Cambodia-Malaysia trade volume surpassed $500 million in 2021, rising by 13.14 per cent over a year earlier, according to the Ministry of Commerce.
Last year, the Kingdom’s exports to Malaysia exceeded $101 million, increasing by 2.62 per cent from more than $98 million in 2020, and imports topped $399 million, surging by 16.16 per cent year-on-year from over $343 million a year earlier.
For comparison, the UN Comtrade Database shows that in 2020, Cambodian exports to Malaysia were $113.91 million, and imports were $346.11 million. Cereals accounted for $32.77 million (28.8 per cent) of the Kingdom’s exports that year, while knitted or crocheted fabric made up $92.48 million (26.72 per cent) of imports.
Malaysia has invested more than $3.15 billion in the Kingdom as of end-2021, the Council for the Development of Cambodia (CDC) reported.
At the Cambodia-Malaysia Business Forum 2022 on February 17, CDC secretary-general Sok Chenda Sophea said it was imperative that the Kingdom improve its environment for investment in the “new normal” of Covid-19.
This, he said, would require Cambodia to adopt a more proactive approach to inspire and lure in quality and sustainable investment.
He added that the new Law on Investment, promulgated on October 15, “is designed to respond to geopolitical and economic shifts, Industry 4.0, the digital transformation and the disruption of the global value chain caused by the Covid-19 epidemic”.
“It aims to maximise benefits from the rapidly evolving regional economic structure,” Chenda Sophea said.
He voiced optimism that the forum would provide Malaysian players with a clearer and deeper understanding of the law and convince them to invest more in the Kingdom.
Cambodia Chamber of Commerce vice-president Lim Heng told The Post that the two ASEAN countries have strong trade relations, and that the number of Malaysian investors in the Kingdom has increased significantly.
Heng said Malaysia’s overall partnership with Cambodia is healthy and aligns with the principles of the ASEAN Economic Community.
This, he stressed, would have major bearing on the effectiveness of spreading knowledge of the investment legal regime among Malaysian businesspeople in spurring investment in the Kingdom and improving bilateral trade.
“Malaysian investment in Cambodia will continue to increase, especially as we implement free trade agreements [FTA] with China and South Korea,” he said, pointing out that a sizeable share of Malaysian newcomers would seek to produce goods for export to China.
These FTAs, coupled with trade privileges for Cambodia under the EU’s Everything But Arms (EBA) scheme and the generalised systems of preferences (GSP) provided by a bevy of countries, and an attractive investment legal framework will win over more Malaysian investors to manufacturing, he added.
Malaysian ambassador Eldeen Husaini Mohd Hashim said the Law on Investment clearly sets out its incentives for local and foreign investors, and focuses on recent global business trends, including green, information and communications technology (ICT), and high-tech industries.
“All the provisions of this law provide for facilitation, through tax exemptions, incentives and investment protection packages, aimed at making registration procedures easier, smoother and more efficient for investment companies.
“This investment law will be fruitful in the near future … through this law, Cambodia can seize the maximum opportunity to promote investment, to continue to gain considerable steam,” he said.
Malaysian Business Council in Cambodia president Tan Khee Meng said the investment law will provide a strong legal and regulatory basis for attracting foreign direct investment (FDI) and boosting economic growth.
“Cambodia’s economic growth has continued to grow steadily during the last two decades, under the wise leadership of [Prime Minister Hun Sen].”