The Ministry of Commerce plans to set up five Cambodian private business centres in China to step up the Kingdom’s exports to the East Asian giant and maximise use of the bilateral free trade agreement (FTA) between the two countries, the ministry’s two-day annual meeting heard.
In his closing remarks on January 31, commerce minister Pan Sorasak mentioned that the Cambodia Private Commercial Centre (CPCC) in Atsugi city of Japan’s Kanagawa prefecture – which opened in June – is part of the government’s market integration and diversification strategy, and a precursor to the planned Chinese establishments.
“The ministry is preparing a report on site inspections connected with the establishment of the five Cambodian private business centres – in Changchun, Harbin, Nanjing, Taiyuan and Zhengzhou – that are to further promote and drive sales of Cambodian products on the Chinese market,” he said.
Customs data show that Cambodia’s international goods trade amounted to $52.425 billion last year, increasing by 9.2 per cent versus 2021. Of that, the Kingdom exported $22.483 billion, surging by 16.4 per cent year-on-year, and imported $29.942 billion, rising by 4.3 per cent.
Similarly, bilateral trade between Cambodia and China logged $11.686 billion in 2022, up by 4.4 per cent on a yearly basis, of which the Kingdom’s exports clocked in at $1.241 billion, dropping by 17.9 per cent, and imports were to the tune of $10.446 billion, increasing by 7.9 per cent. This resulted in a trade deficit of $9.205 billion with the East Asian country.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng believes that overseas business centres can be quite beneficial for the Cambodian economy, whether they are managed by the government, private sector or combination thereof.
He explained to The Post that these establishments can be used as venues for meetings or promoting Cambodian products, and can provide valuable information concerning investment opportunities in the Kingdom.
Taking the East Asian nation’s large size and population into account, as well as the presence of the Cambodia-China FTA – which took effect on January 1, 2022 and continues to attract more Chinese investors – these centres will be “truly necessary”, helping Cambodian goods carve out a market there, he argued, noting that the CCC has representative offices in Japan and Canada.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, underscored the value of face-to-face communication, making the case that, even in a world of digital solutions, a brick-and-mortal establishment is “essential” and can be “very profitable” for Cambodian exporters to China.
“China has a large population and a large market, so if the quality of Cambodian goods meets Chinese requirements, exports will jump higher, with the bilateral Cambodia-China FTA easing conditions on goods imports and exports between the two countries,” he said.
According to the National Bank of Cambodia (NBC), between the August 5, 1994 promulgation of the old Law on Investment and December 31, 2021, Cambodia recorded a cumulative total of 168.8 trillion riel, or $41.0 billion, in foreign direct investment (FDI), up 11.2 per cent from the nearly 152 trillion riel recorded by end-2020.
The Greater China region – comprising mainland China, Hong Kong, Macau and Taiwan – accounted for the lion’s share at $18.0 billion or 43.9 per cent, followed by South Korea, Singapore, Vietnam, Japan and Malaysia.
Late in January, the Ministry of Economy and Finance predicted that the Cambodia’s economic growth would accelerate from an estimated 5.2 per cent in 2022 to 5.6 per cent in 2023.
And in a December 7 statement, the World Bank forecast Cambodia’s economic growth at 4.8 per cent in 2022 and 5.2 per cent for 2023, “as increased hiring supports rising domestic consumption and as inflation recedes”.