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Chinese deals help, but Cambodia needs to do more: experts

Employees load sacks of rice onto a conveyor belt at a processing factory in Phnom Penh's Por Sen Chey district last year.
Employees load sacks of rice onto a conveyor belt at a processing factory in Phnom Penh's Por Sen Chey district last year. Heng Chivoan

Chinese deals help, but Cambodia needs to do more: experts

Despite strengthened economic ties following the signing of 31 agreements yesterday between Cambodia and China, the Kingdom’s agricultural sector still needs to improve before it can fully benefit from the opportunities offered by the largest economy in the region, experts have said yesterday.

Cambodia and China added several agreements to their multiple existing export treaties, but the Kingdom still faces a limited capacity for exports, according to Chan Sophal, director of the Center for Policy Studies.

The high production costs faced by the country’s agricultural sector and the expensive logistics of sending goods to Asia’s largest economy reduce the extent to which Cambodia can fully benefit from the trade agreements, he added.

The Kingdom’s agricultural producers are forced to export to Thailand and Vietnam first before products can be forwarded to China on Cambodia’s behalf, he added.

“We got the trade agreement, but our ability to take advantage of them is still limited because compared to other countries, we cannot compete due to our high logistical costs,” he said, suggesting that China could offer higher prices for Cambodian products than it does to Thailand and Vietnam as an assistance mechanism, though he admitted that such an agreement made little economic sense for China and therefore would be difficult to implement.

David Van, local managing director of the Bower Group Asia, said Cambodia needs to adopt China’s strict sanitary and phytosanitary (SPS) protocols in order to secure more trade deals. A lack of adherence to those export requirements has been a longtime barrier for the Kingdom’s trade, he explained.

Trade deals aside, Vann noted that Cambodian producers generally need to upgrade the quality of their production methods in order to meet the standards of the international market.

“They provide us with the market for exports but it does not mean we can immediately make more exports as we need to upgrade the quality of our products first,” he said. “They gave us a car but if we are unable to afford the gasoline by ourselves, we cannot go anywhere.”

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