China's Sudden Halt in Cambodian Loans: What It Means for Future Infrastructure

China, Cambodia's top creditor, paused new loans last year, reversing financial support crucial for infrastructure development. China's loans account for over a third of Cambodia's debt, integral to the nation's economy. The halt contrasts with past loan agreements, posing questions for future projects.

China, historically Cambodia's leading lender, signed no new loans last year, according to Cambodia's finance ministry. This unexpected halt threatens to impact the nation's pivotal infrastructure projects, with China responsible for over one-third of Cambodia's debts.

The absence of new loans starkly contrasts with past agreements worth billions in the previous two years. Although China and Cambodia are regarded as close allies, Beijing's recent overseas investment reductions raise concerns about future project financing.

Despite these setbacks, Cambodia remains hopeful with a multi-billion-dollar canal project pending Chinese support. However, without Beijing's recent assurances, the future financing landscape remains uncertain, as officials continue feasibility discussions.

(With inputs from agencies.)