Q1 electric gear, linked exports soar 102% on-year

Q1 electric gear, linked exports soar 102% on-year

The aforementioned category of items, corresponding to Chapter 85 of the Harmonised System (HS), accounted for 13.66 per cent of the value of the Kingdom’s total exports over the January-March period, or $5.392 billion.

The January-March overseas sales of Chapter 85 merchandise were also up 2.6 per cent from the $718.21 million registered in the fourth quarter of 2022 and up 41.77 per cent from the third quarter’s $519.71 million.

In March alone, Chapter 85 exports were $279.672 million, up 107.51 per cent from $134.775 million in the same month of 2022. For comparison, the January and February figures were $232.824 million and $224.280 million, respectively, up 114.6 per cent and 83.82 per cent, from $108.495 million and $122.009 million in the corresponding months of 2022.

Speaking to The Post on April 23, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng put down the increases in these exports down to a number of internal and external factors.

Internally, Cambodia boasts an abundance of affordable and skilled labour, attractive investment laws,relatively extensive and adequate transport infrastructure networks, and other favourable conditions for investment, Heng said.

On the external front, the Kingdom has fairly large overseas markets, enjoys preferential tariff treatment from many countries, and faces little in the way of problems when it comes to raw material supply, he added.

Additionally, Heng said, international sales of Chapter 85 items have received a major boost from the relocation of factories and manufacturing enterprises to Cambodia and away from certain countries, which he ascribed to trade rows and geopolitical disputes among major powers.

He commented that the uptick in Chapter 85 exports has largely offset the ongoing decline in the same for textile-related items – which dropped 22.4 per cent on-year to $2.449 billion in the first quarter, according to the GDCE.

“The rise in the investment in and export of [these products], confirms that the pillars of the Cambodian economy stand even stronger, as factories that churn out the aforementioned items are not classified as light industry,” Heng contended.

He also claimed that first-quarter Chapter 85 exports were buoyed by sales of Cambodian-made solar panels to the US.

In June last year, amid disruptions to energy markets fuelled by the Russia-Ukraine conflict, US President Joe Biden issued a declaration of emergency to impose a 24-month moratorium on new duties on solar cell and module imports from Cambodia, Malaysia, Thailand and Vietnam.

However, a breakdown of Cambodia’s first-quarter Chapter 85 exports by country was not immediately available. Still, statistics from the GDCE and Trading Economics suggest that the US accounted for $548.03 million or 50.69 per cent of the Kingdom’s total Chapter 85 exports in 2021, compared to $281.26 million and 36.91 per cent in 2020.

Hong Vanak, director of International Economics at the Royal Academy of Cambodia, opined that growth in the exports of these items, which are by and large medium and heavy industry products, signals a fortification of the Kingdom’s economic buffers.

The manufacture of Chapter 85 items require tonnes of capital, advanced technologies and skilled labour, he said, adding that investments in the field generally mean more revenues for the Kingdom, and a reduction in the import of similar products.

“Political stability and strong economic growth have led more and more large companies to open factories and manufacturing enterprises in Cambodia, as production bases for export to international markets,” Vanak said.

GDCE statistics show that Cambodia in 2022 exported Chapter 85 items to the tune of $1.998 billion, recording an 84.83 per cent jump from the $1.081 billion logged a year earlier and accounting for 8.89 per cent of the $22.483 billion in total exports for last year.

Last year’s monthly average came to $166.516 million – or $154.521 million with December’s peak of $298.465 million excluded. October saw the second largest monthly figure for 2022, at just 65.8 per cent of that, or $196.405 million.

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”.

phnompenh post