Cambodia-China’s Trade Connectivity: Reevaluating the Trade Pattern and Constraints
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.
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