Cambodia exported $1.998 billion worth of electrical machinery and equipment and related products in 2022, rocketing by 84.83 per cent from the $1.081 billion recorded in 2021, according to data from the General Department of Customs and Excise of Cambodia (GDCE).
Analysts have put the increase down to an uptick in investment in the industry; strong momentum in the local economic diversification push; a shift in purchase orders to Cambodia and away from markets stymied by supply-chain issues and trade barriers; and supportive arrangements with key trading partners of the Kingdom.
The aforementioned category of items, corresponding to Chapter 85 of the harmonised tariff schedule, accounted for 8.89 per cent of the value of the Kingdom’s total exports over the year, or $22.483 billion, up 3.29 percentage points on-year, GDCE statistics indicate.
In December alone, Chapter 85 exports were $298.465 million, up 128.69 per cent from $130.511 million in the same month of 2021. For comparison, the October and November figures were $196.405 million and $146.031 million, respectively, up 113.96 per cent and 38.3 per cent, from $91.794 million and $105.602 million in the corresponding months of 2021.
Although figures were not broken down by importing market, online platform Trading Economics statistics indicate that the US accounted for the lion’s share of the $1.08 billion worth of Cambodian Chapter 85 exports cited for 2021, at $548.03 million or 51 per cent, followed by Thailand ($156.46 million) and Japan ($128.45 million).
Speaking to The Post on January 23, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng stressed how remarkable the near-doubling in this category of exports had been, commenting that 2022 had brought declines in overseas sales of a variety of items.
Notable export declines in 2022 included for “furskins and artificial fur; manufactures thereof” ($162.729 million; down 65.73%), “copper and articles thereof” ($68.588 million; down 17.52%), “wood and articles of wood; wood charcoal” ($283.355 million; down
14.48%) and “other made up textile articles; sets; worn clothing and worn textile articles; rags” ($168.944 million; down 12.52%), GDCE figures show.
Heng credited the surge in Chapter 85 exports to investors who steered sourcing orders to Cambodia after being hurt elsewhere by supply chain disruptions and knock-on effects from trade disputes tied to the Ukraine conflict and geopolitical conflicts among major powers.
He also cited greater market opportunities created by free trade agreements (FTA), such as the bilateral deal with China and the Regional Comprehensive Economic Partnership (RCEP), as well as the EU’s ‘Everything But Arms’ (EBA) scheme and the US’ Generalised System of Preferences (GSP).
“The overseas sales of these electrical and electronic machines, devices and implements will keep bringing in more revenues as more people [around the world] use them, and as investment in local production climbs,” he said.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia (RAC), remarked that exports have come a long way from a mix comprised “almost entirely” of textile-related goods, becoming considerably more diverse, with value-added items accounting for a growing portion.
And as Cambodia produces and exports more goods with value, the stronger the Kingdom’s economic pillars will become, and the easier it will be to achieve the government’s prosperity objectives, he suggested.
Vanak stressed that the Kingdom’s favourable geographical location, relatively high degrees of political stability, investment law updates, and FTAs will generally bolster exports across the board.
In particular, Chapter 85 exports will “definitely” remained buoyed by the heightened number of producers in Cambodia, as well as access to a variety of overseas markets provided by the Kingdom, he stated.
For reference, the full title of Chapter 85 is “electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles”.
Of note, US President Joe Biden on June 6 issued a declaration of emergency to impose a 24-month moratorium on new duties on solar cell and module imports from Cambodia, Malaysia, Thailand and Vietnam. The move aims to ensure that the US has access to sufficient supply of these items to meet surging electricity demand.
