The apex Cambodian business association’s leaders are convinced that their new representative office in the Sendai region will materially accelerate the Kingdom’s trade and economic relations with Japan, largely by tapping into the opportunities created by the Regional Comprehensive Economic Partnership (RCEP).
Leaders of the government and Cambodia Chamber of Commerce (CCC) set out for the northeastern Japanese region to attend a February 24 ceremony marking the inauguration of the office as well as the election of key members, CCC vice-president Lim Heng, who was present at the event, told The Post four days later.
Heng asserted that the office will connect Japan’s businesspeople with Cambodian partners and opportunities, increase Japanese investment inflows, encourage more effective overall RCEP implementation, and otherwise expand economic ties between the two countries.
He surmised that the closer Cambodia-Japan ties would make negotiations for a potential bilateral free trade agreement (FTA) all the easier when the time comes.
“The CCC is always ready to support the representative office in Japan’s Sendai region when it comes to networking with the Cambodian private sector. Cambodia has great investment potential, and there are many pursuits which parties from either side could undertake, to reap maximum benefits for both private sectors,” he said.
During the trip, Heng and the CCC delegation took the occasion to visit three Japanese companies to gain insight into their current situations and relative positions, along with those of their associated markets, as well as to look into how best to promote cooperation among firms of either country.
“Many Japanese companies are interested in entering cooperative partnerships or directly setting up shop in Cambodia. This is wonderful, and our office members are determined to open doors for additional and stronger cooperation,” he affirmed.
Heng identified the three aforementioned companies as: Yaoko Co Ltd in organic vegetable processing, and food retail and distribution; Nagase & Co Ltd in chemicals trading; and Kokubo & Co Ltd in houseware manufacturing and supply. Yaoko and Nagase are listed on the Tokyo Stock Exchange (TYO).
The CCC in late May opened a representative office in Toronto, Canada – its first-ever international outpost – and tentatively plans to open another in Montreal. Meanwhile, the Sendai office was established by Decision No 121 SSR signed by Prime Minister Hun Sen on December 14, 2021.
Cumulative foreign direct investment (FDI) inflows into Cambodia between the August 5, 1994 promulgation of the old Law on Investment and December 31, 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, according to the National Bank of Cambodia (NBC).
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.
Japanese investors in the Kingdom largely operate in industry, banking, hotels and tourism, construction and real estate, and especially supermarkets and retail, restaurants and services.
According to Customs (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.