Q1 wire exports balloon 83%
CAMBODIA exported “insulated wire and optical cables” to the tune of $40.868 million in the first quarter of 2023, ballooning by 82.72 per cent against the $22.366 million recorded in the same threemonth period of 2022, the Ministry of Commerce reported, citing Customs (GDCE).
This grouping is part of the broader “electrical, electronic equipment” category, which corresponds to Chapter 85 of the Harmonised System (HS) of Tariff Nomenclature.
The Kingdom’s Chapter 85 exports clocked in at $736.776 million in the first quarter, up 101.70 per cent from $365.279 million in January-March 2022, up 41.77 per cent from $519.71 million in July-September 2022, and up 2.6 per cent from $718.21 million in October-December 2022, provisional GDCE figures show.
Based on these figures, “insulated wire and optical cables” and Chapter 85 items respectively accounted for 0.76 per cent and 13.66 per cent of the value of the Kingdom’s total exports over the JanuaryMarch period, or $5.392 billion as indicated by the GDCE.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng told The Post on May 7 that investment inflows and exports have been steadily driven forward by the potential of Cambodia’s geographical location, political stability and favourable investment laws, as well as its large, affordable and skilled labour pool, in addition to a wide selection of overseas buyers eager to source from the Kingdom.
The nearly five-sixths yearon-year increase in the export volume of “insulated wire and optical cables” logged in the first quarter is indicative of a shift away from the manufacture of textile-related items to industries that require technologically-advanced machinery and skilled labour, he posited.
“The growth in production
and export of these products is in step with demand trends in the international market,” Heng claimed.
“Taking into account Cambodia’s trade agreements with many countries and preferential tariffs on exports from certain countries, the export volume of these products will increase going forward,” he predicted.
An uptick in the domestic production of “insulated wire and optical cables” could mean a more readily-available supply locally, conceivably translating into time saved in the transport of these items, he opined, adding that this could thereby convince investors to set up power plants or heavy-industry factories that churn out electronics, machinery or vehicles.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, commented that exports of electrical and electronic goods, vehicle parts and hightech products have increased significantly in recent years.
This increase does not only mean more revenues for the Kingdom but also substantiates the government’s ability to bring in manufacturing enterprises
that make electrical and electronic components, he argued.
On the whole, the labour-intensiveness of Cambodian factories has been on a downward trend, he said, underscoring that tech-intensive facilities tend to require massive longterm investments, as compared to their textile counterparts which are able to “move, close, or open quickly”.
“The increase in the production and export of ‘insulated wire and optical cables’ and electronics and such confirms that the Cambodian production chain base has grown stronger,” Vanak said, adding that these types of factories can pump more money into the economy than those in other industries.
According to the National Bank of Cambodia (NBC), foreign direct investment (FDI) inflows in the Kingdom in the 10,011-day period from the August 5, 1994 promulgation of the old Law on Investment and December 31, 2021 amounted to 168.8 trillion riel ($41.0 billion), rising by 11.2 per cent from the nearly 152 trillion riel recorded by end-2020.
Broken down by sector, finance accounted for the lion’s
share at $9.4 billion or 22.9 per cent, followed by manufacturing ($8.5 billion; 20.8%), real estate ($4.9 billion; 12%), hotels and restaurants ($4.4 billion; 10.7%), agriculture ($4.2 billion; 10.3%), electricity ($2.6 billion; 6.2%) and construction ($1.6 billion; 4.1%), while the rest comprised $5.3 billion, or 13 per cent.
GDCE statistics show that Cambodia in 2022 exported Chapter 85 items to the tune of $1.998 billion, recording an 84.83 per cent jump from the $1.081 billion logged a year earlier and accounting for 8.89 per cent of the $22.483 billion in total exports for last year.
Last year’s monthly average came to $166.516 million – or $154.521 million with December’s peak of $298.465 million excluded. October saw the second largest monthly figure for 2022, at just 65.8 per cent of that, or $196.405 million.
For reference, the full title of Chapter 85 is “electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles”.