Cambodia exported $142.743 million worth of merchandise to South Korea in the first half (H1) of 2023, surging by nearly 28.2 per cent from $111.357 million in 2022H1 as well as by 16.73 per cent from over $122.28 million in 2022H2, according to Customs (GDCE). A record $28.964 million was shipped in June alone, making up 20.29 per cent of the total.

The volume of goods exchanged between the two countries in 2023H1 amounted to $376.458 million, down more than 10.65 per cent from $421.334 million in 2022H1 but up 5.28 per cent from $357.59 million in 2022H2, provisional GDCE data compiled in “International Merchandise Trade Statistics” bulletins show.

Cambodia’s imports from Asia’s fourth-largest economy accounted for 62.08 per cent of that, standing at $233.714 million, down 24.60 per cent from $309.977 million in 2022H1 and down 0.68 per cent from nearly $235.31 million in 2022H2.

The Kingdom had a trade deficit – the amount by which a country’s imports exceed its exports – of $90.971 million with South Korea for 2023H1, narrowing by 54.20 per cent from $198.621 million in 2022H1 and over 19.5 per cent from nearly $113.03 million in 2022H2.

These were the best semi-annual results for Cambodian goods exports to and trade balance with South Korea in the 2015-2023 period – the timeframe covered by the GDCE bulletins – with 2022H2 recording the second best performance in both categories.

The Group of 20 (G20) member was Cambodia’s 12th biggest goods trading partner in 2023H1, representing 1.59 per cent, 1.25 per cent and 1.91 per cent of its totals for international trade ($23.694B), exports ($11.464B) and imports ($12.229B) for the six-month period, according to the GDCE.

‘Keep rising’

Cambodia Chamber of Commerce vice-president Lim Heng commented to The Post on July 17 that the Kingdom’s exports to South Korea receive a sizeable boost from the bilateral Cambodia-Korea Free Trade Agreement (CKFTA) – which took effect on December 1.

Most of the goods that Cambodia exports to South Korea are garments, footwear, travel goods and agricultural products, he claimed.

“I anticipate that imports and exports between the two countries will keep rising as a result of the free trade agreement, especially Cambodian agricultural crop exports,” Heng said.

He also highlighted finance, construction and agriculture as prominent Cambodian sectors in which South Korean investors are active, and pointed out that the republic employs a decent share of Cambodian workers.

According to the GDCE, in June alone, Cambodian goods exports to South Korea hit $28.964 million, up 55.4 per cent year-on-year from $18.639 million, up 9.2 per cent half-on-half from $26.521 million, up 18.1 per cent quarter-on-quarter from $24.530 million, and up nearly 25 per cent month-on-month from $23.180 million.

June has been the best export month so far in the 2015-2023 period, with the next highest figures logged in January 2023 ($27.304M), December 2022 ($26.521M), March 2023 ($24.530M) and July 2022 ($24.130M).

Imports from the G20 powerhouse closed June at $43.895 million, up 7.41 per cent year-on-year from $40.866 million, up more than 6.1 per cent half-on-half from $41.361 million, up nearly 32.8 per cent quarter-on-quarter from $33.062 million, and up 6.40 per cent month-on-month from $41.254 million. This was the best import month since May 2022 ($47.071M).

South Korea was Cambodia’s 15th largest export destination and number-nine import source in June, representing 1.66 per cent, 1.27 per cent and 2.07 per cent of its international trade ($4.401B), exports ($2.281B) and imports ($2.120B), respectively, GDCE numbers show.

Royal Academy of Cambodia economist Hong Vanak is likewise confident that the Kingdom’s exports to South Korea will remain on an upward growth trajectory, citing the CKFTA as well as Korean customers’ appreciation of Cambodian products for their high quality and affordable prices.

“Although trade between the two countries remains modest, it’ll undoubtedly grow substantially going forward,” he predicted.

In a similar vein, he asserted that it is increasingly clear how well Cambodian agricultural goods can sell on the Korean market.

Vanak also opined that the ongoing spate of legal reforms and infrastructural improvements will encourage more Korean players to invest in Cambodia.

For reference, the National Bank of Cambodia (NBC) reported that foreign direct investment (FDI) inflows into the Kingdom between August 5, 1994, when the old Law on Investment was promulgated, and March 31, 2023 totalled 185.7 trillion riel ($45.8 billion), up nine per cent from a year earlier.

The second-largest investor in Cambodia was South Korea, which contributed more than 12 per cent of the total, or 22.4 trillion riel, up 10.4 per cent from the same period last year. The Greater China region, which includes mainland China, Hong Kong, Macau, and Taiwan, took the top spot with 83.5 trillion riel, marking an 11.1 per cent year-on-year jump.

Decreasing share

GDCE statistics indicated that the Cambodia-South Korea merchandise trade in 2022 was valued at $778.924 million, up 0.63 per cent over 2021, but still down 11.66 per cent from the record $881.761 million booked in 2019.

Cambodian goods exports to and imports from the world’s 10th-largest economy clocked in at $233.638 million and $545.286 million, respectively up 20.38 per cent and down 5.98 per cent from 2021 values, reducing the Kingdom’s trade deficit with the East Asian country by more than 19.2 per cent to $311.648 million.

South Korea was Cambodia’s 14th largest merchandise trading partner in 2022, accounting for 1.486 per cent of the $52.425 billion in its total international trade that year, compared to the top three: mainland China ($11.686B; 22.291%), the US ($9.281B; 17.704%) and Vietnam ($6.136B; 11.704%).

The equivalent figures for previous years are as thus: 2021 (1.612%; $48.012B), 2020 (1.962%; $37.442B), 2019 (2.525%; $34.921B), 2018 (2.553%; $29.894B), 2017 (2.578%; $25.442B), 2016 (2.691%; $22.174B) and 2015 (3.159%; $19.095B).

These numbers demonstrate a definite downward trend in South Korea’s contribution to Cambodia’s international trade over the years. In 2015, the East Asian country was the Kingdom’s 10th biggest goods trading partner.