Despite New Loan Not Yet Approved, Chinese Investment Dominates Cambodia’s FDI

• 1 February 2025
• Local News
• 147 Views

Cambodia continues attracting substantial Chinese foreign direct investment, maintaining a 47% share of total FDI as of Q2 2024 despite recording no new Chinese government loans in Q3 2024. This sustained dominance in foreign investment follows a consistent pattern, where Chinese FDI has maintained majority control ranging from 48% to 56% since 2020, according to findings presented by CBRE Cambodia Chairman Marc Townsend at Novotel Phnom Penh BKK1 on 14 January 2024.

The landscape of Chinese financial engagement in Cambodia has evolved significantly over recent years, showing distinct patterns across different sectors. Government loan figures from China have fluctuated considerably, peaking at USD 650 million in 2018, followed by more modest amounts of USD 580 million and USD 600 million in 2022 and 2023, respectively, before coming to a complete halt in Q3 2024.

Meanwhile, the tourism sector tells a story of remarkable recovery from pandemic-induced lows. Chinese tourist arrivals have shown impressive resilience, climbing to 1.7 million visitors by November 2024 – a dramatic improvement from the mere 50,000 visitors recorded in 2021. However, this figure still falls short of the pre-pandemic peak of 2.3 million visitors achieved in 2019, indicating a 1.6 million gap in tourist numbers that the sector still needs to bridge.

The investment pattern demonstrates China’s unwavering confidence in Cambodia’s market potential, even as traditional funding mechanisms evolve. While government-to-government loans have temporarily ceased, private-sector investment continues to flow, with Chinese FDI maintaining its dominant position at 47% of total foreign investment in Q2 2024. This represents only a slight decrease from its peak of 56% in 2023, suggesting sustained long-term interest from Chinese investors in Cambodia’s growth story.

• Analysis