Cambodia and China shared a bilateral trade volume of $2.87343 billion in the first quarter of this year, up by 30.14 per cent from the $2.20788 billion recorded in the same period last year, reflecting overall progress in the resumption of economic activity as Covid-19 pandemic-led pressures ease.
In January-March, Cambodian exports to China were to the tune of $321.778 million, down by 2.5 per cent year-on-year from $333.53 million, and imports amounted to $2.55164 billion, up by 36.1 per cent year-on-year from $1.87435 billion, according to data from the General Department of Customs and Excise of Cambodia (GDCE).
This means that the Kingdom’s trade deficit with China over the period expanded by 44.72 per cent to $2.2299 billion, from $1.5408 billion in January-March 2021.
Two major trade pacts with both countries as members came into force on January 1: the bilateral Cambodia-China Free Trade Agreement (CCFTA) and the Regional Comprehensive Economic Partnership (RCEP). The latter was signed by the 10 ASEAN countries and five other Asia-Pacific nation – Australia, China, Japan, New Zealand and South Korea.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng told The Post on April 18 that trade between the two countries has steadily risen, fuelled by the CCFTA, coupled with improvements in diplomatic relations.
He brushed off concerns over the growing trade deficit, arguing that the “overwhelming majority” of Chinese imports are inputs to be processed or manufactured for export to international markets, and that the Kingdom’s exports to China are “mostly” agricultural products.
He also put forward that China is Cambodia’s largest supplier of raw materials and semi-finished products for processing and production for export, and that Chinese businesses invest in various sectors in the Kingdom. Most raw materials imported from China are processed into finished goods for export to the US, Europe and regional markets, he added.
“China is an important strategic market for Cambodia, which has always provided Cambodia with raw materials to support almost all production needs, including those in textiles, construction and energy,” Heng said.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, said bilateral trade would further gain steam as Chinese investment in the Kingdom picks up on the back of the CCFTA.
But to slash the trade deficit – regardless of sentiments concerning the composition of trade flows – Vanak called on Cambodia to further improve its production capacity and the quality of its goods.
“Cambodia must give greater attention and strive to turn out more products that meet the standards required by the Chinese market,” he said.
According to the GDCE, Cambodia’s foreign trade from January to March totalled $13.16274 billion, up by 9.110 per cent compared to $12.06373 billion in the corresponding period last year.
The data showed that Cambodia’s exports amounted to $5.71682 billion, up 25.658 per cent from $4.54951 billion while imports were valued at $7.44592 billion, down 0.922 per cent from $7.51521 billion.
The Kingdom registered a trade deficit of $1.72909 billion during this period, contracting by 41.697 per cent from the $2.9657 billion logged in January-March 2021.