Dramatic Rise in Exports to Japan

The Kingdom’s total exports to Japan, one of the world’s largest economies, sharply increased in the first nine months of the year, a result of Cambodia’s effort to diversify export markets and preferential trade treatment from Japan.

According to the latest data from the Japan External Trade Organization (JETRO), Cambodia’s total exports to Japan increased more than 20 percent in the first nine months of the year to $930 million compared with about $730 million over the same period last year.   

Soeng Sophary, spokeswoman for the Ministry of Commerce, told Khmer Times yesterday that the rise was in response to the preferential trade treatment offered by the Japanese government and the expanding relationship between the two countries.

“The Japanese government provided us quota-free entry on many of our main products to meet their demand. That is paving the way for us to export to them,” Ms. Sophary said.

“In addition, our Koh Kong Special Economic Zone, where there is an office for Japan to deal with any issues, is also playing a critical gateway for Japanese firms to set up their factories and business there [in Koh Kong],” she added.

“Japan is a potential market for us in Asia. Although their living standards are higher than ours, we can serve their basic daily needs and provide the daily consumer products [they need].”

Former Japanese Ambassador to Cambodia Yuji Kumamaru, who wrapped up his term last month, told Khmer Times before leaving that the growing Cambodian economy meant the manufacturing and goods and services sectors were also growing, drawing a lot of Japanese investment.

“Wages are competitive here – lower compared to China, Vietnam and Thailand. Japanese companies are looking for alternatives and Cambodia seems to be a good place to invest. Also, the workforce is young and can be easily trained. That is another attraction,” Mr. Kumamaru said.

The main exports to Japan from Cambodia are garment products, footwear, sugar, fish and seafood while the main imports from Japan include machinery, automobiles, electronic products, meat, iron, steel and pharmaceutical products.

Meanwhile, according to JETRO’s data, total imports from Japan decreased slightly in the first half of the year by just 0.03 percent to $209.4 million compared to $209.5 million over the same period last year.  

Ms. Sophary said nowadays local consumers have the luxury of purchasing goods from an increasing number of countries with increased trade liberalization, resulting in expanded choices.

“We are an open economy so we have many choices for imported products – not just Japanese ones.  We also see that market demand doesn’t only focus on Japanese products so buyers have many choices,” she said.

“We can notice that our standard of living has improved but incomes are not high so purchasing power is still low. In addition, the rise in the flow of investment from Japan pushes imports from Japan down because they can produce to sell here.”

KHMER TIMES
MAY KUNMAKARA