The value of goods traded between Cambodia and Japan reached $573.101 million in the first four months of 2023, a 9.8 per cent reduction from the $635.613 million registered for the same time last year, according to provisional Customs (GDCE) data. Japan was the Kingdom’s fifth biggest trading partner for the period, after mainland China, the US, Vietnam and Thailand.
Cambodian goods exports to and imports from Japan amounted to $371.595 million and $201.506 million, respectively, down 4.55 per cent and down 18.19 per cent year-on-year, from $389.295 million and $246.318 million.
The Kingdom’s trade surplus – the amount by which a country’s exports exceed its imports – with Japan for the January-April period clocked in at $170.088 million, growing by 18.96 per cent on a yearly basis.
Japan accounted for 3.78 per cent of Cambodia’s total international merchandise trade volume in the first four months of 2023, which the GDCE put at $15.161 billion. This is up from 3.60 per cent in the year-ago period, when the total volume was $17.650 billion.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, pinned the drop in bilateral trade on general global economic uncertainty and accompanying slowdown in growth. He also pointed out that practically all countries have recorded decreases in international trade as of late.
Consequently, consumers are cutting down on costs deemed to be unnecessary, while retailers are reporting excess inventory, he told The Post on May 15.
“Despite the two countries’ membership in the Regional Comprehensive Economic Partnership [RCEP], the volume of bilateral imports and exports is just not as high as it had been,” Vanak said, referring to the world’s largest trade pact, which was signed by Cambodia, Japan and 13 additional Asia-Pacific nations – including all nine other ASEAN member states.
He argued that unfavourable political and economic environments tend to motivate countries to step up production and processing of its natural resource endowments to compensate for any possible drops in imports.
Last month alone, bilateral trade totalled $116.46 million, down 25.07 per cent from $155.42 million in April 2022 and down 26.56 per cent from $158.58 million in March 2023, according to provisional GDCE figures.
Cambodian exports and imports were valued at $63.203 million and $53.255 million, respectively, down 24.53 per cent and down 25.70 per cent year-on-year, as well as down 38.48 per cent and down 4.63 per cent month-on-month.
The monthly trade surplus came in at $9.95 million, narrowing by 17.6 per cent year-on-year and 78.79 per cent month-on-month.
Japan constituted 2.98 per cent of the total $3.909 billion in international trade that the Kingdom racked up in April. This is up from 3.46 per cent in April 2022, when the total value totted up to $4.487 billion. The corresponding figures for March 2023 were 3.60 per cent and $4.404 billion, GDCE statistics indicate.
Cambodia Chamber of Commerce vice-president Lim Heng commented that Japan remains one of the Kingdom’s top export destinations, and that many Cambodian products have a significant market presence there.
Japan’s position as a developed tech- and industry-driven country presents a unique opportunity for Cambodia to export agricultural goods there, he noted.
On the flip side, Japan’s high living standards translate into more stringent quality and packaging requirements for consumer goods, Heng cautioned.
“The decline in trade volume between the two countries during this period is consistent with a broader trend observed in every country,” he said, pointing out that Japanese investors have a firm foothold in Cambodia.
According to him, major Cambodian exports to Japan include garments, footwear, general components and agricultural products, while key imports comprise agricultural and other machinery, vehicles, and electronics.
Provisional GDCE figures show that the amount of goods exchanged between Cambodia and Japan in 2022 totalled $1.948 billion, an increase of 12.33 per cent over the previous year. Cambodian exports made up 60.22 per cent of this volume, a decrease of 2.85 percentage points from 2021.
Cambodian exports to and imports from Japan stood at $1.173 billion and $774.989 million, respectively, up 7.26 per cent and up 21.0 per cent on 2021. As a result, the trade surplus between the Kingdom and the archipelago country shrunk by 12.15 per cent to $398.041 million in 2022 versus $453.116 million a year earlier.
Japan was the fourth largest buyer of Cambodian exports in 2022, purchasing 5.22 per cent of the total $22.483 billion.
Textiles, vehicles and other goodies
No breakdown was immediately available of the particular items traded between Cambodia and Japan at any point during the 2022-2023 period.
However, Trading Economics statistics show that, out of Cambodia’s $1.09 billion worth of goods exports to Japan in 2021, “articles of apparel, knit or crocheted” accounted for the lion’s share at $372.18 million (versus $339.95M in 2020), followed by “articles of apparel, not knit or crocheted” ($365.51M; vs $382.52M), “electrical, electronic equipment” ($128.45M; vs $123.40M), and “footwear, gaiters and the like” ($90.02M; vs $83.14M).
The next eight items were: “articles of leather, animal gut, harness, travel goods” ($54.68M; vs $48.80M in 2020), “umbrellas, walking-sticks, seat-sticks, whips” ($23.17M; vs $28.09M), “other made textile articles, sets, worn clothing” ($13.70M; vs $16.26M), “machinery, nuclear reactors, boilers” ($9.19M; vs $5.37M), “paper and paperboard, articles of pulp, paper and board” ($5.95M; vs $5.28M), “toys, games, sports requisites” ($5.73M; vs $6.18M), “furniture, lighting signs, prefabricated buildings” ($5.56M; vs $4.61M), and “headgear” ($4.78M; vs $4.81M).
For reference, the 12 categories respectively correspond to chapters 61, 62, 85, 64, 42, 66, 63, 84, 48, 95, 94 and 65 of the Harmonised System (HS) of Tariff Nomenclature.
Similarly, out of Cambodia’s $640.51 million worth of goods imports from Japan in 2021, “vehicles other than railway, tramway” accounted for the most at $354.50 million (versus $361.10M in 2020), followed by “machinery, nuclear reactors, boilers” ($76.09M; vs $83.29M), “electrical, electronic equipment” ($33.20M; vs $43.25M), and “plastics” ($22.28M; vs $25.04M).
The next eight items were: “optical, photo, technical, medical apparatus” ($15.58M; vs $9.26M), “ceramic products” ($15.38M; vs $18.58M), “manmade staple fibres” ($12.36M; vs $11.62M), “raw hides and skins (other than furskins) and leather” ($11.27M; vs $7.16M), “articles of iron or steel” ($8.72M; vs $6.54M), “other made textile articles, sets, worn clothing” ($8.38M; vs $8.47M), “iron and steel” ($7.17M; vs $4.33M), and “pharmaceutical products” ($6.09M; vs $2.40M).
These 12 categories respectively correspond to chapters 87, 84, 85, 39, 90, 69, 55, 41, 73, 63, 72 and 30 of the HS.
Trading Economics notes that its figures are sourced from the UN Commodity Trade Statistics Database (UN COMTRADE).