The top commerce official on November 9 asked the government-linked Japan External Trade Organization (JETRO) to keep encouraging the Japanese business community to buy Cambodian products and invest in the Kingdom, as well as to support preliminary studies on a prospective bilateral free trade agreement (FTA) between the two Asian countries, according to the commerce ministry.
Minister of Commerce Pan Sorasak made the proposal during a working meeting with JETRO chairman and CEO Nobuhiko Sasaki, looking to promote the business environment and improve Cambodia-Japan trade relations, the ministry noted in a statement.
Citing strong long-standing relations between the two countries, Sorasak also asked JETRO to look into lending support for the ministry-organised One Village One Product (OVOP) Movement, especially in terms of organising exhibitions focused on bringing more Cambodian products into the Japanese market.
The minister suggested a “plus one” approach to attracting new Japanese businesses to the Kingdom that have established a meaningful presence in nearby countries such as Thailand or Vietnam.
Sasaki revealed that JETRO plans to hold a Thailand Plus One workshop in ASEAN’s second largest economy next January to inspire Thai-based Japanese companies to explore the possibility of expanding their businesses to Cambodia, “especially through the Poipet international border gate”, according to the statement.
He also asked for the ministry’s help in bringing in Japanese cosmetics, food products and other merchandise into the Cambodian market.
Sasaki thanked the ministry for its continued assistance for Japanese enterprises operating in the Kingdom, as well as the broader Cambodian community for its support concerning the Regional Comprehensive Economic Partnership (RCEP).
Cumulative foreign direct investment (FDI) inflows into Cambodia between August 5, 1994 and December 31, 2021 amounted to 168.8 trillion riel ($41.0 billion), rising by 11.2 per cent from the nearly 152 trillion riel recorded by end-2020, according to the National Bank of Cambodia (NBC).
Japan was the fifth largest investor in the Kingdom with $2.4 billion, or a 5.9 per cent market share, after China ($18.0 billion; 43.9 per cent), South Korea ($4.9 billion; 11.9 per cent), Singapore ($2.7 billion; 6.5 per cent) and Vietnam ($2.5 billion; 6.1 per cent).
For reference, August 5, 1994 was the day when Royal Decree No 03/NS/94 promulgated the old Law on Investment and established the Council for the Development of Cambodia (CDC), the government’s highest decision-making body for large-scale investments.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng told The Post that Japanese direct investment in the Kingdom is largely concentrated in special economic zones (SEZ), with manufacturing enterprises conspicuously represented by the construction materials, electrical equipment and electronic components segments.
Japan is a major, steadily-growing buyer of local goods, key of which include garments, footwear, general components and agricultural items, he said, sharing that the CCC’s recently-opened representative office in Sendai, Japan is expected to stimulate trade between the two countries.
Notable Japanese imports into Cambodia include agriculture and other categories of machinery, vehicles and electronics, Heng added.
The bilateral commodity trade between Cambodia and Japan stood at $1.653 billion in the first 10 months of 2022, up 14.06 per cent from the same time last year, according to figures posted by the General Department of Customs and Excise (GDCE) on November 10.
In the January-October period, Cambodian commodity exports to Japan amounted to $988.389 million, up 7.38 per cent year-on-year, and imports $664.746 million, up 25.68 per cent. The Kingdom’s trade surplus with the East Asian nation for the 10-month period narrowed by 17.34 per cent on a yearly basis to $323.644 million.
Japan was also the third biggest buyer of Cambodian commodities, after the US and Vietnam at $7.618 billion and $1.664 billion, respectively.
In October alone, the Cambodian-Japan commodity trade came to $153.6 million, up 4.7 per cent year-on-year but down 8.1 per cent month-on-month, while the Kingdom’s exports were to the tune of $90.7 million, down 2.4 per cent year-on-year and down 16.43 per cent month-on-month.