Economist Addresses Cambodia’s Trade Deficit with China as Not Concerning
Cambodia’s trade with China surpassed $4 billion in Q1 2025, showing a 26% increase. It’s reported that imports from China resulted in a notable trade deficit of 91%. Economist Hong Vanak reassures that this imbalance is acceptable as imports are vital for manufacturing. The upcoming state visit from President Xi Jinping is expected to fortify relations further, while efforts to increase exports are necessary.
In the first quarter of 2025, Cambodia’s bilateral trade with China exceeded $4 billion, marking a 26% increase from the same period in 2024. Chinese imports comprised over $3.7 billion, resulting in a trade deficit of approximately 91%. The General Department of Customs and Excise reported that this trade volume accounts for nearly 30% of Cambodia’s total international trade, which reached $14.4 billion in that quarter.
Cambodian exports to China totaled $348.19 million, reflecting a 4.9% decrease, while imports from China rose by 30.8%, reaching $3.72 billion. Consequently, the trade deficit stood at 91.44%, totaling $3.37 billion, up from $2.44 billion in 2024. This disparity was highlighted by U.S. President Donald Trump in a recent statement regarding tariffs.
Hong Vanak, an economist at the Royal Academy of Cambodia, emphasized the strong diplomatic ties between Cambodia and China. He remarked that trade has been on an upward trend due to a bilateral Free Trade Agreement. The significant volume of imports from China mainly supports Cambodian manufacturing industries, leading to processing for re-export.
Vanak reassured that the trade imbalance should not be a concern, as the imports are integral for Cambodia’s production sector. However, he urged for greater efforts to identify additional export opportunities to China and other nations.
Furthermore, on April 11, 2025, the Ministry of Foreign Affairs announced a state visit by Chinese President Xi Jinping, scheduled for April 17-18. This visit is anticipated to reinforce the robust friendship between the two countries and facilitate the signing of several cooperative agreements.^
Reflecting on past years, total trade between Cambodia and China reached $15.19 billion in 2024, which indicates a 23.8% increase from 2023, driven primarily by heightened imports and exports.
In summary, Cambodia’s trade deficit with China, highlighted by a 91% deficit in early 2025, should not evoke concern as imports serve crucial roles in local manufacturing. Strengthened trade relations are underscored by a forthcoming state visit from China’s President, which aims to enhance bilateral cooperation. Continuous efforts to boost exports to diverse international markets are encouraged to further balance this trade dynamic.
Original Source: asianews.network
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