China signed no new loans to Cambodia last year, latest data from Cambodia’s finance ministry shows, in a dramatic reversal by the country’s top creditor that if continued could affect infrastructure projects in the Southeast Asian nation.
With about $4 billion in outstanding loans, China accounts for more than a third of the country’s debt, Cambodian government data shows. That makes it the largest creditor, with a stock worth around one-tenth of Cambodia’s gross domestic product.
The collapse in signed loan agreements last year contrasts with new credit deals worth $302 million in 2023, and $567 million in 2022, according to the official data.
China’s loans to Cambodia have largely gone to infrastructure projects, such as roads, airports and power transmission lines.
Listed by the United Nations as a Least Developed Country, Cambodia is highly reliant on foreign financing, the IMF noted in a January report.
China’s foreign ministry said on Monday Beijing has extensively supported Cambodia’s development in recent years and “will continue to provide assistance to Cambodia’s economic and social development to the best of its ability.”
Beijing has downsized its overseas investments in recent years and some projects it funded in Cambodia were seen as unsuccessful, officials have said.
Meas Soksensan, a spokesperson for Cambodia’s finance ministry, told Reuters on Monday the government was not concerned by the fall in loans, noting credit agreements depended on feasibility studies. “New projects are being discussed and will be signed soon,” he added.
Cambodia has announced Chinese investment for a new canal with an estimated cost of $1.7 billion that could be the country’s most expensive infrastructure project, but so far Beijing has not disclosed any figure for its possible contribution.
Chinese disbursements for previously agreed loans continued last year but at a lower pace than in the past, the data shows.
Cambodia received credit worth nearly $241 million from Beijing last year, down from $366 million in 2023 and $301 million in 2022, the official data showed.
(Reuters)
