Bilateral trade between Cambodia and Vietnam reached record highs this year with trade volume amounting to $3.06 billion during the first 10 months of 2018, an increase of 36 per cent on the same period last year, according to Vietnamese government data.
Trade figures from the General Department of Vietnam Customs for the January-October period revealed that among the total $3.06 billion in bilateral trade, Vietnam’s exports to Cambodia accounted for $2.25 billion, or 73 per cent of the total two-way trade.
Cambodia has consistently run a trade deficit with Vietnam in recent years, with this occurring because most Cambodian imports from Vietnam are finished products, while Cambodian exports are generally raw agricultural products, according to vice-president of the Cambodia Chamber of Commerce (CCC) Lim Heng.
Heng said that Cambodia’s construction sector is booming, but as developers are unable to source locally produced materials they are dependent on Vietnamese imports for high value items like steel. He added that only brick and cement are supplied by local producers.
Issues like this have made the trade deficit with Vietnam larger as Cambodian construction increases.
“We see growing demand locally but our supply capacity is still limited. That is why we still depend on imports and have a trade deficit with neighbouring countries,” he said, adding that Cambodia should try to narrow the trade imbalance by increasing its production of vegetables and other goods.
“Cambodia has always had a trade deficit with Vietnam and Thailand, but it is offset by enjoying a trade surplus with major export destinations like the EU, Canada and the US,” he said.
According to the General Department of Vietnam Customs, Vietnam’s key exports to the Kingdom include steel – valued at $713 million annually – petrol ($403 million), garments and textiles ($398 million) and leather and footwear ($195 million).
Meanwhile, Cambodia’s exports to Vietnam are mostly raw agricultural products such as cashew nuts – valued at $280 million annually – rubber ($90 million) and wood and woodwork products ($88 million).
According to the statement from the Cambodian Ministry of Foreign Affairs and International Cooperation, five agreements were signed as a result of Prime Minister Hun Sen’s trip to Vietnam last week, with the two countries determined to boost border trade activities to $5 billion by 2020.
“The agreements are set to improve connectivity, facilitate cross-border transport and access, promote trade, business and investment, tourism exchange and expand power supply collaboration,” the statement read.