While trade with China, Cambodia’s largest bilateral trade partner, saw a sizeable increase in the first six months of this year, commercial ties with the country’s second largest trade partner, South Korea, remained stable, according to data received yesterday from the Ministry of Commerce.
Analysts said that China’s rising economic ties with Cambodia were a result of its rapidly growing economy–estimated to grow by 9.6 percent this year by the Asian Development Bank.
Commerce Ministry data show that bilateral trade between China and Cambodia increased by 25.9 percent between January and June to $501.06 million. Bilateral trade between South Korea and China, meanwhile, experienced a more meager rise of 3.35 percent over the same period of time, to $109.85 million.
Exports from Cambodia to China rose from $4.6 million in the first six months of 2009 to $17.68 million during the same period this year.
Likewise, Cambodian exports to South Korea saw an equally substantial rise from $4.35 million between January and June last year to $10.25 million during the same period this year.
Neou Seiha, a senior researcher at the Economic Institute of Cambodia, said that higher demand for cheaper goods was the main factor behind rising commercial ties with China.
“If someone is offering cheap imports, then they will be first choice,” he said, adding that South Korean products tend to be higher up the value chain and, therefore, more expensive.
“China was unaffected by the world economic crisis,” said CPP lawmaker Cheam Yeap, chairman of the Nationally Assembly commission on banking and finance, offering a reason for the rise in bilateral trade between China and Cambodia. “This country has helped some countries in the Asia Pacific region to avoid being wrapped up in the financial crisis.”
On July 1, the Assembly ratified free trade agreements with China and South Korea that were originally signed by the ten member countries of Asean in 2009.
Similar free trade agreements made by other countries in the region and Asean nations have already resulted in a rise in Cambodian exports.
Kong Putheara, director of the trade department in the Ministry of Commerce, said Cambodia’s main export items to China included natural rubber and wood-based materials, while China’s main export items to Cambodia were telecommunications equipment, textiles and construction materials.
The majority of export items to South Korea from Cambodia consist of recycled cans, natural rubber and garments, while South Korea mainly exports textiles and automobiles to Cambodia, he added.