Chinese Investments Continue to Drive Cambodia’s FDI Growth

Despite a volatile first quarter of 2025 in terms of US-Cambodia trade, cooperation and investment relations, capital inflows from China into the Cambodian market have remained strong, according to the latest data released by the Council for the Development of Cambodia (CDC).

Chinese FDI trends in Q1 2025:

In Q1 2025, Chinese investment into Cambodia reflected 56.23% of the total registered capital, totaling $2.5B throughout the period. Along with new investment projects, this also included six expansions of preexisting production facilities, which in total will create approximately 120,000 new jobs nationwide.

The location of new Foreign Direct Investment (FDI) projects for Q1 were centered in Kampong Speu (43 projects), Svay Rieng (34 projects), Koh Kong (22 projects), and Phnom Penh (21 projects).

The sum investment of $2.5B was shared across 172 investment projects, 99 outside of Special Economic Zones (SEZ) and 73 within SEZs. The total number of investment projects has risen by 66 since 2024’s first quarter, a 14% increase.

In March alone, 60 investment projects were registered, attracting $1.4B in capital, and set to create 50,000 jobs.

Outside of Chinese investments, other major capital sources were from domestic investors (34.40%), from Singapore (2.91%), and from the British Virgin Islands (2.40%).

The industrial sector absorbed around $2.2B of this FDI, the rest targeting infrastructure development projects.

USA-Cambodia Economic Ties in Q1 2025:

Notably, in recent periods, the USA, under the second presidency of Donald Trump, has altered the economic relationship between Cambodia and USA in several ways.

Firstly, by halting the USAID programs in Cambodia, the Trump Administration has effectively exited a range of humanitarian and development projects based in the Kingdom of Cambodia and removed ongoing funding into Cambodia for USAID and other developmental agency and NGO projects previously active within the country.

Following the halt of USAID, the Trump Administration also emplaced 49% US import tariffs on Cambodian export products entering the US market, effective immediately.

While since the announcement, the tariffs have been reduced to 10% based on negotiation on the trade terms between the Cambodian Government and the US Administration, the period has created volatility in Cambodia’s FDI sector, as international industrial investors remain unsure of launching new ventures in the economy while future tariffs for their products to enter the US market remain unclear.

The economic ties between Cambodia and the USA remain very important to Cambodia’s economy, due to trade flows in recent years, and the growth in the Cambodian manufacturing sector that these exchanges have supported.

Cambodia’s top trade partners in 2024 for instance was China, the USA and Vietnam. Cambodia’s main export products for 2024 included garments, machinery, electronics, footwear, leather goods, agricultural products, furniture, rubber, fruits and vegetables.  

The garment, textiles and footwear industry remain the backbone of Cambodia’s manufacturing sector, and a key source of employment nationwide.  It also remains the key export into the US market.

In 2024, clothing exports reached $11.66B, accounting for 46.2% of total exports; footwear exports were $3.5B, accounting for 13.5%. Meanwhile, agricultural product exports totaled $4.8B, up 20% year-on-year. Other emerging industries include technology, automotive parts and assembly and renewable energies.  

Major imports include medicines, health products, food and beverages, electrical and electronic equipment, building materials, agricultural machinery and vehicles. 

Cambodia FDI Trends:

In recent years, Cambodia has also continued to draw high levels of foreign direct investment (FDI) into key business sectors, infrastructure development projects and the financial sector. Cambodia attracted $6.9B in FDI in 2024, a 20% year-on-year increase, and a historic high, as according to CDC data.

China was the largest source of FDI in Cambodia last year, accounting for 49.8% of the total investment in 2024, covering manufacturing, infrastructure construction, real estate, agriculture and other fields.  

Cambodian local enterprises ranked second in 2024, accounting for 33.8% of the total investment; and neighboring Vietnam ranked third.

In addition, South Korea, Japan, Singapore, Japan, Malaysia, Thailand, Canada, the United Kingdom and other countries are also important sources of FDI in Cambodia.

The industrial sector was the field that attracted the most FDI in 2024, followed by the agricultural and agro-industrial sectors, the tourism and services sector and infrastructure investments. 

Why not check out a selection of foreign ownership ready investments from trusted developers in Phnom Penh today with IPS Cambodia, Cambodia’s most trusted and longest running full-service real estate agency:

Time Square 8, with units starting at $60,000

J Tower 3, with units starting at $330,000.

Or learn more about the process for buying a condo in Cambodia.