Cambodia trade with China hits $3 billion

Exports to China increased by 42 per cent to $424 million, while imports increased by a more modest 16.7 per cent to $2.58 billion – resulting in a trade deficit of $2.156 billion.

The Cambodia-China FTA (CCFTA), ratified last year, is anticipated to boost bilateral trade to $10 billion by 2023.

“The opportunity available in the Chinese market will help to promote larger trade volumes and strengthen stronger ties between the two countries under the recently-signed [CCFTA],” Penn Sovicheat, Ministry of Commerce under-secretary of state, told Chinese state media company Xinhua.

Cambodia recently consummated a trade deal allowing for the export of fresh mangoes to the mainland and is now working to develop similar arrangements for bird’s nests, coconuts, longan and dragon fruit.

Sovicheat said Cambodia stands ready as a sustainable source of agricultural products for the Chinese market.

According to the World Bank, the agriculture industry currently accounts for 20 per cent of Cambodia’s gross domestic product.

As rising incomes coincide with higher consumption on the mainland, China has become increasingly dependent on foreign food imports.

According to the World Bank, about 65 per cent of Cambodians rely on the agriculture, fisheries, and forestry sectors for their livelihoods.

The agriculture sector also grosses the most foreign direct investments from China, according to the Germany-based Heinrich Boll Stiftung (HBS) think tank.

“In the early 2000s, China adopted its ’Going Out’ strategy, encouraging Chinese enterprises to expand globally. Since 2004, overseas investment by Chinese enterprises has increased exponentially and has eclipsed China’s foreign aid budget,” HBS said in its Southeast Asia report.

Last month, the Ministry of Commerce indicated that it is preparing to establish five new trade liaison offices in China, bringing the total number to 11.

China is the world’s third-largest importer of fresh fruit with imports valued at $8.6 billion in 2019, according to the US Foreign Agricultural Service (USFAS).

Durian, cherries and bananas account for nearly half of all fresh fruit imports, with Thailand, Chile and Vietnam being their primary suppliers.

Growing incomes in China have led to the country becoming increasingly dependent on agriculture, dairy and meat imports.

“Rising income and living standards, increasing urbanisation, and food safety concerns have fuelled China’s agricultural imports, especially since the country’s accession to the World Trade Organization in 2001. As incomes rose, the average Chinese diet changed to include more meat, dairy, and processed foods, with grain consumption declining,” the USFAS said.