Cambodia's total exports to Japan rose by 18.6 per cent over the first five months of the year compare to the same period last year, according to data from the Japanese External Trade Organization (JETRO)’s office in Phnom Penh. Officials said the close relationship in both economic and trade ties contributed to the growth.
The data showed that total exports were worth US$136.2 million during the first five months of the year, compared to $114.8 million the previous year.
At the same time, the data showed that Japan’s total exports to Cambodia declined 17.5 per cent to $71 million, from $86 million.
“Now, they [the Japanese] are very interested with our government’s policies in economic, diplomatic, trade areas. This makes both trade and investment between our two countries go up,” said Kong Putheara, a spokesman for the Ministry of Commerce.
“Japanese investors or businessmen are very careful with any investment in countries: if they don’t trust, they will not invest or do business,” he said.
He highlighted the recent opening of some Japanese banks or representative offices, which draw more big companies from the country. Two of the three mega banks in Japan, SMBC and the Bank of Tokyo Mitsubishi UFJ, opened representative offices in the capital earlier this year.
“We see before their investments are coming, their banks come first as we see some of their banks are opening branch and representative offices here which is more convenient for investors for receiving more information and for money transfers,” he said.
Hiroshi Suzuki, CEO and chief economist of the Business Research Institute for Cambodia (BRIC), said that the main factor for the sharp increase is the increasing importance of Japanese factories in Cambodia, saying that many Japanese factories in the Phnom Penh Special Economic Zone (PPSEZ) were under construction and they imported many kinds of machinery and facilities.
Sumi, the automobile manufacturer in PPSEZ, started production in April. Sumi imports almost of its parts from Japan and exports all its products back to Japan, he added.
However, he said, there is still the room for improvement in the areas of inland freight cost and speedy customs clearance. “Both governments are very keen to solve any problems through bilateral meetings based on the investment treaty between Japan and Cambodia,’ he said.
“Within this year, many Japanese factories in PPSEZ and other SEZs will be starting production and export. This will provide a good change to Cambodian export.”
According to the data, Cambodia’s main products exported to Japan include footwear, woven apparel, knitted apparel, fish and seafood, rubber and tobacco, while Japan’s main products were machinery, vehicles and pharmaceutical products.
Kong Putheara said Japan had offered Cambodia hundreds of products with duty-free status for import to Japan.
To contact the reporter on this story: May Kunmakara at [email protected]