Chinese money is driving Cambodia’s project growth this year in agriculture, tourism and infrastructure, a government report shows, but experts warn of sustainability risks, reliance on Beijing and weak gains for workers and social sectors.
In the first eight months of this year, 491 foreign investments projects worth about $7.2 billion were approved, a 50% increase in capital compared to the same period in 2024, according to the Council for the Development of Cambodia (CDC).
The tally already tops all foreign development and commercial projects approved last year.
In August alone, the Cambodia Investment Committee cleared 51 projects worth $608 million, which the CDC said could generate about 27,000 jobs.
Since the start of the year, China has led with nearly 53% of total investment across agro-industry, infrastructure and tourism, followed by Cambodian public funds at about 31% and Singapore at 7%, well behind the top two.
U.S. investment remained below 1%, coming as the Trump administration cut most of its foreign aid to Cambodia earlier this year.
New projects include a $27 million fruit-processing plant in Battambang, which the CDC said is expected to add 1,160 jobs, an $87 million rubber factory in Tbong Khmum, a $17 million steel plant in Svay Rieng that could create 363 jobs, and an $11 million water-treatment and power facility in the Sihanoukville special economic zone.
China has long been Cambodia’s largest creditor, holding more than a third of the country’s debt. Beijing and Phnom Penh maintain “iron-clad” economic and diplomatic ties, but a halt in Chinese assistance loans last year brought into question Beijing’s apparent cautious approach to major infrastructure projects in the country.
The Cambodian government remains hopeful that Chinese investment will spur job growth, as nearly a million migrant workers return from Thailand following a brief, deadly border clash in July, and more than 88% of jobs in the country remain informal with limited benefits.
Labor Ministry spokesperson Sun Mesa, citing the CDC figures, claimed this year’s influx of major industry projects will create nearly 340,000 jobs.
He also called for compliance to labor laws.
“All factories and enterprises must understand Cambodian law before investing. After breaking ground, the ministry will advise them to comply and protect workers’ interests,” Mesa said.
Yang Sophorn, president of the Cambodian Alliance of Trade Unions, said Chinese companies are prominent in Cambodia, but investors must respect human rights and provide long-term benefits.
“We want investors who care about people and human rights, not those who ignore social conditions,” she said, referencing the stipulations that have traditionally followed foreign assistance and private sector investment from democratic nations.
Other analysts say the economic boost comes with limits.
Stephen Higgins, managing partner of Phnom Penh-based Mekong Strategic Capital, told CamboJA News via email that despite the economic hit from the July border conflict, continued investment in manufacturing and infrastructure “gives Cambodia a lot of confidence in the future.”
He cautioned, however, that investors are primarily profit-driven, which does not always align with social priorities. “Areas like health and education typically need, and deserve, significant government investment, more so than private investment,” Higgins said.
He also noted the government’s efforts to reduce reliance on a single source of capital.
“The Cambodian government doesn’t want to be too reliant on any one country, and wants a diversified investor base. To achieve that, they are working to encourage more investment from other countries, rather than saying ‘no’ to new investment from China, which is still valuable for Cambodia.”
