Following a hiatus due to the Covid-19 pandemic, Cambodia and Japan are expected to hold their 14th policy consultation meeting in November, according to the Council for the Development of Cambodia (CDC).
As part of the preparation for the meeting, a joint discussion took place on Aug 31 between Chheang Yanara, second vice president of CDC, Taninal Ichitomo, deputy Chief of Mission of the Embassy of Japan in Cambodia and Miyahara Ai, deputy director of the Japan International Cooperation Agency in Cambodia.
Both nations have enjoyed strong diplomatic and trade relationships over the past decades.
Bilateral trade volume between Cambodia and Japan was recorded at $1.1 billion in the first seven months of 2023, which was down about 10 per cent compared to the same period in 2022, the General Department of Customs and Excise (GDCE).
Of this, exports from Cambodia dipped two per cent to $655.2 million, while imports from Japan sank 21.3 per cent to $369.4 million.
The trade balance with Japan expanded to $285.8 million in favour of Cambodia in the period from $198.3 million last year.
The GDCE noted that Japan is Cambodia’s fifth largest trading partner after China, the US, Vietnam and Thailand.
Hong Vanak, an economics researcher at the Royal Academy of Cambodia, told The Post on Sept 3 that the simultaneous decline in both countries’ exports was due to the uncertainties in the global economy, which has forced everyone to cut back on unnecessary spending except food.
Cambodia’s exports to Japan consist mostly of agricultural products, hence the reason why Cambodia’s exports to Japan only decreased a little compared to imports from Japan.
But he warned that the situation of dropping exports could worsen if the global political and economic unease prolongs.
“The decline in international trade volume is happening in almost every destination,” he said.
However, when the global geopolitical and economic issues are resolved, trade between Cambodia and Japan would “certainly recover fast” because both countries not only have a good relationship but are also members of the Regional Comprehensive Economic Partnership Agreement (RCEP), Vanak opined.
Additionally, Japanese investors feature strongly in the Cambodian business landscape, where they hold the fourth largest investment spot with a total capital of 11.3 trillion riel or $2.7 billion (up 11.6 per cent year-on-year) after China, Korea and Singapore, as of March 31, 2023, the National Bank of Cambodia (NBC) stated.
A majority of the investments are in the financial, construction, hotel and real estate sectors.
In 2022, bilateral trade between Cambodia and Japan totalled $1.9 billion, an increase of 12.3 per cent compared to 2021.
Exports from Cambodia grew 7.2 per cent to over $1.2 billion, while imports rose 21 per cent to around $775 million, said the GDCE.