RCEP, CCFTA brings boons to China trade
RCEP, CCFTA brings boons to China trade
Bilateral trade between Cambodia and China increased by more than 30 per cent year-on-year from January to April, reflecting the positive effects of the Cambodia-China Free Trade Agreement (CCFTA) and the Regional Comprehensive Economic Partnership (RCEP) on commerce, both of which entered into force in January.
According to a report from the Ministry of Commerce, two-way trade between the two countries reached nearly $4 billion in the four month period, representing a 31 per cent year-on-year increase. Cambodia’s exports totalled nearly $424 million – with a slight 0.1 per cent fall – while total imports reached $3.5 billion, an increase of 35 per cent.
Penn Sovicheat, spokesperson for the commerce ministry, acknowledged that the recent implementation of the CCFTA has been positively impacting trade and investment between the two nations.
The Cambodia-China bilateral relationship “has resulted in the more open Chinese market through this Free Trade Agreement and other trade preferences we have received from China, all of which have been pushing increases in bilateral trade,” Sovicheat said.
“They also attract more investments from third countries in Cambodia for export to China.”
The spokesperson said that, under the RCEP, China has also become a key development partner of Cambodia, along with South Korea and Japan, “so Cambodia gets very favourable trading conditions within industries such as agriculture and garment [for] export to China … who exports to us raw materials, construction material and other electronic products.
“This means that businesspeople from both sides understand the other country’s needs and the market, and can complement each other.”
Kaing Monika, deputy secretary-general of Garment Manufacturers Association in Cambodia (GMAC), told The Post that China is currently a market with high potential. Citing figures from GlobalData, he said China would soon become the largest apparel market in the world, surpassing the US by 2023.
China became ASEAN’s largest trading partner in 2020. Monika noted that, while trade volume between the country and the bloc reached $878 billion in 2021, Cambodia is still “far from becoming China’s largest trading partner in textiles and apparel”, and vice versa, he said, adding that China only imported $2.5 billion of garments from ASEAN countries in 2020.
“In the near future, there is huge possibility for Cambodia’s manufacturers to supply to both western and Chinese brands that sell in China, while garment production in China may decrease due to higher wages and worker shortages [within] this low-value-added industry,” he said.
According to the commerce ministry, within the terms of the CCFTA, 98 per cent of Cambodia’s exports to China and 90 per cent of China’s exports to Cambodia are tariff-free. China is the third largest export market for Cambodia, accounting for eight per cent of the Kingdom’s total export in 2021.
