Trade with Japan increased significantly during the first half of the year, with exports soaring 19 percent and imports growing by 9.5 percent, according to the latest figures from the Japan External Trade Organisation.
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During the first six months of the year, $706 million worth of shipments were sent to Japan, while Cambodia bought about $191 million in Japanese goods.
In June alone, exports to Japan rose by more than 20 percent compared to the same month last year, while imports grew by 30 percent. During that month, exports were valued at $81 million, while imports were $39 million.
Most Cambodian exports were garments, footwear products and, to a lesser degree, electronic components such as mobile phone batteries. Japan mostly exported machinery, cars and electronics to the Kingdom, as well as beef, steel and pharmaceuticals, according to the Cambodian Ministry of Commerce.
“Trade between Cambodia and Japan continues to grow every year,” Ho Sivyong, director of the Export and Import Department, told Khmer Times.
“Currently, the Ministry of Commerce is really pushing our products to the Japanese as the Japanese people are showing a great interest in goods made in Cambodia.
“The goal is also to attract Japanese investors to come to the Kingdom and set up processing and packaging plants, which would help us diversify beyond garments and footwear,” Mr Sivyong said.
Mey Kalyan, a senior advisor to the Supreme National Economic Council, said the growth in exports was impressive, particularly taking into consideration that the country has just had an election that had many investors worried.
He said it is particularly important to nurture the Kingdom’s trade relation with Japan, as it is key to diversifying Cambodia’s export markets, which continue to be dominated by the European Union and the US.
“Now, more and more Japanese investors are coming to invest in the Kingdom, particularly in Banteay Meanchey’s Poipet Special Economic Zone,” Mr Kalyan said.
He explained that most of those Japanese investors were previously based in Thailand, but decided to set up their plants in the Kingdom because it has lower labour costs and is politically stable.
He said Cambodia is also attracting Japanese investment due to its investor-friendly policies, which includes plenty of tax breaks for large investments. Moreover, Mr Kalyan said Japanese investors “know that the Cambodian economy will continue growing strongly in years to come.”
According to the National Bank of Cambodia, the biggest buyers of Cambodian products are the US (21 percent), followed by England and Germany, which jointly account for 17.8 percent of total exports. Japan accounted for 7.5 percent.
Last year, Cambodia bought the most from China, Thailand, and Vietnam, which represented 41.7, 16.5, and 11.7 percent of the country’s total imports, respectively. Imports from Japan, meanwhile, represented 4.2 percent of all imports.