Cambodia exported $713.276 million worth of goods to mainland China in the first half (H1) of 2023, up 16.64 per cent from $611.542 million in 2022H1 and up 13.38 per cent from $629.09 million in 2022H2, in growth fuelled by five consecutive months of year-on-year increases from February to June, according to Customs (GDCE).
Mainland China remained Cambodia’s biggest goods trading partner for the six-month period, representing 25.97 per cent, 6.22 per cent and a colossal 44.48 per cent of the Kingdom’s totals for international trade ($23.694B), exports ($11.464B) and imports ($12.229B), respectively, provisional GDCE data compiled in “International Merchandise Trade Statistics” bulletins show.
The amount of merchandise exchanged between the two jurisdictions in 2023H1 was to the tune of $6.153 billion, up 2.80 per cent year-on-year from $5.986 billion and up nearly 7.95 per cent half-on-half from $5.700 billion.
The Kingdom’s imports from the Chinese mainland accounted for 88.41 per cent of that, reaching $5.440 billion, up 1.22 per cent year-on-year from $5.374 billion and up 7.27 per cent half-on-half from $5.071 billion.
Cambodia recorded a trade deficit – the amount by which a country’s imports exceed its exports – of $4.727 billion with mainland China for 2023H1, narrowing by 0.75 per cent year-on-year from $4.763 billion but expanding by 6.41 per cent half-on-half from $4.442 billion, according to the GDCE.
Speaking to The Post on July 11, Cambodia Chamber of Commerce vice-president Lim Heng hypothesised that the five consecutive months of year-on-year increases in Cambodia’s exports to mainland China signal both a preference among Chinese consumers for Cambodian goods as well as growth in the Kingdom’s overall manufacturing and production capacity.
The bilateral Cambodia-China Free Trade Agreement (CCFTA), which took effect on January 1, 2022, has been a key driver of Cambodian merchandise shipments to the Chinese mainland, he said, explaining that most local goods exported to that market are agricultural products that benefit from tariff preferences.
“I am confident that Cambodia’s exports to China will continue to rise thanks to the Royal Government’s policy of promoting agriculture. In the future, we hope that the Chinese authorities would let Cambodia ship additional agricultural goods there,” he said.
He put the ongoing trade deficit down to strong demand for raw materials and inputs from Cambodia’s export-oriented processing industries.
According to Heng, other notable imports from mainland China include construction materials, office supplies, electrical and electronic equipment, vehicles and food items.
According to the GDCE, in June alone, Cambodian goods exports to mainland China totalled $124.476 million, up 35.71 per cent year-on-year from $91.720 million, but down 5.11 per cent half-on-half from $131.177 million, down 4.68 per cent quarter-on-quarter from $130.583 million, and down 16.60 per cent month-on-month from $149.257 million.
June marked the fifth consecutive month of year-on-year growth, following increases of 11.00 per cent, 16.42 per cent, 8.79 per cent and 55.32 per cent in February-May, respectively. Unfortunately,the year kicked off with a 22.21 per cent year-on-year drop in January.
Imports from mainland China closed June at $952.564 million, up 5.39 per cent year-on-year from $903.843 million, but down 2.38 per cent half-on-half from $975.790 million, down 7.21 per cent quarter-on-quarter from $1.027 billion, and down 7.79 per cent month-on-month from $1.033 billion.
Mainland China was Cambodia’s second largest export destination – after the US ($1.038B) – and top import source in June, representing 24.47 per cent, 5.46 per cent and a massive 44.93 per cent of the Kingdom’s international trade ($4.401B), exports ($2.281B) and imports ($2.120B), respectively, GDCE numbers show.
The top five monthly ratios of mainland China’s share of total imports in 2015-2023 – the period covered by the bulletins – have all been observed this year: 47.34 per cent in May, 46.38 per cent in January, 44.93 per cent in June, 44.68 per cent in March and 44.55 per cent in April. The next highest ratios were 44.46 per cent and 43.20 per cent in December and November 2022, respectively. In February 2023, this percentage fell to 37.53 per cent.
In a mid-May interview with The Post, Royal Academy of Cambodia economist Hong Vanak claimed that solid ties between the two jurisdictions’ public and private sectors prevented the bilateral trade volume from declining more on an annual basis than the 0.93 per cent it did during the January-April period.
He pointed out that almost every nation had recorded drops in imports and exports for almost a year, and speculated that the 3.73 per cent year-on-year gain in Cambodian exports for the aforementioned four-month period could be attributable to an increase in shipments of agricultural products.
“For a shot at creating a more prominent presence in the Chinese market and in other countries, Cambodia must work to ramp up its production capacity as well as to diversify,” Vanak opined.
GDCE figures indicate that mainland China was again Cambodia’s largest merchandise trading partner in 2022, registering a bilateral trade volume of $11.686 billion, up 4.39 per cent from nearly $11.195 billion in 2021 and up almost 168.95 per cent from $4.345 billion in 2015.
Cambodia’s exports to and imports from mainland China were to the tune of $1.241 billion and $10.446 billion, respectively, down more than 17.85 per cent and up 7.86 per cent against 2021, expanding the former’s trade deficit with the latter by 12.61 per cent on an annual basis to nearly $9.205 billion.
A total 34.886 per cent of the Kingdom’s $29.942 billion in imports last year came from mainland China. For comparison, the numbers for prior years were: 2021 (33.740%; $28.703B), 2020 (37.145%; $19.100B), 2019 (37.471%; $20.172B), 2018 (35.461%; $17.265B), 2017 (37.194%; $14.220B), 2016 (37.111%; $12.245B) and 2015 (37.054%; $10.588B).
Mainland China was Cambodia’s top import source and number-three export destination in 2022, behind only the US ($8.969B) and Vietnam ($2.169B).