Chea Munyrith④ | Trading Up: How Regional Trade Frameworks Fuel Cambodia-China Economic Synergy
- Chea Munyrith
- 3月29日
- 讀畢需時 4 分鐘
Chea Munyrith, president of the Cambodian Chinese Evolution Researcher Association
Economically, China is Cambodia’s largest trading partner and investor. Bilateral trade between the two countries reached US$11.686 billion in 2022, with Cambodia exporting around US$1.2 billion and importing around US$10.4 billion from China. Despite this significant trade deficit of approximately US$9.2 billion, Cambodia still benefits greatly from trading with China, as most of the imports are goods used as inputs for export. Moreover, Cambodia’s exports to China are primarily composed of agricultural goods. China is Cambodia’s largest market for agricultural products such as rice, tanned fur skins, and bananas. In the first five months of 2023, Cambodia exported milled rice to China valued at around US$77.42 million, constituting 42.43 per cent of Cambodia’s total exports. These increasing exports of agricultural goods have helped Cambodia reduce its poverty rate by as much as 57%, as most of the Cambodian people depend on the agricultural sector as their main source of income. Secondly, most of Cambodia’s imported products from China are raw materials and equipment for garment factories, such as machinery, vehicles, electronics, medicines, and foodstuffs. These imported goods are very significant for Cambodia, as garment factories play a crucial role in boosting Cambodia’s economy. It should be noted that the garment factories have provided thousands of jobs to the Cambodian people. As of 2023, garment and footwear factories have employed more than 800,000 people.
Cambodia is also one of the biggest recipients of China’s Belt and Road Initiative (BRI). Various Chinese companies have invested in Cambodia, many of them involved in mega projects such as the US$2 billion Phnom Penh-Sihanoukville Expressway, the US$160 million Morodok Techo National Stadium, and the US$3.8 billion Dara Sakor Project. China has also invested in other key infrastructures such as the Sihanoukville Special Economic Zone (SSEZ), the Phnom Penh Autonomous Port of Phnom Penh, the Siem Reap International Airport, many bridges, as well as some 3,000 kilometers of road. It is important to note that 70% of roads and bridges in Cambodia are funded by China. These infrastructure projects have certainly helped boost the country’s economic growth through the enhancement of the country’s transportation networks. For instance, the Phnom Penh-Sihanoukville Expressway reduces the travel time from five to two hours from Phnom Penh to Sihanoukville and vice versa, thus greatly benefiting Cambodia’s production and logistics transport.
China has provided assistance to help transform Sihanoukville into a potential hub for industrialization and supply chains. In 2008, a Chinese-Cambodian joint venture was formed to develop the Sihanoukville Special Economic Zone (SSEZ), which is the largest SEZ in Cambodia, covering 1,113 hectares of land. In the first ten months of 2022, the SSEZ has handled around US$2 billion in international trade, an increase of 17% compared to the previous year. Currently, around 175 companies are operating within the SSEZ, most of them are Chinese companies. As the SSEZ is only 12 km away from the Sihanoukville Autonomous port, transportation is greatly facilitated. In fact, Sihanoukville shares similar characteristics to Shenzhen, which is China’s most developed port city. With an increase in foreign direct investment in the SSEZ, it is expected that Sihanoukville will become Cambodia’s hub for investment.
Cambodia started to export its first shipment of fresh mangoes to China, from its annual quota of 500,000 tons. China also offered quotas for Cambodia to export 400,000 tons of rice. Other phytosanitary protocol requirements are in the process to enable the export of peppercorns and aquatic products like Basa fish. To that effect, Cambodia has made full use of the mechanism of the Cambodia-China Economic and Trade Cooperation Committee to expand the export of quality Cambodian products into the Chinese market through international fairs like the China International Import Expo, the China Import and Export Fair, and the ASEAN-China Expo. The China-Cambodia partnership embodies a win-win development model, shifting away from traditional donor-recipient dynamics. It promotes sustainable infrastructure, economic diversification, and self-reliance for developing nations. Their cooperation strengthens ASEAN-China relations and fosters a more balanced global economic order.
It is also evident that Cambodia and China can benefit from each other’s economic strengths and opportunities. Cambodia has a young and dynamic workforce, abundant natural resources, and a strategic location in Southeast Asia. China, on the other hand, has a large and growing market, advanced technology, and a strong manufacturing base, as well as a major market for Cambodian exports. Cambodia’s strategic location in Southeast Asia makes it an ideal hub for Chinese companies looking to expand their business in the region. This economic complementarity was further strengthened by the Cambodia-China Free Trade Agreement (CCFTA), the ASEAN-China FTA (ACFTA) and the Regional Comprehensive Economic Partnership (RCEP), all of which have provided Cambodian entrepreneurs with ample market access and business opportunities in the Chinese markets. China has become Cambodia’s largest trading partner and top investor, with billions in foreign direct investment (FDI) in infrastructure, energy, and agriculture. The China-Cambodia Free Trade Agreement (CCFTA) (effective since 2022) has boosted trade volume, reaching over $11 billion in 2023.
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