China Cambodia Economic and Trade Cooperation Meets New Opportunities, Cambodian Experts: Leveraging RCEP's "East Wind" Economic and Trade Relations | Competitiveness | Cambodia

Introduction: Since the Regional Comprehensive Economic Partnership Agreement and the China Cambodia Free Trade Agreement came into effect in 2022, China Cambodia's economic and trade relations have developed rapidly, and trade liberalization and facilitation have benefited both sides. In the future, the two countries should strengthen cooperation in the field of small and medium-sized enterprises, support their development, and enable them to fully enjoy the benefits of RCEP.

The Asia Pacific region accounts for approximately 30% of the world's GDP and one-third of the world's population. The Regional Comprehensive Economic Partnership Agreement, which takes effect in 2022, is a catalyst for economic growth, integration, and connectivity in the Asia Pacific region.

RCEP is the world's largest free trade agreement. As a modern, comprehensive, high-quality, and mutually beneficial economic partnership framework, it helps to expand regional trade and investment, making significant contributions to global economic growth. In the post pandemic era, RCEP is of great significance in promoting socio-economic recovery.

The Asian Development Bank predicts that by 2030, RCEP will drive a 0.6% increase in economic income for its member countries, adding $245 billion in annual income to the region and creating a total of 2.8 million jobs.

The RCEP agreement covers areas such as trade in goods and services, investment, and economic and technological cooperation. At the same time, it also expands the scope of the original free trade agreement rules, including topics such as e-commerce, intellectual property, government procurement, competition, and small and medium-sized enterprises.

Since the China Cambodia Free Trade Agreement and RCEP came into effect in January 2022, the economic relationship between China and Cambodia has been thriving.

China is Cambodia's largest source of foreign investment and largest trading partner. In the first 11 months of 2022, China's non-financial direct investment in Cambodia reached 690 million US dollars, a year-on-year increase of 32.7%; The bilateral trade volume for the whole year was about 14.5 billion US dollars, a year-on-year increase of 19%.

In February this year, Cambodian Prime Minister Hun Sen visited China. Subsequently, both sides issued a joint statement agreeing to strengthen customs inspection and quarantine cooperation, further promote the import of high-quality agricultural products from Cambodia, continue to promote "single window" connectivity, and promote smooth trade.

In this context, Cambodia can fully utilize RCEP and CCFTA, as well as international platforms such as the China International Import Expo, China Import and Export Fair, and China ASEAN Expo, to enhance the competitiveness and visibility of Cambodian products in China.

China and Cambodia can also leverage their respective local advantages, fully utilize existing bilateral and regional trade arrangements and platforms, and strengthen practical economic and trade cooperation, especially in the fields of goods, services, and digital trade.

RCEP also provides great prospects for cooperation and interest optimization for both parties.

A research report by the ASEAN and East Asian Economic Research Institute in October 2022 showed that Cambodia has enormous export potential. Cambodia's GDP growth rate is expected to reach 2% to 3.8%, export growth rate can reach 9.4% to 18%, the number of new employment opportunities will increase by 3.2% to 6.2% annually, tax revenue will increase by 2% to 3.9%, and overall investment may increase by about 23.4%. If exports grow by 9.4%, the benchmark growth rate may increase by 2% annually, and employment opportunities can increase by 3.2%; If exports increase by 18%, it will bring more positive impacts - GDP will grow by 3.8% and employment opportunities will increase by 6.2%.

In addition, RCEP also provides a platform and framework for economic cooperation projects and activities between China and Cambodia, which can enhance the capabilities of small and medium-sized enterprises and enable them to benefit from the opportunities brought by integrating into regional and global supply chains.

Therefore, China and Cambodia should deepen cooperation in the field of small and medium-sized enterprises, create a favorable environment, and enable enterprises to develop healthily with minimal interference from bureaucratic systems. At the same time, the online enterprise registration, license issuance, and tax services provided by the e-government platform also provide continuity and accessibility, and reduce transaction costs.

For small businesses, tax issues are extremely important. Tax incentives and simplification can promote the expansion of business for small and medium-sized enterprises and help them achieve sustainable development.

Next, China and Cambodia should strengthen cooperation and help Cambodia improve its production capacity, competitiveness, and export capabilities, especially supporting small and medium-sized enterprises to fully enjoy the dividends brought by RCEP.

Firstly, the two countries should explore in depth how to enable small and medium-sized enterprises to better enter the market and participate in the global value chain by developing partnerships between enterprises.

Secondly, both countries should encourage small and medium-sized enterprises to utilize e-commerce and enhance their digital capabilities.

Thirdly, both countries should strengthen the entrepreneurial and innovative capabilities of small and medium-sized enterprises, including their ability to apply new technologies.

Fourthly, both parties should raise the awareness of intellectual property rights among small and medium-sized enterprises, strengthen their understanding and effective utilization of the intellectual property system.

Fifth, promote good regulatory practices and formulate policies, regulations, and plans that are conducive to the development of small and medium-sized enterprises.

The original title of this article was "Fully Tapping Potential of RCEP"

Editor in Chief: Song Ping, Luan Ruiying

Editor | Zhang Zhao and Li Xiaoyun

Interns Li Jingwei, Qin Ke, and Yao Qinqin also made contributions

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