Trade with China on the upswing

May Kunmakara / Khmer Times No Comments Share:
A man walks past the lobby of the Export-Import Bank of China (EXIM) headquarters in Beijing. Reuters

Cambodia’s exports to China, the second largest economy in the world, rose sharply during the first 11 months of 2017, by as much as 18 percent compared with the same period in 2016, according to the latest data from the Ministry of Commerce.

Total exports to the Chinese market reached $634 million from January to November 2017, an 18 percent increase.

Meanwhile, Cambodian imports from the East Asian giant experienced a more moderate growth, going from $4.33 billion in 2016 to $4.48 billion last year, a five percent hike.

Cambodian shipments to the Chinese markets consisted mostly of agricultural products, primarily rice, cassava, cashew nuts, semi-processed palm oil and rubber.

Imports from China were mainly cars, motorcycles, construction material, fabric for garment factories, cigarettes and fertilizers.

Song Saran, the president of Amru Rice (Cambodia), one of the largest rice millers and exporters in the country, told Khmer Times yesterday that China is an essential market for Cambodian products.

“Despite being a relatively new market for us, there is great potential in the agriculture sector,” he said, adding that as one of the largest importers of agricultural products, China is a key market for milled rice, cassava, corn and rubber.

“However, when it comes to industrial products, I don’t think there is so much room for us, as they already produce them at home.”

Mr Saran said that in the past Cambodia could not sell directly to China, instead having to sell its products to Thailand or Vietnam, where they would eventually be sold again to China.

“But now China has opened up its market to Cambodia and we can sell directly there,” he said. “This is an excellent starting point.”

In November last year, Cambodia signed two memorandums of understanding (MoU) with Export-Import Bank of China and CITIC Group Cooperation to help the kingdom increase paddy production and boost rice exports.

The agreements aim to increase rice exports to China beyond the 300,000 tonnes now allowed by the quota in place.

The new partnership will result in the development of 15 warehouse and silos across 11 provinces. The envisioned warehouse and silo network will have the potential to process up to 19,500 tonnes of rice per day and store nearly one million tonnes.

Mr Saran said the current quota system with China is curtailing the kingdom’s potential in trade.

“If we can negotiate with the Chinese government and eliminate quotas, we will be able to export to China as much or even more than our neighbours,” he said.

“We hope the Chinese government will eliminate quotas for Cambodia as the European Union and the US have done. It will boost our economy.”

Previous Article

Local bank and MFI sector continue their meteoric rise

Next Article

GMS to enhance cooperation