China pumps $550M into Cambodia’s industrial sector
China pumps $550M into Cambodia’s industrial sector
Despite ongoing global trade tensions and tariff disputes, China reaffirmed its position as Cambodia’s leading Foreign Direct Investment (FDI) by channelling nearly $550 million into the Kingdom’s industrial sector in January.
Although the Ministry of Economy and Finance (MEF) has not recorded significant budgets for concession loans and grants since last year, the Council for the Development of Cambodia (CDC) Wednesday confirmed that China’s investments continue to surpass any other partner country.
Chinese substantial investment accounts for roughly 73.35 percent or an equivalent of $548.65 million compared to Cambodia’s overall investment capital of $748 million in the first month of 2025, according to the Cambodian Investment Board (CIB) press release issued on February 5.
China is among the top investment sources, accounting for 73.35 percent, followed by Vietnam at 5.52 percent, the statement added.
Several experts expressed optimism about the surge in Chinese investment, telling Khmer Times that Cambodia is benefiting from global trade tensions and tariff disputes, which are driving FDI shifts across Southeast Asia.
Mean Sovannarith, Co-Founder and CEO of DeGrand Realty Co Ltd, noted that the surge in Chinese investment comes as no surprise.
He highlighted that Cambodia and China have elevated their bilateral relations to an ironclad friendship, underpinned by aligned political and economic strategies.
“In terms of trade, China is the largest import partner, providing affordable products that cater to the needs of the majority of the Cambodian citizens,” Sovannarith added.
He also emphasised the impact of the suspension of the United States Agency for International Development (USAID), which affected over 1,000 workers at the Cambodian Mine Action Centre (CMAC).
“China has stepped in to provide approximately $4.5 million in funding, helping to restore jobs for around 400 mining disposal experts and mitigating the effects of the suspension,” the CEO of DeGrand Realty stated.
Dr Chey Tech, a socio-economic researcher, pointed out that this marks a substantial increase from previous years with the number of approved projects rising by 300 percent compared to January 2024, mainly in the industrial sector.
“It also shows that China’s continued support and investment are playing a crucial role in Cambodia’s economic development and growth.”
He went on to add that the strong bilateral relationship commonly known as the ‘Diamond Partnership’ between Cambodia and China, grounded in mutual trust and respect, has been a key factor in attracting these investments. RCEP and FTA between the two countries have further strengthened trade and investment ties.
Anthony Galliano, Group CEO of Cambodian Investment Management Holdings (CIM) said that we are entering a brave new world unlike any we have seen before where investment, financial aid, and lending are being re-evaluated.
“Country geopolitical strategies, investment fund directives, and financial markets are disrupted given recent dramatic policies from the US.”
He said that the shift in China’s financial strategy, leaning toward equity rather than debt, may be due to internal factors, such as managing its debt and financial stability. By focusing on investments rather than loans, China can still maintain its significance without increasing the financial burden on the Kingdom.
“Through investments rather than loans, China can secure long-term partnerships and foster development in infrastructure, technology, and industries while also ensuring Chinese companies benefit.”
Galliano added that ongoing tariffs on China, lessons from Covid-19 supply chain disruptions, and rising costs are driving a partial shift of manufacturing out of China.
“Southeast Asian nations, particularly Vietnam and Thailand, already benefit. This remains one of Cambodia’s largest investment opportunities,” he added.
