Electric gear, linked exports record shocking 64% jump
Electric gear, linked exports record shocking 64% jump
Cambodia exported $1.090 billion worth of electrical machinery and equipment and related products in the first eight months of 2022, up 64.18 per cent from the $663.585 million recorded over the same time in 2021, according to Customs.
Analysts ascribed this uptick to brisk momentum in Cambodia’s economic diversification push, coupled with a blossoming production industry and expanding export channels powered by an all-round investment boom as well as supportive arrangements with key trading partners of the Kingdom.
The aforementioned category of items, corresponding to Chapter 85 of the harmonised tariff schedule, accounted for 6.97 per cent of the value of the Kingdom’s total exports over the period, or $15.642 billion, statistics from the General Department of Customs and Excise of Cambodia (GDCE) statistics indicate.
In August alone, Chapter 85 exports were $162.461 million, up 91.95 per cent from $84.636 million in the same month of 2021. For comparison, the June and July figures were $120.681 million and $166.759 million, respectively, up 49.65 per cent and 66.74 per cent, from $80.643 million and $100.012 million in the corresponding months of 2021.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng suggested that these exports were buoyed by preferential tariffs granted by the US, China and European nations along with a host of other large, developed countries, in tandem with the Kingdom’s bilateral and multilateral free trade agreements (FTA).
These advantages have attracted large streams of investment money into export-oriented production and processing in the Kingdom, he told The Post on October 5.
“With Cambodia’s potential in both domestic and overseas markets, I expect exports of these goods to bring in even more money,” he predicted, adding that the US’ move in June to waive tariffs on solar cells and modules – products covered in Chapter 85 – would largely fuel exports of solar energy goods and other items that fall into this classification.
Heng was referring to the declaration of emergency issued by US President Joe Biden on June 6 to impose a 24-month moratorium on new duties on solar cell and module imports from Cambodia, Malaysia, Thailand and Vietnam. The move aims to ensure that the US has access to sufficient supply of these items to meet surging electricity demand.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, said increasing international demand for machinery, electrical equipment and advanced technologies is prompting a growing list of manufacturers to set up shop in the Kingdom.
This, he explained, is because Cambodia is endowed with an abundant labour supply, a favourable investment legal framework, ample market availabilities, and preferential tariff treatment granted by some major trading partners.
Cambodia is emerging as a production hub for machinery as well as electric and electronic equipment, in addition to textile-related items and agricultural goods destined for international markets, Vanak claimed.
He added that a double dose of Covid-19-related fallout and instability across Europe have given rise to modest but significant improvements to production and exports in the Kingdom.
He also pointed out that greater volumes of a wider array of Cambodian merchandise are being sold abroad, creating economic windfall for the Kingdom.
“This embodies Cambodia’s pursuit of export diversification.”
Of note, the January-August Chapter 85 exports were 0.78 per cent higher than the full-year total of $1.081 billion for 2021, which had jumped 41.87 per cent from $762.047 million in 2020, following a 32.66 per cent climb from $574.437 million in 2019, according to the GDCE.
For reference, the full title of Chapter 85 is “electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles”.
