Cambodia-China’s Trade Connectivity: Reevaluating the Trade Pattern and Constraints
- 592 Downloads
The Belt and Road Initiative (BRI), also known as One Belt, One Road (OBOR), is China’s highly ambitious development project aimed at revitalizing the Chinese ancient Silk Road and realizing the Chinese dream. It was launched in 2013 by Chinese President Xi Jinping. BRI is perceived to have impacts on many aspects of interconnectivity, one of which is trade exchange. Trade between Cambodia and China has become noticeably prominent especially since the first trade agreement signed in 1996. This study carries out the analysis on how Cambodia can intensify and sustain the benefits from so-called bilateral trade in the medium and long term by looking at the China-Cambodia’s trade pattern and constraints facing export and import firms in Cambodia. A descriptive method has been conducted on the secondary data collected. Primary data collection has been carried out during in-depth interviews with representatives from garment factories, construction companies, and logistic firms located in Phnom Penh and Kandal province of Cambodia involving in exports and imports with China. The results show that first of all, trade between Cambodia and China tends to be in the form of intra-industry trade. This is perhaps mainly because of high concentration in a few traded products and very small volume of exports to China. Constraints to trade flows between the two countries, particularly from the Cambodia’s exports to China, have been examined in this study in light of making policy recommendations. Intensification especially of Cambodia’s export to China to enhance its trade balance is needed and can be made possible by improving Cambodia’s supply chain of intermediate goods within the focused traded industries domestically. Cambodia still has to enhance its efficiency and competitiveness by reducing cost contributed by non-trade barriers such as delay in export procedures, logistic performance and infrastructure, and custom clearance procedure.
KeywordsTrade Connec Tions One Belt One Road (OBOR) Road Initiative Intra-industry Trade Cambodia
- Barro, R. J., & Sala-i-Martin, X. (2004). Economic growth (2nd ed.). Cambridge, MA: Massachusetts Institute of Technology.Google Scholar
- Busse, M., & Königer, J. (2012). Trade and economic growth: A re-examination of the empirical evidence, HWWI research paper (Vol. 123, pp. 1–18). Hamburg: Hamburg Institute of International Economics.Google Scholar
- Carbaugh, R. J. (2015). International economics (15th ed.). Boston: Cengage Learning.Google Scholar
- Chorn, S., & Siek, D. (2017). Impact of foreign capital inflows on economic growth of developing countries. Journal of Finance and Economics, 5(3), 128–135. Hong Kong: Science and Education publishing.Google Scholar
- Economic Watch. (2010). Global trade. Retrieved from the following link http://www.economywatch.com/international-trade/. Accessed on 13 Mar 2017.
- Gerber, J. (2014). International economics (6th ed.). San Diego: Pearson Education.Google Scholar
- Gries, T., & Redlin, M. (2012). Trade openness and economic growth: A panel causality analysis, Working papers CIE (52). Paderborn: Center for International Economics.Google Scholar
- Heng, K., & Po, S. (2017). Cambodia and China’s Belt and Road Initiative: Opportunities, challenges and future directions. UC occasional paper series, 1(2), 1–18 Phnom Penh, Univesity of Cambodia.Google Scholar
- Hing, V. (2013). Leveraging trade for economic growth in Cambodia, Working paper series (81). Phnom Penh: Cambodia Development Resource Institute.Google Scholar
- Kim, S. (2006). An analysis of Cambodia’s trade flows: A gravity model. Munich Personal RePEc Archive, 1–24.Google Scholar
- Krugman, P. R., et al. (2012). International economics: Theory & policy (9th ed.). Boston: Pearson Education.Google Scholar
- Osei-Yeboah, et al. (2012). Effects of trade openness on economic growth: The case of African countries. Southern agricultural economics association annual meeting. Birmingham.Google Scholar
- Vin, S., et al. (2014). Rice trade between Cambodia and the greater Mekong sub-region (GMS) countries: Thailand, Vietnam and China. International Journal of Agricultural Science and Research (IJASR), 4(6), 147–154. India: TJPRC Pvt. Ltd.Google Scholar
- World Bank. (2013). Online trade outcomes indicators: User’s manual. Retrieved from World Integrated Trade Solution: http://wits.worldbank.org/WITS/docs/TradeOutcomes-UserManual.pdf. Accessed on 12 Apr 2018.
- WTO. (2015). Cambodia. Retrieved from the following link http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Language=S&Country=KH. Accessed on 25 Feb 2017.