Post that Japanese imports mostly comprise finished goods, including vehicles, electronics and machinery – especially for agricultural use – while the bulk of the Kingdom’s exports consist of textile-related items, agricultural products, and electrical equipment and components.
Cambodia-Japan trade will remain on a high growth trajectory for the time being, propelled by “good cooperation” between government leaders and investors of the two countries, he predicted, affirming that investment from Japanese companies into the Kingdom is currently on an upswing.
However, Cambodia must make more effort to find products that are in high demand on the Japanese market and ensure that they meet international standards, he suggested, indicating that agricultural goods will most likely remain one of the Kingdom’s primary exports to Japan going forward.
And just as there is ample demand for certain Japanese goods on the Cambodian market, the converse is also true, he claimed.
On September 7, the Council for the Development of Cambodia (CDC), the government’s highest decision-making body for large-scale investments, hosted the 24th Meeting of the Cambodia-Japan Joint Committee, presided over by its secretary-general Sok Chenda Sophea.
The meeting was also attended by Japanese ambassador to Cambodia Masahiro Mikami as well as representatives of the Japan International Cooperation Agency (JICA), Japan External Trade Organization (JETRO), Japanese Business Association of Cambodia (JBAC), and several Japanese companies.
In summary, Chenda Sophea lauded the long-standing good political, diplomatic and trade relations between the two countries, while Mikami commended the Cambodian government for the new Law on Investment – promulgated on October 15, 2021 – which he said would help the Kingdom woo in more foreign investors.
According to the CDC, last month it greenlit one new Japanese investment project, bringing the total number of such ventures approved to 149 – with registered capital of $2.9 billion – since the council’s establishment on August 5, 1994.
However, this figure in all likelihood only accounts for Japanese investment project proposals planned outside of the Kingdom’s special economic zones (SEZ), as an earlier CDC report said it had approved 145 such non-SEZ ventures as of July 31, 2021, worth $2.8 billion, in addition to 66 developments valued at $340 million that were planned for SEZs, for a total of 211 Japanese investment projects.
Last year, bilateral trade between Cambodia and Japan amounted to $1.734 billion, up 1.21 per cent over 2020, with the Kingdom’s exports accounting for $1.094 billion, up 2.95 per cent, and imports $640.513 million, down 1.63 per cent, according to the GDCE. The Kingdom’s trade surplus with Japan expanded 10.215 per cent to $453.116 million.