China's tax free provides impetus for Cambodian producers

PHNOM PENH, Cambodia - Cambodia's commerce officials said Thursday China's tax exemption for 418 items of Cambodia's products to its market is an impetus for Cambodian producers; however, the country has still not taken the maximum advantage of the offer.

"The China's tax exemption is the open of the market for Cambodian products and is an encouragement for Cambodia's producers to increase their production," Ok Boung, secretary of state at the Ministry of Commerce, told Xinhua in an interview.

"The provision is very useful to reduce Cambodia's reliance on only the European markets, or the United States."
However, the country is still unable to maximize the benefits from the bilateral cooperation due to the shortage of resources, quality products, and market information.

"Cambodian producers need to learn more about Chinese market in terms of product characteristic and qualities," he said. "It's important to know about the needs of Chinese consumers."

Ok Boung said among the 418 tax-free items, Cambodia has exported to China mostly garment and textile, footwear, some agriculture and forestry products, and food products.

"Our export to China is still in small amount, but, in the future, we see China as the largest market for our products," he said.

The tax-free products the government of China provided to Cambodia include garments, textiles, shoes, food products, living animals such as cattle and swine for breeding, according to the list of tax exemption items, provided to Xinhua by Cambodia's Commerce Ministry on Thursday.

Also, a number of agriculture and forestry products include cashew nut, cane sugar, fruits, coffee, furniture, vegetations for using in pharmacy, rattans, crude maize oil, castor oil, sesame oil and other fixed vegetable fats.
Rice, cassava, rubber and corn, which are mostly grown in Cambodia, have not been included in the tax exemption list.

Kong Putheara, director of the Commerce Ministry's Statistics Department, said the tax exemption was very good for Cambodia to boost production and to diversify Cambodia's export destinations.

"We see China as a stable and huge market for us -- unlike the European markets that now are facing debt crisis," he said.

He said the exemption also helped boost Cambodia and China bilateral trade relations.

According to the Commerce Ministry's reports, the two countries ' trade volume was $912.76 million in the first six months of this year, up 82 percent from $501 million in the same period last year.

During the period, Cambodia's exports to China was $66.31 million, increased 275 percent from $17.68 million, and Cambodia's imports from China reached $846.45 million, up 75 percent from $483.37 million.

The two countries expected that the trade volume in 2011 would hit $2 billion.