China has withheld loan approvals to Cambodia in 2024, finance ministry data for the first three quarters of this year reveals, despite being its top creditor in recent years.
The collapse in funding may signal China’s more cautious approach to investment in Cambodia after a series of so-far unsuccessful infrastructure projects in the Southeast Asian country.
China accounts for more than a third of the country’s $11.6 billion debt stock, Cambodian government data shows.
But no new loan was signed from January to September this year, down from nearly $212 million over the same period last year.
This has not affected overall lending to Cambodia, as other creditors have stepped in with loans totalling around $1 billion, almost as much as was lent to the country in the first nine months of last year.
The World Bank has signed loans worth $564 million so far this year, making it Cambodia’s top lender for 2024, followed by Japan with $262 million.
China’s freeze on funding follows years of heavy investment in Cambodia.
A spokesperson for China’s foreign ministry did not respond to a question about loans but said on Wednesday that “China and Cambodia are iron-clad friends. We will continue to strengthen cooperation with Cambodia and support Cambodia in promoting development and improving people’s livelihood.”
A report in China Global South Project claimed that most Chinese projects executed in Cambodia are on build-operate-transfer model, which it said was “debt-free”.
A spokesperson for Cambodia’s finance ministry did not immediately reply to a request for comment.
China was Cambodia’s top lender among partner countries last year with over $300 million in loans for the full year. Only the World Bank did more last year, with signed loans worth half a billion dollars, according to official data.
In 2022, Beijing also topped the overall list of lenders with $567 million in signed loans, followed by Japan and the Asian Development Bank.
(With inputs from Reuters)
