Search

Search form

Logo of Phnom Penh Post newspaper Phnom Penh Post - Cambodia, Japan trade up

Cambodia, Japan trade up

Workers in a Taica production facility in Phnom Penh
Workers in a Taica production facility in Phnom Penh earlier this year. Taica opened its first factory in Cambodia last year. Hong Menea

Cambodia, Japan trade up

Cambodia is quickly becoming a hub for Japanese exports, according to the latest figures from the Japan External Trade Agecy, JETRO.

The state-run agency’s latest trade figures show Cambodia exported more than $584 million worth of locally made products to Japan over the first nine months of the year. The result represents a 35 per cent increase compared to the same period in 2013 – the largest year-on-year increase of all ASEAN nations.

“Economic cooperation between Cambodia and Japan is stronger and stronger and the trend is still promising for the future,” Ken Ratha, spokesman of the Cambodian Commerce Ministry said.

Cambodia’s 100 per cent foreign ownership laws and cheap labour have proven to be lucrative drawcards for Japanese manufacturing firms. Today, in addition to garment factories, auto-parts makers Minebea and Yazaki Corporation and electrical products maker Sumi have all set up manufacturing operations in Cambodia, which then ship back to Japan.

The Kingdom’s main exports to Japan are garments and footwear, electrical machinery and leather goods.

Suzuki Hiroshi, chief economist at Business Research Institute for Cambodia (BRIC), said that foreign direct investment in local projects was the single biggest reason for the big jump in Japanese exports.

“Japanese FDI is one of the most important engines for the Cambodian economy’s growth,” he said.

“Some of the Japanese factories [in Cambodia] are now in full production and exporting their products such as automobile parts, electronic parts and even Japanese Kimono [traditional Japanese dress] to Japan.”

But Cambodia’s popularity with Japanese firms may also be the result of a worsening investment climate in neighbouring Thailand.

The Thai government is reportedly considering amendments to its Foreign Business Act. The changes include clauses stipulating that majority owners in joint-venture operations must be a Thai national, the Bangkok Post reported on Sunday.

Mitsugo Saito, minister and deputy chief of mission at the Japan Embassy in Thailand told the Bangkok Post that many Japanese firms could be forced to leave the neighbouring nation as a result of the new law.

Thailand imports from Japan declined more than 14 per cent during the first nine months of the year, according to the latest JETRO data.

Exports from Thailand to Japan, meanwhile, also declined slightly, by less than one per cent.

“This shows clearly that any government’s attitude to FDI could seriously affect Japanese investment,” Bric’s Hiroshi Suzuki said, referring to the Thai government’s proposed changes to the Foreign Business Act.

“Many Japanese companies are looking for their next investment destination after China, Thailand and Vietnam. Cambodia could be one of the best candidates to receive the needs of Japanese investors.”

RECOMMENDED STORIES

  • Breaking: PM says prominent human rights NGO ‘must close’

    Prime Minister Hun Sen has instructed the Interior Ministry to investigate the Cambodian Center for Human Rights (CCHR) and potentially close it “because they follow foreigners”, appearing to link the rights group to the opposition Cambodia National Rescue Party's purported “revolution”. The CNRP - the

  • Rainsy and Sokha ‘would already be dead’: PM

    Prime Minister Hun Sen on Sunday appeared to suggest he would have assassinated opposition leaders Sam Rainsy and Kem Sokha had he known they were promising to “organise a new government” in the aftermath of the disputed 2013 national elections. In a clip from his speech

  • Massive ceremony at Angkor Wat will show ‘Cambodia not in anarchy’: PM

    Government officials, thousands of monks and Prime Minister Hun Sen himself will hold a massive prayer ceremony at Angkor Wat in early December to highlight the Kingdom’s continuing “peace, independence and political stability”, a spectacle observers said was designed to disguise the deterioration of

  • PM tells workers CNRP is to blame for any sanctions

    In a speech to workers yesterday, Prime Minister Hun Sen pinned the blame for any damage inflicted on Cambodia’s garment industry by potential economic sanctions squarely on the opposition party. “You must remember clearly that if the purchase orders are reduced, it is all