Growth of exports to Japan slowed during the first half of 2017, marking the lowest half-year growth rate in nearly a decade, newly released data from Japan’s development agency show.
Cambodian exports to Japan totalled $591 million between January and June, a 4.5 per cent increase compared to the same period last year, according to Japan External Trade Organisation (JETRO). It was the first time since the global financial crisis in 2008 for single-digit half-year growth in outbound trade to Japan.
According to JETRO data, Cambodian exports to Japan grew by 32 percent year-on-year in the first half of 2016, and by 23.4 percent the previous year.
The surge in export growth coincided with a wave of Japanese investment in Cambodia since 2013, which has funnelled capital into local manufacturing operations whose products are destined for Japan and other international markets.
Japanese FDI into Cambodia topped $822 million last year, according to Council for the Development of Cambodia (CDC) data.
Mey Kalyan, senior adviser to the Supreme National Economic Council, said yesterday that the slower growth of exports to Japan could be the result of the weaker investment by Japanese manufacturers.
“So far, Cambodia’s exports to Japan have increased as a result of Japanese manufacturers that operate in Cambodia and which produce goods to export back to Japan,” he said.
Kalyan said Japanese investment into Cambodia was continuing, but there had been a shift away from manufacturing towards investment in retail, restaurants and services.
However, he said the government was working to encourage more Japanese manufacturers to set up production lines in Cambodia, adding that prime minister would address the issue during his ongoing visit to Japan this week.
The premier arrived in Japan yesterday as part of a four-day visit. He is scheduled to meet Japanese Prime Minister Shinzo Abe to sign documents formalising two aid agreements.
One outlines a roughly $35 million grant from Japan to implement the fourth phase of a JICA-sponsored flood-protection project in Phnom Penh. The other is a concessional loan from JICA of approximately $209 million to implement a container terminal project at Cambodia’s principal seaport in Sihanoukville.