Although bilateral trade with South Korea dipped 8.4 per cent to $550 million in the first eight months of the year, exports from Cambodia have increased steadily, hitting nearly $190 million, which is 21 per cent higher year-on-year.
The General Department of Customs and Excise (GDCE) showed lower bilateral trade value as a result of reduced imports from South Korea at $314.4 million, down 20.1 per cent from $393.3 million in the corresponding period last year.
Thanks to lower imports, Cambodia experienced a comparatively smaller trade deficit of $125 million, as opposed to $236.7 million between January and August last year.
South Korea is Cambodia’s 12th largest trading partner, led by China, the US, Vietnam, Thailand and Japan.
For the month of August, bilateral trade fell 9.2 per cent to $56.7 million, with Cambodian exports up 16.6 per cent at $24.6 million while imports from South Korea dropped 22.4 per cent to $41.3 million from a year ago.
Hong Vanak, an economist at the Institute of International Relations at the Royal Academy of Cambodia, told The Post on September 11 that global economic uncertainties have caused non-essential orders to fall in almost every destination, including South Korea.
“The decline in the total trade volume between the countries is due to the sharp decline in imports from Korea to Cambodia, while Cambodia’s exports are still in a positive sign,” he observed.
The increase in exports to South Korea is because Cambodia has “a lot of goods that meet the needs of the Korean market, especially textiles and agricultural products”.
In addition, the Cambodia-Korea Bilateral Free Trade Agreement, which came into force at the end of 2022, also boosted Cambodia’s exports.
“Increasing domestic productivity not only helps Cambodia to reduce imports, but it has also helped boost exports. Agricultural exports to Korea would be higher in the future,” Vanak said.
As for the decrease in imports, he opined that “more Korean investors are coming to invest in Cambodia to produce to meet the needs of the Cambodian market” as well as export to their own country and other markets.
During a meeting between Prime Minister Hun Manet and South Korean President Yoon Sok Yeol at the ASEAN Summit in September this year, both parties agreed to further strengthen and expand cooperation in investment, trade, agriculture, public health, defence and networking.
Yoon also promised to consider increasing the quota for Cambodian workers in Korea and encourage Korean companies to invest in Cambodia, while Manet pledged to continue cooperating with Korea to become a comprehensive strategic partner in the future.
In the first quarter of 2023, National Bank of Cambodia data stated that South Korea came in second with $5.5 billion foreign direct investment, growing 10.4 per cent from a year ago.
In 2022, bilateral trade amounted to $778.9 million, expanding by 0.6 per cent compared to 2021. Of that, Cambodia exported $233.6 million, up 20.4 per cent whereas imports from South Korea dipped six per cent to $545.3 million, GDCE shared.