The CCFTA, signed in October 2020 and effective since January 2022, was initiated by Cambodian officials with the aim of broadening its trade relations and export markets in China in response to the economic fallout caused by the pandemic, local flooding, and economic pressures and sanctions from the EU and the US.
Cambodia’s economic policies are relatively liberal for the region and its investment and trade regimes remain attractive. However, being a small and open economy, Cambodia is susceptible to external changes and shocks.
Cambodia’s trade volume nearly doubled between 2017 and 2021, increasing from US$25.44 billion to US$48.01 billion. Furthermore, Cambodia’s export potential to regional markets is limited. Only a small portion of total exports go to such markets, and the country’s businesses are as yet not adequately integrated into regional value chains.
Despite the challenges posed by the pandemic, China and Cambodia managed to exceed their bilateral trade volume target by reaching $11.1 billion in 2021, achieving the $10 billion goal two years ahead of schedule. In 2022, China was Cambodia’s largest export market, with exports totalling US$1.24 billion, representing 5.5% of Cambodia’s total exports.
Source: fulcrum.sg
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