China's Shifting Lending Policy Leaves Cambodia Seeking New Allies

China has halted new loans to Cambodia in 2024 despite being a top creditor, owing to cautious investment after unsuccessful projects. Other creditors, including the World Bank and Japan, have bridged the funding gap by providing loans totaling around $1 billion this year.

China has paused its lending to Cambodia in 2024, as revealed by Cambodian finance ministry data. This marks a significant shift, considering China's history as Cambodia's top creditor in recent years. The absence of new loans may reflect Beijing's cautious approach following multiple unsuccessful infrastructure initiatives in the Southeast Asian nation.

China historically accounted for over one-third of Cambodia's $11.6 billion outstanding debt. However, from January to September 2024, no new loans were signed, contrasting with nearly $212 million lent within the same timeframe last year. Despite the funding halt, a spokesperson reaffirms China and Cambodia as 'iron-clad friends' committed to cooperating and supporting developmental endeavors.

In response to speculation about the cessation of Chinese loans, Meas Soksensan, Cambodia's finance ministry spokesman, dismissed such claims. He cited pending project reviews and future financing agreements. Meanwhile, other international partners have stepped in, with the World Bank and Japan leading $1 billion in loans to Cambodia this year.

(With inputs from agencies.)