PHNOM PENH (The Phnom Penh Post/Asia News Network): German President Frank-Walter Steinmeier’s visit to Cambodia could give renewed impetus towards the consolidation of bilateral relations between the two countries as well as to the two-way goods trade, which was valued at nearly US$1.25 billion in 2022, expanding by almost one-fifth on a yearly basis, according to observers.
Steinmeier’s Feb 14-16 visit – at the invitation of Acting Head of State Say Chhum, who is also Senate president – was widely reported as the first made by a sitting German president, and comes as part of an Indo-Pacific tour to develop political and economic ties with the region, in line with Berlin’s “Zeitenwende” fundamental shift in foreign and security policy.
Customs (GDCE) statistics show that the Cambodian-German merchandise trade was to the tune of $1.247 billion last year – up by 19.28 per cent on-year – equivalent to 2.378 per cent of the Kingdom’s $52.425 billion in total international trade volume for 2022.
In 2022, Cambodian exports to and imports from Germany clocked in at $1.084 billion and $163.280 million, respectively, up 23.03 per cent and down 0.79 per cent year-on-year, expanding the Kingdom’s trade surplus with the largest European economy by 28.50 per cent on a yearly basis to $920.344 million.
Germany ranked as Cambodia’s sixth largest export market, and the Kingdom’s eighth top trading partner overall.
And last month, the two-way merchandise trade amounted to $84.169 million, down 19.39 per cent from January 2022 and down 9.25 per cent from December 2022.
Cambodian exports to Germany came in at $67.782 million, down 18.02 per cent year-on-year and down 18.07 per cent month-on-month, while imports totalled $16.387 million, down 24.57 per cent year-on-year but up nearly 64 per cent month-month.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, told The Post on Feb 16 that Europe’s largest and most prosperous economy places high numbers of orders for Cambodian goods, which he said come with very limited political strings attached.
He accredited the fairly large value of Cambodian exports to their affordability as well as the reputation for quality and similar attributes that they have built up in Germany, and suggested that the high price tags of potential German imports into Cambodia put off local buyers, hence resulting in the Kingdom’s trade surplus with Western Europe’s most populous country.
Their past experiences of diplomatic relations and Steinmeier’s visit to the Kingdom will fuel the two-way trade, especially when it comes to Cambodian exports to Germany, he said confidently.
“Economics and politics always go together, thus better diplomatic relations between the two countries means more opportunity for Cambodia to export its products to Germany. Given Germany’s large size and position in the EU, good relations could also help get more Cambodian goods through to [other] European markets,” he surmised.
On the other hand, Germany seems to account for a comparatively small share of investment in Cambodia, he lamented.
The bulk of Cambodian exports to Germany comprise garments, footwear and travel goods, bicycles, and agricultural products, he said, listing notable imports as vehicles, electrical and electronic equipment, and construction materials.
On Feb 15, German Federal Ministry for Economic Affairs and Climate Action state secretary Michael Kellner led a business delegation to a meeting at the Council for the Development of Cambodia (CDC), the Kingdom’s apex trade body said in a statement.
“Cambodia maintains an open investment climate, and allows foreign investors to invest in all sectors without requiring the involvement of local investors,” CDC secretary-general Sok Chenda Sophea was quoted as telling the delegation, issuing a general invitation to look into and gain a better understanding of the investment opportunities offered by the kingdom.
Kellner affirmed that Berlin is encouraging German investors to branch out into Southeast Asian countries, expressing hope that at least one of the businesspeople accompanying Steinmeier on his visit will invest in Cambodia, and potentially benefit from the promise of and open and favourable investment environment, the CDC statement added.