Cambodia earned $979.060 million from the export of “electrical, electronic equipment” in the first four months of 2023, up 94.24 per cent year-on-year from $504.039 million and up 36.72 per cent half-on-half (compared to July-October 2022) from $716.11 million, according to provisional Customs (GDCE) data in “International Merchandise Trade Statistics” bulletins.
This category of items, corresponding to Chapter 85 of the Harmonised System (HS) of Tariff Nomenclature, accounted for 13.534 per cent of the $7.234 billion value of the Kingdom’s total merchandise exports over the four months – compared to 6.627 per cent and $7.606 billion in January-April 2022, as well as 9.719 per cent and $7.368 billion in July-October 2022.
‘Chance to absorb’
In a May 29 interview with The Post, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng enthused that Chapter 85 exports are rising every year, propelled by preferential tariffs from numerous countries, as well as major markets “waiting to buy” the merchandise, including the US, EU, Japan and South Korea.
Additionally, free trade agreements (FTA) designed to draw more investment to the Kingdom are supporting a rise in the manufacturing capacity of these items, he said, citing the pacts with China (CCFTA) and South Korea (CKFTA), as well as the Regional Comprehensive Economic Partnership (RCEP) as prime examples.
“Given its investment laws, geographical location and distinctive labour force characteristics, Cambodia has a chance to absorb many of the export-oriented investment projects looking to move their production chains amid trade disputes between major powers.
“The more of the aforementioned items Cambodia can manufacture, the more it’ll be able to attract direct investment from automakers and large industry players,” he said, stressing that steady global economic progress should underpin growth in these exports.
Last month alone, the Kingdom exported $242.284 million worth of “electrical, electronic equipment”, up 74.61 per cent from $138.760 million in April 2022 (year-on-year), up 23.36 per cent from $196.405 million in October 2022 (half-on-half) and up 4.06 per cent from $232.824 million in January 2023 (quarter-on-quarter), but down 13.37 per cent from $279.672 million in March 2023 (month-on-month), according to the GDCE.
This monthly figure was down 18.82 per cent from the record $298.465 million registered in December 2022, as indicated by GDCE statistics for the 2015-2023 period. The next highest values on record for the aforementioned timeframe are $279.672 million (March 2023), $242.284 million (April 2023), $232.824 million (January 2023), and $224.280 million (February 2023).
By contrast, it was 53.5 times larger than the $4.529 million posted for February 2015, the lowest number on record for 2015-2023. The next lowest values for the specified period are $4.715 million (March 2015), $5.727 million (May 2015), $5.737 million (April 2015), and $5.982 million (January 2015).
Chapter 85 items accounted for 13.15 per cent of the $1.842 billion value of the Kingdom’s total exports in April 2023 – compared to 7.344 per cent and $1.889 billion in April 2022, 13.188 per cent and $1.489 billion in October 2022, 14.850 per cent and $1.568 billion in January 2023, and 13.275 per cent and $2.107 billion in March 2023.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, stated that preferential tariffs from major countries have driven a steady acceleration in the number of companies investing in increasingly diverse ventures in the Kingdom.
This diversification is a boon for Cambodia, serving as a buffer against a severe drop in purchase orders for a particular category of commodities, which is crucial for export planning, he explained.
“I expect that as a result of this growth, there’ll be more manufacturers producing finished goods in the future,” Vanak said.
According to the GDCE, Cambodia in 2022 exported “electrical, electronic equipment” to the tune of $1.998 billion – up 84.83 per cent over 2021 and up 546.86 per cent against 2015 – making up 8.888 per cent of the $22.483 billion registered in total outbound merchandise trade.
Although the GDCE bulletins did not provide figures by importing market, statistics from online platform Trading Economics indicate that the US encompassed the bulk of the $1.08 billion worth of Cambodian Chapter 85 exports reported for 2021, at $548.03 million or 51 per cent, followed by Thailand ($156.46 million) and Japan ($128.45 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”.