Cambodia’s exports grew 18 per cent in 2016 while imports went up 16 per cent. The European Union is Cambodia’s biggest market. Exports to Japan rose 45 per cent and exports to China by 50 per cent. By contrast, exports to the United States, traditionally a key market for Cambodian garment exporters – remained flat.
The country’s garment and footwear sector accounts for over two-thirds of the country’s exports by value. About 90 per cent of all exports were shipped under GSP and MFN schemes, which allow many Cambodian products to enter markets with reduced tariffs or duty-free. Imports from China – the largest supplier of goods to Cambodia – rose 16 per cent last year. Imports from Thailand and Vietnam increased by 22 per cent and 53 per cent.
Faster export growth helped trim Cambodia’s trade deficit from 11 per cent in 2015 to 10.2 per cent in 2016. But even with preferential trade privileges that have helped swell rice exports to the European market, Cambodian producers must improve quality and slash production costs to remain competitive.
The country still needs to import a lot of machinery and construction materials, which are required for the construction of manufacturing facilities and other business operations.